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The ASX was down early however a more dovish speech from RBA Governor Philip Lowe got the buyers off the sidelines pushing the market higher by the close. Again it was the Energy stocks that led the charge – an impressive ~4% gain and the sector looks great for higher levels in the near term – we’ve flagged this for a while and it’s been stubborn – then again so was Uranium before it popped!
The ASX200 enjoyed another classic 2021 day to kick off the week, it may not have managed to close on its highs but the local index still recovered from early weakness to close up 0.25%. The number of winners and losers was pretty evenly matched but the aggressive buying which rolled through much of the Resources Sector was more than enough to offset loses elsewhere e.g. OZ Minerals (OZL) +4.2% and Pilbara Minerals (PLS) +7.3%. MM remains both bullish and overweight the Resources Sector but following our purchase of Alumina (AWC) yesterday it’s probably now time to sit back…
The final hour of power as one trader on Bloomberg put it this afternoon with the ASX rallying +25points to close up on the day driven largely by the Energy & Material stocks. Uranium stocks on fire again today and plenty of queries from subscribers around our sale of Paladin (PDN) last week ~95c, was it too early? Maybe but we’ll likely get another chance in the sector in MM’s view however volumes are huge – hot money now finding it’s way there.
We are making changes to 4 Market Matters Portfolio’s today:
The ASX200 and global equities have rallied strongly since their early 2020 COVID meltdown with virtually all major indices posting fresh all-time highs in recent weeks but there might be a new canary in the coal mine, the main question being will it be around for just a few weeks, or much longer. Firstly lets reiterate 3 of the main reasons stocks have “wobbled” in recent sessions:
The ASX200 experienced some September wobbles last week finally closing down 116-points / 1.5%, all 11-sectors closed in the red with the Materials & Real Estate stocks worst on ground. Fridays was a classic mean reversion session with many stocks which endured a tough week managing to bounce, and vice versa. A couple of themes caught my attention through the relatively volatile week:
The ASX bounced back tentatively today recovering a third of yesterday’s decent decline – most buying in the Material stocks supported by IT and Energy which suits MM’s current positioning – healthcare lagged. Overall, a good session to end a soft week.
The ASX200 was clobbered yesterday falling -1.9% plumbing levels not seen since late July as broad-based selling washed through our market, noticeably the “dip” buyers failed to surface as we broke down out of the last few weeks trading range. Only 3% of the main market managed to close up on a day when all pockets of the market suffered, almost 15% of the market retreating by -4%, or more.
The market opened lower this morning and instead of buyers emerging into the dip we got the opposite with a consistent sell-off right across the market with 191 stocks from the ASX 200 closing lower on the day. All sectors finished in the RED however IT felt post pain down ~3%. Green was a scarce colour on the screen and aside from the VIX there were only two stocks that rose more than 1%, namely Resmed (RMD) & Whitehaven Coal (WHC).
The ASX200 continues to rotate around the 7500 area, give it another 9-more days and it will perfectly mirror the 201-point pullback in June / July from both a time & price perspective. Wednesday was a quiet day even while it delivered another recovery from early weakness, we finally closed down -0.2% with less than 30% of the main board managing to close in positive territory. Interestingly Australian stocks still haven’t experienced a 5% pullback in 2021 yet Bitcoin ($US) managed to plunge -15% in just 2-hours on Tuesday illustrating perfectly…
