Following yesterday’s conclusive rejection of the 7000 area, albeit under the influence of the US Fed our preferred scenario is local equities now spend a few weeks regaining their breath before attempting another foray on the upside but we shouldn’t forget that until further notice we regard this as a bear market rally and as such MM is likely to de-risk into such strength, ideally in the 7200 area but obviously all stocks will be evaluated individually.
US equities experienced a choppy session overnight while UK stocks rallied even after the BOE hiked 0.75%, their largest move in over 30 years, plus they flagged the longest recession was coming since 1955 i.e. there’s plenty of bad news already baked into this particular cake. The S&P500 ultimately closed down -1.1% and the SPI Futures are pointing to a -0.35% drop early this morning.
- MM still believes the ASX200 is set to test the 7200 area into Christmas with any surprises still likely to be on the upside.
MM remains bullish on the ASX200 into Christmas
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