The XJO is expected to rise around 20 points on open today, with the futures pointing to an open news 8,850.
The XJO did test the resistance around 8,880 yesterday on open, but we quickly pulled back into the red after CBA’s quarterly report led to strong selling in our largest stock. The bank reporting has not been good relative to share prices, and with iron ore falling for the past week or so, it is hard for our market to rise here. Especially given that the RBA is more hawkish than a few months ago.
US shares closed higher overnight despite a lower open and those positive leads have push our futures higher today. US shares do look positive in the short-term, with their government reopening and expectations of another FED cut helping to push their market back towards highs. As long as they remain positive, it will be hard for the XJO to fall.
For the time being, that leaves the XJO looking pretty sideways, with the 8,880 resistance the level to watch to the upside, and the 8,740 the support level to watch to the downside. We would need to break either of those levels for a directional move to look likely.
Tomorrow we will see Australian unemployment and that could trigger some movement.
US Markets
US shares opened lower overnight, with selling in technology stocks leading prices lower initially. However, prices rebounded throughout the session to finish in the green. Technology was the only sector to fall, while every other sector rose. The gains come after the US senate passed a deal to end the government shutdown. The deal still needs to be approve by Congress, but that looks likely. NVIDIA shares fell strongly and were the biggest drag on the indices.
Ten of the eleven sectors of the SP500 closed higher overnight, with Healthcare, Energy, Staples, Real Estate, and Materials the best performers. Technology stocks were the only ones to close lower on average.
Technically, the SP500 has continued higher after bounced from its longer-term uptrend line, which is also the lower bound of an ascending channel. The index has been on an uptrend and potentially an acsending channel but had worked its way back to the bottom of the channel. With a bounce from the bottom of the channel (and also a support level and 50-day moving average), we would now expect a rise back to the all-time high resistance of 6,900, or beyond. The stochastic is also turning to point higher from the oversold range, which also confirms a likelihood of upwards movement.
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