Traders will be considering if the all important top of the market is in with a price retracement in overnight markets.
1. Wall Street: After solid gains of 570 points on the DOW30 in 5 trading days the current move could have been looking a little stretched. The S&P500; is already hitting most analysts full year predictions, but the index finished flat overnight. There would be a build up of those willing to stand in front of this freight train bull market, with short positions trying to pick the top, without any evidence of real market weakness. They are brave souls in this new world order of reinflation.
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2. The bulls are running: With legendary investors Warren Buffett and Charlie Monger increasing their positions in American Airlines and Apple, a position that has reportedly already made a billion dollar profit, this bullish stage of the markets may be just be getting underway.
3. ASX: Overnight SPI futures lower by 1 point, a flat open would be expected. The BHP ADR shows $26.65 down from yesterday close of $26.94. A positive day expected on the back of a broadly upbeat reporting week, with any price consolidations being looked at as a place to enter in the aspiring bullish run to 6000 points.
4. Currencies: The AUDUSD cross again tested highs overnight at .7732 just shy of the multi month resistance of .7760.
5. Reporting season: Reports to watch for today include Medibank private, commentary will surround the number of services provided. Santos are also reporting today, investors will be looking for commentary around the debt load and the effects of the rising Oil price on cash flows.vSo far about 50% of the ASX200 companies have reported results with 70% lifting dividends and 15% have lowered the dividend.
6. Resistance ahead?: Our market now higher 7 out of 8 trading days and testing resistance at 5830 this may the point of inflection for traders as the resistance of 6000 points is tantalisingly close. Continued upbeat reporting may just allow the market to retest level in the near future.
7. Commodities: WTI Oil is testing the upper resistance levels of $54.00 in the consolidation phase, oil up 35 cents in quiet trading, the Baker Hughes rig count currently at 741 will be updated tomorrow morning 5am AEDT. With Iron Ore higher by 1.2% and the 62% Fe futures showing $89.50 / ton all is well in the broader commodity complex.
8. Market watch:
SPI futures down 3 points to 5761
AUD -0.2% to 76.91 US cents (overnight range 0.7685 - 0.7732)
On Wall St, Dow flat, S&P; 500 -0.2%, Nasdaq -0.2%
In New York, BHP +0.5; Rio +0.3%
In Europe, Stoxx 50 -0.4%, FTSE -0.3%, CAC -0.5%, DAX -0.3%
Spot gold +0.4% to $US1238.60 an ounce
Brent crude -0.6% to $US55.44 a barrel
Iron ore down -1.1% to $US90.06 a tonne
Steam coal +0.0% to $US80.00, Met coal -1.2% to $US160.00
LME aluminium -0.8% to $US1897 a tonne
LME copper -1.1% to $US6000 a tonne
10-year bond yield: US 2.45%; Germany 0.34%, Australia 2.79%
This column was produced in commercial partnership
between Fairfax Media and IG