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:
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%:
Australian stocks are knocking on the door of our technical breakout level and as subscribers know we believe fresh highs are likely into Christmas, our best guess is around 5% higher. However subscribers also know we like to look into the future, especially in today’s rapidly evolving market – its amazing what the ASX has already delivered in 2021 e.g. BNPL stocks moved out of favour while lithium returned back to the limelight, crude oil surprised everyone on the upside but iron ore halved in a few weeks while bond yields had some of their most explosive weekly moves in history. What we feel comes next is both exciting and potentially scary for those not prepared.
The ASX200 rallied 0.5% on Thursday as the Financial & IT Sectors teamed up to drag the index towards fresh 4th quarter highs, it doesn’t feel like it but we’re now only 2.7% away from new all-time highs and its slowly starting to feel like when, not if, we reach that milestone. The stock and sector rotation might be dominating the tape day to day and week to week but there’s a distinct absence of sustained selling unless a company, or sector, receives some meaningful bad news e.g. Dominos (DMP)...
The ASX200 rallied 0.9% yesterday although as has often been the case recently it peaked at midday before drifting 40-points through the afternoon following a nervous lead from US futures – unfortunately at the moment we’re embracing weakness in the US with far more enthusiasm than strength. Gains were encouragingly broad-based on Wednesday with over 70% of stocks closing up on the day with line honours going to the recently under pressure resources and financial stocks, it was also...
The ASX200 again surrendered early gains on Tuesday and we ended the day down 0.6% with around 65% of stocks closing in negative territory, not a good Melbourne Cup for Australian equities. The value stocks were the standout losers as the market continued to worry about rising interest rates stifling global growth i.e. Financials -1.3%, Energy -1.1% & Materials -2.1%. China also continues to pressure the influential Australian iron ore and coal names but with panic comes both market tops and bottoms and as subscribers...
Monday saw some healthy intra-day strength within the iron ore names and we feel they are now at or very close to a low hence making them excellent risk / reward buys – probably the question I’ve heard the most over recent weeks has been “when should we buy BHP, RIO, FMG etc” , MM thinks the answer is basically now. If the banks can regain their mojo sooner rather than later then we feel the ASX will be looking good into Christmas assuming there are no hand grenades lobbed in the market by the RBA at 2.30pm today, after which of course the nation has just 30-minutes to digest the news before casting there eyes to the nearest TV screen to watch 24 horses run 3200m in around 3.3 minutes – apparently, Incentivise is going to win!
Australian stocks succumbed to the ever increasing weight of interest rate speculation on Friday, the aggressive weakness on the last day of October actually resulted in it being a down month. Fortunately the US reversed losses by their futures during our time zone to make fresh highs on Friday which should provide a much needed boost to stocks this morning – the SPI futures are pointing to early gains of almost 1%. The specific pressures around the RBA appear to be the reason for the ASX’s position in the underperformance corner last month:
The ASX200 slipped 0.25% yesterday but considering the generally negative leads from overseas indices and sheer panic that washed through Australian interest rate markets it actually felt like a solid performance. The selling frenzy that’s washed through bonds this week feels akin to how stocks plummeted when COVID first raised its head although its coverage is primarily limited to the financial press, for now:
The ASX200 climbed to fresh October highs yesterday morning only to get clobbered at 11.30am when markets saw Australia’s inflation rate significantly surprise on the upside – the RBA’s preferred gauge, the CPI trimmed mean YoY, came in at 2.1% for the 3rd quarter compared to expectations of 1.8%, importantly the economy is rapidly approaching the RBA’s 2-3% target band for the first time since 2015 when the cash rate averaged over 2% compared to todays 0.1%.
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%:
Australian stocks are knocking on the door of our technical breakout level and as subscribers know we believe fresh highs are likely into Christmas, our best guess is around 5% higher. However subscribers also know we like to look into the future, especially in today’s rapidly evolving market – its amazing what the ASX has already delivered in 2021 e.g. BNPL stocks moved out of favour while lithium returned back to the limelight, crude oil surprised everyone on the upside but iron ore halved in a few weeks while bond yields had some of their most explosive weekly moves in history. What we feel comes next is both exciting and potentially scary for those not prepared.
The ASX200 rallied 0.5% on Thursday as the Financial & IT Sectors teamed up to drag the index towards fresh 4th quarter highs, it doesn’t feel like it but we’re now only 2.7% away from new all-time highs and its slowly starting to feel like when, not if, we reach that milestone. The stock and sector rotation might be dominating the tape day to day and week to week but there’s a distinct absence of sustained selling unless a company, or sector, receives some meaningful bad news e.g. Dominos (DMP)...
The ASX200 rallied 0.9% yesterday although as has often been the case recently it peaked at midday before drifting 40-points through the afternoon following a nervous lead from US futures – unfortunately at the moment we’re embracing weakness in the US with far more enthusiasm than strength. Gains were encouragingly broad-based on Wednesday with over 70% of stocks closing up on the day with line honours going to the recently under pressure resources and financial stocks, it was also...
The ASX200 again surrendered early gains on Tuesday and we ended the day down 0.6% with around 65% of stocks closing in negative territory, not a good Melbourne Cup for Australian equities. The value stocks were the standout losers as the market continued to worry about rising interest rates stifling global growth i.e. Financials -1.3%, Energy -1.1% & Materials -2.1%. China also continues to pressure the influential Australian iron ore and coal names but with panic comes both market tops and bottoms and as subscribers...
Monday saw some healthy intra-day strength within the iron ore names and we feel they are now at or very close to a low hence making them excellent risk / reward buys – probably the question I’ve heard the most over recent weeks has been “when should we buy BHP, RIO, FMG etc” , MM thinks the answer is basically now. If the banks can regain their mojo sooner rather than later then we feel the ASX will be looking good into Christmas assuming there are no hand grenades lobbed in the market by the RBA at 2.30pm today, after which of course the nation has just 30-minutes to digest the news before casting there eyes to the nearest TV screen to watch 24 horses run 3200m in around 3.3 minutes – apparently, Incentivise is going to win!
Australian stocks succumbed to the ever increasing weight of interest rate speculation on Friday, the aggressive weakness on the last day of October actually resulted in it being a down month. Fortunately the US reversed losses by their futures during our time zone to make fresh highs on Friday which should provide a much needed boost to stocks this morning – the SPI futures are pointing to early gains of almost 1%. The specific pressures around the RBA appear to be the reason for the ASX’s position in the underperformance corner last month:
The ASX200 slipped 0.25% yesterday but considering the generally negative leads from overseas indices and sheer panic that washed through Australian interest rate markets it actually felt like a solid performance. The selling frenzy that’s washed through bonds this week feels akin to how stocks plummeted when COVID first raised its head although its coverage is primarily limited to the financial press, for now:
The ASX200 climbed to fresh October highs yesterday morning only to get clobbered at 11.30am when markets saw Australia’s inflation rate significantly surprise on the upside – the RBA’s preferred gauge, the CPI trimmed mean YoY, came in at 2.1% for the 3rd quarter compared to expectations of 1.8%, importantly the economy is rapidly approaching the RBA’s 2-3% target band for the first time since 2015 when the cash rate averaged over 2% compared to todays 0.1%.
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