The ASX200 is set to open down around 20-points this morning following a late but aggressive sell-off on Wall Street as the market appeared reticent to go home long ahead of the Labor Day Weekend. We still believe the local market will struggle to test or break below the 6400 level but certain stocks/sectors definitely look vulnerable to breaking their 2022 lows:
Our preferred scenario is the ASX200 will now rotate around the 6800 area before having another look on the downside.
We see further underperformance by the resources stocks compared to the banks and tech names.
We will be monitoring MM’s triggers that it’s time to start accumulating stocks but even though we are overweight cash the plan remains to buy companies we like in our identified levels as opposed to picking the low for the index i.e. stocks/sectors are running their own individual race.
MM remains neutral to bearish the ASX200 short-term
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