The XJO is expected to open higher this morning near 9,050 at time of writing. This follows a U.S session which saw their market extend the bounce from their key support and finish firmly in the green. Their futures are flat.
Yesterday we managed to hold on to our gains. The previous two sessions had seen us give up our intraday gains to finish below our open, but yesterday we showed commitment, albeit meagre.
9,100 represents our all-time high resistance – a level we proved same time last week. Today’s positive open will be our fourth day of gains, and coupled with a U.S that is trading in a channel and hanging around their 50 day MA, it would be hard to expect fresh highs before the week is out.
At this stage, we would likely need to see the U.S break higher for our market to do so as well. However, considering the broader underlying uptrend, and the bullish signal from the U.S, we can only assume that will be the case eventually.
Now that we have reset ourselves with a few days of cooling, our market is in a good position to make a fresh high. However, more often than not, our market will pullback immediately after doing so. It is very rare to see our market make consecutive fresh all-time highs. So, even if there are more gains to come, we should see another cooling soon after.
US Markets
US shares rose overnight, though they pared gains after minutes from the Fed’s last policy meeting showed that while the vast majority of policymakers voted to keep rates on hold, they were split over what might happen next, with “several” officials open to lifting rates if inflation persists. Notable gains were seen in Nvidia, Amazon and other technology-related heavyweights following recent jitters about artificial intelligence. Volume on the market was light, but things are still looking mostly positive for US shares. The next major test for US shares will come on Friday night Australian time, with the PCE price report – the FED’s chose inflation measure. This report will either support or destroy the case for more rate cuts, so we would expect to see movement following the report.
Eight of the eleven sector groups of the SP500 closed higher overnight, with Energy, Discretionary, and Technology the best performers. Utilies and Real Estate stocks saw the most selling.
Technically, the SP500 has bouncef from the support level at 6,800 after testing this level for the past few sessions. With the index now potentially forming a channel between this support and the all-time high at 7,000, and with the bullish candlestick overnight, we would now expect a technical rise to the all-time high resistance at 7,000. However, the market did seem to react to the 50-day moving average, which held as resistance overnight. Regardless, the stochastic has also turned higher near the bottom of the range, which also suggests gains. We have to assume 7,000 will hold as resistance for now, but if it breaks, further upside would be expected.
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