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Friday saw the AX200 close out the week little changed courtesy of a 4.7% rally by the Resources Sector, the other 10 sectors all declined over the week with the interest rate sensitive Healthcare, Real Estate and IT Sectors worst on ground. The local index actually felt worse last week due to the broad based nature of the selling but we’re still only 2.5% below Augusts all-time high. We witnessed another failed attempt on the 7475 resistance level on Friday, if / when we close above 7480 don’t be short is the message I would pass on to traders.
A good way to end a volatile week with the ASX up ~0.80% and despite a few large swings and the feeling of a tough week, the market actually only ended at 7443, down 0.19% and just ~30pts below key resistance. Healthcare, Real-Estate & IT stocks were the 3 laggards which is understandable given the backdrop of higher rates although all sectors bar Materials finished in the red. Resources had a great week underpinned by a resurgence in Gold, a bounce in Iron Ore and continued strength in battery metals, the sector up nearly 5% which is encouraging given our large tilt towards this space.
The ASX200 saw some standout sector reversion yesterday plus some rare selling in the futures market following weak local employment data, ultimately we saw the index fall 0.57% as the broad based selling led to almost 70% of the index close in the red. The iron ore stocks offered some rare strength to the index while weakness was noticeably endured in the Healthcare, Energy and IT Sectors. The choppy price action continues with the index trading in an almost 100-point range on Thursday before closing almost smack bang in the middle of the day’s action while sectors that have been…
A very volatile session today for local stocks as big volume through the futures market pushed the market down ~40 points in short order this morning ahead of a much weaker than expected employment print provided the catalyst for another leg lower – the ASX 200 down -94points at the lows, before a spirited fightback after lunch meant we closed +52pts up from the days nadir. Not one for the faint hearted today and the volatility was very much focussed locally.
Flagship Growth Portfolio: Selling Z1P & buying NST
Active Income Portfolio: Selling IAG, adding to BHP & buying MFG
Emerging Companies Portfolio: Selling KGN & buying SSG
The ASX200 again succumbed to selling into early morning strength as we followed US S&P500 futures lower throughout the day, considering their 0.4% decline by 4pm AEST a small 0.1% dip by the local market was fairly encouraging, especially as iron ore plunged almost 8% at one stage weighing on both sentiment and related stocks. Fortunately from an index perspective the influential banks were strong and 40% of the market still managed to close in positive territory. The markets look and feel remains the same which is no surprise considering the ASX remains unchanged…
The ASX was again looking optimistic early on as SPI Futures debunked overseas weakness but true to recent form, key resistance as detailed on the daily chart below provided an impenetrable wall that capped the markets gains, and as US Futures tapered off we simply trickled lower throughout the afternoon.
The ASX200 faded away yesterday following a common path over recent weeks, every time the ASX200 knocks on the 7475 door it gets sold off, no longer surprising or new – at yesterdays close the local index had only bounced 4% from its October low compared to the US S&P500’s impressive 10% rally to fresh highs. The US feels like it’s now due a rest posing the question can we buck any weakness after ignoring the strength, it does happen sometimes. The problem was 2-fold yesterday:
Another session where the ASX was looking strong (ish) however hit the skids at key resistance and sold off into the afternoon. Sector rotation again to only real game with the batten changing daily, Yesterday Energy led the line on the upside while IT was weak, the opposite played out today plus the heavyweight financials also copped some selling.
The ASX200 again faltered at the 7475 level yesterday, from a technical perspective the pictures getting clearer by the day – when / if the ASX200 closes above 7475 it’s a great buy targeting fresh highs with stops under 7440, excellent risk / reward for the trader. However at MM we are “Active Investors” and as such we’re more focused staying fully committed to stocks until we lose our bullish stance and advocate moving further down the risk curve. The price action yesterday felt more like a lack of buying into strength as opposed to meaningful selling as a number of stocks, courtesy of low volumes, swung around in a fairly exaggerated manner for a day when the index fell less than 0.1%:
