The XJO is expected to edge higher on open this morning following a small bounce in the U.S overnight. U.S futures have moved into the red.
It seems the battle ground is roughly around 8,550 to 8,600 – a firm level of resistance that represents all-time highs. Our open this morning is practically the same as our open yesterday.
Yesterday we held much of the opening gains through the session, however by close we had shed them to finish in the red. Pressure of both red Asian markets and red U.S futures likely brought us back in line. Regardless, there is a clear reluctance in our market to commit either way at the moment.
The U.S is also consolidating sidewards. They remain near their all-time highs but have yet to reach them. We have clearly outpaced the U.S, and one must wonder how long we can keep it up. Both markets look tired, but we should continue to assume the ascending channel locally, and the uptrend in the U.S, will hold for now – albeit very cautiously.
US Markets
US shares opened lower overnight but buyers returned throughout the session to push US shares into the green. The gains were despite a bigger than expected rise in US jobless claims, though producer prices didn’t rise by as much as expected in May, perhaps assuaging some fears around tariff related price increases. US markets do look toppy though after the stunning recovery of the past 6 weeks. There is no major data from the US tonight or over the weekend, though there are expected to be major protest in the US this weekend. Additionally, a US-backed Israeli strike on Iran is looking increasingly likely and could force oil prices higher. It does feel like while shares are grinding higher and upside looks more likely, room to the upside looks small, while a move to the downside looks to have a lot more potential room to fall.
Eight of the eleven sector groups of the SP500 closed higher overnight, with Utilities and Technology stocks the best performers. Communications and Discretionary stocks saw the most selling. Most sectors were again fairly flat.
Technically, the SP500 has pushed through two resistance levels at roughly 5,975 and 6,000. With these levels breaking, from a technical perspective, further gains to look likely. The next major level to the upside is the all-time high at roughly 6,120. Should the index break its uptrend line, that is where we could see more selling.
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