The XJO is expected to rally on open this morning following a break higher in the U.S overnight. U.S futures are flat.
Yesterday we were rather indecisive, both giving up intraday gains and retaking intraday losses to finish fairly flat. With the U.S breaking higher, our market is expected to flirt with the previous all-time high resistance levels which comes in around 8,350 to 8,400. We should stick our head through, though we will likely need to see U.S futures move into the green to continue higher and commit to the break. If we managed to do so, then roughly 8,450 is the next key level – an intraday resistance we made on Tuesday.
It was a quiet week for news, so it isn’t too surprising to see the U.S continue higher and our market follow suit in the absence of anything concerning. Equally, we shouldn’t be surprised to see markets profit take or continue sideward with any key news next week. Markets will continue to digest the recent presidential election and the future of monetary policy and the broader economy in general. For our market, it would seem unreasonable to expect much further gains considering how expensive we are, but strange things are happening, and we are once again showing a keen willingness to follow the U.S higher. We have no real other choice but to maintain a cautious position of bullish to sideward.
US Markets
US shares closed mostly higher overnight, with the DOW JONES jumping strongly, while the SP500 rose moderately, and the NASDAQ was flat. US shares initially traded lower after an apparent escalation in the Ukraine conflict, with Russia launching nuclear capable missiles at Ukraine for the first time. This initial selling was quickly waved off by the market however. US economic data was mixed overnight, with higher than expected ongoing jobless claims, but fewer than expected new jobless claims. It seems that none of that really matters however, as the bullish momentum looks set to push markets back towards their recent peaks regardless of any news or events.
Nine of the eleven sector groups of the SP500 closed higher overnight, with Utilities, Financials, Staples, Industrials, and Materials all rising strongly. Communications stocks saw the most selling.
Techically, the SP500 looks to have bounced off support at the previous all-time high at roughly 5,880. Given a bounce off this level, we could see a move back to the recent resistance around the 6,000 point level.
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