The ASX200 fought hard to bounce yesterday finally closing up +0.4% with over 60% of stocks closing in positive territory. The interest rate sensitive sectors largely outperformed with IT and Real Estate catching my eye but the more interesting action was on the stock level with 13 stocks rallying by over 4% while 10 names fell by the same degree. Overall this volatility on the company level appears reflective of both reporting season and the “twitchy” nature with which investors are reacting to corporate news as the market remains close to its all-time high.
Following its 203-points / 2.6% pullback we feel the market is at a 50-50 pivot point which could easily take a few days to provide an answer:
- In June / July we also declined 200-points, if this is the controlling rhythm of the market stocks should rally and we will again look to tweak our market exposure lower into fresh highs i.e. 2 steps forward, one back.
- Alternatively we could see a more meaningful retracement with 7200 the most obvious technical support – MM would be adopting an aggressively bullish stance if this unfolded.
When we consider that heavyweights Commonwealth Bank (CBA) -9.2% and BHP Group (BHP) -19.6% have already fallen pretty hard in recent weeks I wouldn’t be surprised to see the market frustrate the buyers lurking in wait hoping to snap up some bargains, my “Gut Feel” is either the markets already looking for / found a bottom, or the pullback will fall short of the obvious and hold say the 7300 area. The clearest fact is things are “hotting up” which is the perfect environment for active investors like ourselves – assuming we get it right of course!
Overnight US stocks enjoyed broad based gains with the tech based NASDAQ rallying +1.5% leading the pack, recovery optimism took centre stage after the U.S. Regulators granted Pfizer full approval for its vaccine made with BioNTech. Crude oil surged over 5% on the sniff that the Delta Variant wouldn’t derail the global economic recovery. Locally the SPI Futures are only pointing to a slightly higher open following the sentiment damage of recent sessions.
MM remains a buyer of weakness across most stock market sectors
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