The ASX200 rallied over 0.5% yesterday although it was up over 1% moving into lunch before we saw some weakness creep into the Resources & Energy Sectors. However it was still a solid session for the local index which enjoyed over 65% of stocks on the main board advance with a few noticeably accelerating north i.e. 6 stocks rallied by over 5% while only 1 culprit retreated by the same degree.
The index closed just over 3% below its all-time high and a couple of decent sessions will now take the ASX200 into our initial 7700-7800 target area, the statistics are still voting for the bulls:
- The ASX200 again made fresh October highs on Wednesday taking its recovery from the low on the 1st to 4.1%, the average monthly range post COVID has been satisfied hence there should be no surprise that we’ve recently witnessed intra-day selling into strength.
- However the average quarterly range still suggests we should still see fresh highs into Christmas but remember we are likely to fade such an advance.
Bond yields finally took a rest yesterday and although we remain bullish initially looking for the Australian 3-year bond yields to test 1% in the coming months, from yesterday’s 0.75%, MM believes the upside momentum is likely to wane with the easy short-term money for the bulls already behind us – remember bullish bond yields / interest rates is in fact bearish the underlying bonds.
Overnight US stocks rallied towards fresh all-time highs with only a little weakness in the IT Sector holding stocks back, the SPI Futures are pointing to a firm open locally, up around 10-points – it will be interesting to see if we can shrug off the usual statistics and enjoy any decent further upside before November.
MM remains bullish the ASX targeting fresh highs in the weeks / months ahead
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