The XJO is expected to open marginally higher this morning, following a similar move in the U.S on Friday. Their futures are flat.
It seems our market is determined to get back to all-time high resistance at roughly 9,050. We should open at roughly 9,015, so we could verry well reach it today. It is a public holiday in both NSW and QLD, so the market may be pushed on lighter volumes, but it seems more likely that the day is quiet and that most of the move happens on open. The U.S also looks like it is running out of gas at the top of the range. They may be due for some profit taking, or by the very least, a moment of consolidation. If our market loses confidence in their gains, it seems likely that we will struggle to make fresh highs. For now, we expect 9,050 to hold.
Our market’s confidence has been surprising over the past couple of sessions. The U.S has of course paved the way, but our market has less to look forward to. The Fed signalled a couple of cuts, however our RBA was relatively hawkish recently, to the point where we can’t be confident on when the next one will be. Of course, we were trading in almost a state of delirium prior to the selling in September, so perhaps we are relapsing for the moment.
With the U.S in government shut-down, key macroeconomic data is likely to remain unreleased. Their key jobs data on Friday was a no show, for example. It is expected that these data sets will be released soon after they open again.
It is a fairly quiet week. The minutes from the last Fed meeting will be released Wednesday night, and Powell will speak Thursday night. It will be interesting to see if the government shut down has affected anything on the monetary policy front, though it seems unlikely.
US Markets
US shares were mixed on Friday, with the NASDAQ closing lower after selling in technology stocks, while other sectors rising saw the DOW JONES close higher. The SP500 ended flat. The US government shutdown is ongoing, but it seems to have had little effect on the market, which remains in a very bullish slant. Markets were expected to see the release of US unemployment numbers on Friday, but they were not reported due to the shutdown. The SP500 index notched its sixth straight gain in a row, so one would assume that some profit taking would come in soon. However, even the shutdown hasn’t triggered some uncertainty. This week will be a pretty quiet one for US economic data, if it is even reported at all. However, it will herald the start of the company earnings reporting season, which begins in earnest on Thursday and Friday. Last earnings season was fairly positive, allowing markets to push a bit higher. This time around we will have to wait and see.
Seven of the eleven sector groups of the SP500 closed higher on Friday, with Utilies, Healthcare, and Financials the best performers. Discretionary and Communications stocks saw the most selling.
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