More short covering and upside down sentiment, whereby the cooling of the US jobs market and flat lining manufacturing equals possible recession equates to a rally on Wall Street! Last nigth saw every major risk market explode upwards with USD sold off across the board – except against Australian dollar after the RBA got weak at the knees in yesterday’s meeting. 10 year US Treasuries were basically unchanged, still at the 3.6% level although interest rate expectations remain firm with 150bps in rises by January. Commodities were solid as well with oil markets continuing their bounceback, as Brent crude pushed above the $91USD per barrel level while gold soared above the $1700USD per ounce level, currently at the $1726 level this morning.
Looking at share markets in Asia from yesterday’s session where Chinese share markets are closed all week for National Day holidays while the Hang Seng Index is also closed for today only. The daily futures chart is still showing a very bearish mood with a bear market continuing as daily momentum remains well deep into negative funk, but initial signs of selling exhaustion are not translating into a deceleration at all:
Japanese stock markets were able to bounce back strongly, with the Nikkei 225 closing nearly 3% higher at 26992 points. The daily chart shows price action wanting to push aside that dominant downtrend after the recent dead cat bounce at the 28000 point level with former support, now resistance at the 27000 point level now being threatened. Futures are indicating even more upside potential today after the previous bullish engulfing candle with daily momentum setting up a nice swing play here, with another close above the high moving average confirming the move:
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