The XJO is expected to open higher this morning near 8,840 at time of writing.
The U.S closed lower overnight, a move they were due for considering the rally they have seen since their recent lows. It seems we are sort of running our own race both in the short and medium term. Whilst the U.S has made fresh highs, our market has lamented, but over the past few sessions it seems we are playing a bit of catch up.
Yesterday was a mixed day of trading. We managed to retaking session losses to finish marginally in the green. Roughly 8,800 is key support and 8,850 is the next resistance. This morning it seems likely we test resistance, however, with the U.S being down overnight, it would be hard to expect us to push through today.
The recent rally we have enjoyed, albeit choppy, puts our market in a position where we are likely due for some short-term profit taking. Don’t be surprised to see our market return to 8,750 which is where key support is and roughly where the uptrend line comes in depending on how long it takes to get there. It is normal for our market to go through some consolidation after a run, so it shouldn’t be too far away.
US Markets
The U.S closed lower overnight but managed to rebound intraday from key support and retake roughly half the intraday losses.
Consumer Disc. (1.75%) and Tech (1.45%) led the selling overnight. Other sectors in the red barely cracked half a percent lower. On the other side, Energy, Real Estate and, and Consumer Staples rallied strongly, with Energy rallying over 2%.
Technically it was surprising to see the U.S sell down overnight as they were somewhat due in the short-term following a pretty straight run higher from their recent lows. Furthermore, the rebound from key support and the uptrend line intraday last night, clearly shows the bulls remain in control. For now we continue to assume the trend will hold and that the U.S will continue grinding sidewards to higher.
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