The XJO is expected to edge lower on open this morning following a practically flat night in the U.S. Their futures are flat.
It seems markets are running our of steam towards the top of the range. It seems likely we are reluctant at this stage to move too far from our key moving averages as we wait and see what happens in the U.S.
We are not out of the tariff woods yet, but there has been some promising developments towards resolution. For now, we should continue to assume the uptrend will hold and that markets will drift higher.
Today we will see the release of Australian unemployment data, which will either support the case for further RBA rate cuts (if the data is weak) or reduce the likelihood of rate cuts (if the data is strong). Regardless, the RBA is almost guaranteed to deliver another interest rate cut next Tuesday.
US Markets
US shares were again mixed overnight, with gains in the NASDAQ, while the DOW JONES closed lower, and the SP500 closed fairly flat. Again it was only technology and growth stocks that dragged US shares higher, with most sectors closing in the red. There was a lack of major news or events from US markets overnight, so instead prices drifted around their current levels. It does seem though that a lot of the optimism around the trade deal with China is starting to wane a little, and that the current upwards move is starting to run out of steam. Tongiht we will see some retail sales and other data for the US, which could provide further clues as to how the US economy is tracking. Overall though, don’t be surprised to see some profit taking in the short-term as investors capitalise on the recent upwards movement. Additionally, many in the market will want to await further data to see how Trump has affected the economy.
Only three of the eleven sector groups of the SP500 closed higher overnight, which were Communications, Technology, and Discretionary. Every other sector was lower to some degree, with Healthcare again the worst performer.
Technically, the SP500 gapped through the potential resistance and previous peak at 5,800. This is a technical bullish signal, with the all-time high around 6,150 now a realistic technical target. Although after recent strong gains, the index might first pull back towards the previous resistance at 5,800, which it may test as support.
Want to continue reading?
This is only an excerpt from todays TradersCircle Members Morning Market Update and doesn’t include the key data and charts our traders are keeping an eye on every day. Become a member today for this plus full length mid-day and end of day updates, trade recommendations, trade group webcasts, and much more!