The strength being demonstrated by overseas indices may drag the ASX200 to our previously targeted 7650-7700 area, but it’s not felt impressive so far in 2024. While the local index holds below the 7460 level, we remain neutral, although our “Gut Feel” is the current advance that can take the index to fresh all-time highs, similar to many of its peers.
- The SPI Futures are pointing to an open-up of +0.35% this morning, very close to triggering short-term technical buy signals.
MM is neutral towards the ASX200 short-term
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The S&P500 posted fresh all-time highs on Friday night, achieving MM’s long-standing objective in the process, but please note we wouldn’t be surprised to see further strength towards the psychological 5000 area over the coming weeks, i.e. only ~3% higher.
- With the exception of the small-cap indices, most other major US indices have now made fresh all-time highs.
- We are now adopting a more neutral stance after our objectives have been satisfied, but we haven’t turned bearish.
MM is neutral toward US equities short-term
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China’s targeted economic stimulus continues to have little impact on a beleaguered economy weighed down by disinflation, a property nightmare and high youth unemployment. We’ve been optimistic that Xi Jinping et al. would be able to steady the ship, but the results are starting to drag on the markets & MM confidence, especially in the Resources Sector, which needs China’s demand to pick up again. We’re looking for signs the index is looking for a low, and our concern could indeed be the trigger!
- The Chinese Shenzhen CSI 300 Index tested its 5-year low last week, a very different picture to the US – no buy signals yet.
MM is cautiously bullish towards Chinese equities
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