The ASX200 is falling as we’ve been anticipating although most of the action is unfolding on the stock & sector level, our best guess is the local index will consolidate around the 6900 area although considering our view on bonds and the current picture with some influential names a deeper move wouldn’t surprise us.
- We feel far more in tune with the controlling bonds and stocks/sectors in comparison to the underlying index which is a good thing as this is our focus at MM.
- However our “Gut Feel” is the 6900 area represents a good level to start slowly increasing risk while leaving plenty of ammunition to keep buying a deeper move.
- September could easily be a month of begrudging consolidation as different sectors take it in turn to support a heavy index.
US stocks closed mildly lower overnight in a choppy session that saw tech stocks pass on the worst performer baton to the Real Estate Sector, but overall it was a quiet session as people wait for some clarity on the likely Fed hiking path from the Jackson Hole central bankers symposium later this week. US 10-year bonds remained firm above 3% as traders brace themselves for a hawkish message from the Fed. The ASX200 is set to open slightly higher this morning following no major leads from overseas.
MM is mildly bearish the ASX200 in the 6950 area
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