The XJO is expected to rally on open this morning following renewed buying in the U.S overnight which saw their market retest their all-time high resistance. Their futures have also moved into the green.
Yesterday we closed firmly in the red, falling through the session as we perhaps lamented the rate hold surprise. With the U.S overnight rebounding from their previous all-time high support, our market feels comfortable retaking all of yesterday’s losses.
We should open near 8,600. It is around here that our market has been fighting a hard battle, grinding along all-time high resistance. We likely need to see the U.S break higher once again for our market to feel comfortable following suit. For now, we should expect resistance to hold and our market to continue trading in the channel.
US Markets
US shares jumped higher overnight, led by strength in Technology shares, though many sectors saw buying. NVIDIA became the first stock to reach a $4trillion valuation overnight, with US money printing continuing to drive prices higher. Trump released some of the trade letters overnight, which tariff rates mostly in line with what he previously proposed – soothing some investors’ worries. Overnight we also saw the release of the FED meeting minutes, which showed that the FED is unlikely to cut in the short-term, with members pointing to “considerable uncertainty”. This wasn’t enough to phase markets however, which could also be due to the fact that the FED certainly isn’t looking to raise rates any time soon. There really isn’t much scheduled for the rest of the week, so US shares could easily hold or push higher.
Eight of the eleven sector groups of the SP500 closed higher overnight, with Utilities, Technology, Communications, and Discretionary the best performers. Energy and Staples saw the most selling.
Technically, the SP500 has recently pushed through the previous all time high resistance at 6,150. With this level breaking, we would expect further upside, though the market have have recently found some resistance around 6,300, this level would have to break for further gains to look likely. The previous resistance at 6,150 which may now act as support.
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