The XJO is expected to rally on open this morning.
Yesterday, despite red U.S futures during our session, our market managed to reverse intraday losses and finish mildly in the green. The U.S managed to do the same thing last night, after poor PPI and Core Retail sales numbers spurred further hope of cuts from the Fed.
It seems markets are huffed up on the idea of rate cuts still. Last night the U.S got another dose. Our market is equally optimistic, with there being a strong expectation the RBA will cut rates next Tuesday.
We should open near 8,380 (at time of writing). 8,350 to 8,400 is the next key level of resistance. It would be hard to expect too much more from our market today so we should expect most of the gains to happen on open.
Our immediate term indicators like the stochastic didn’t have much time to normalise and remain overbought. Today’s renewed vigour will make it more so. From here, there is practically a key level of resistance every 50 points until we reach all-time highs at roughly 8,600. A month ago, it would have been wild to suggest we are heading back there, but now it seems almost likely.
Of course, it can all end in tears if Trump opens his mouth. However, it seems he has sort of learnt his lesson for now: don’t mess with capital markets, the true masters of the world.
US Markets
US shares were again mixed overnight, with gains in the NASDAQ and SP500, while the DOW JONES closed flat. The SP500 managed to reverse opening losses to finish mildly in the green. They were likely spurred on by poor PPI and core Retail Sales numbers, giving credence to the idea that rate cuts are on their way. Now that Trump has capitulated on the tariff front, there is a stronger chance the Fed can now cut rates to tackle the declining economy.
In reverse of yesterday, the only sectors in the SP500 to finished in the red (albeit marginally) were Tech, Comms, and Consumer Disc. The other eight saw reasonable gains with Utilities and Consumer Staples fairing the best at over two per cent gains.
Technically, the SP500 remains in an uptrend. The past few sessions have seen the SP500 practically consolidate, griding along roughly 5,870 support. Their consolidation follows their large gap higher. There is some resistance around here, but the next key level seems to be around 6,000. Though it doesn’t seem likely they make leaps and bounds, we should assume the trend will hold and that further gains are on the table. Of course, Trump could break that theory.
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