The XJO is expected to rally on open this morning, following a mixed night of trading in the U.S which saw their market retake intraday losses to finish flat. Their futures are marginally in the green.
Our market acts like a dramatic prima donna at times. Last week, we rose with gusto on the back of lower-than- expected CPI. We gave up those gains over the next two sessions. Yesterday, the sky was falling. We fell back to the previous key support at roughly 8,150, where we managed to bounce back intraday to retake roughly a quarter of the day’s losses. With the U.S rebounding intraday last night, our market is set to sheepishly crawl back more of its tantrum with an expected open near 8,235.
We should expect volatility to remain for the rest of the month with big data this week, and Trump’s inauguration early next week. It will come down to how the U.S trades, of course, and their market looks all over the place much like ours.
US Markets
It was mixed trading in the U.S overnight. The DOW and NASDAQ closed lower, but the SP500 managed to retake intraday losses to finish practically flat. It seems they aren’t finished with key support at roughly 5,830 just yet.
Most sectors closed in the green. The biggest gainers were Energy, which has seen a strong boost recently, and the Materials. Both closed over 2% higher. Health Care, Real Estate, and Industrials saw just over 1% gains. Most other sectors were mixed, and Utilities faired the worse with just over 1% losses.
It is a big news week. There is PMI data tonight, and more importantly, CPI data Wednesday night. As a result, this week is likely to continue to be hard to predict. We should continue to expect whipsawing and yoyoing as the market trying to square the data to both the health of the economy and the future of monetary policy.
The key battle ground is key support around these levels. If the U.S rallies, the next target is the key resistance at 6,000, which is also roughly where the 50 day MA comes in. Otherwise, if the market breaks lower, then roughly 5,770 key support is the next clear target.
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