Technically, the XJO has been tracking between resistance around 6,750 and the support of the 100 and 50 day moving averages around 6,630 – The XJO looks set to open up around the 6,750 resistance level today, and If the XJO can close above it, we would expect it to head to the all-time highest close at 6,851. If the support at 6,630 breaks, the next target to the downside after that would be a more gradual, longer-term uptrend line around 6,550. Despite a series of all-time highs on US markets, our XJO has been holding back, largely due to a weakness in bank reporting and declining iron ore prices.
US markets rose again overnight, setting another record high. The Dow closed 182.24 points higher (0.66%) and the S&P 500 was up 8.4 points (0.27%). European and Asian markets were higher as well.
There was a risk on attitude last night, with stocks and some commodities pushing higher, despite mixed signals on the trade front. Technically, the S&P500 has tracked sideways for the past couple of days before jumping today. However, the index pulled back from its highs and closed below its opening level. It is hard to say where resistance would be for the index, as the current levels are in all-time high territory. If the S&P 500 falls from here, there are potential levels of support at 3,050, followed by 3,020. If those break, 3000 is the next key level, if that goes we could start to see the index downtrend.
XJO Implied Volatility fell 5.89% and closed at 10.937%. The US volatility fell 2.91% and closed at 12.73%.
Crude bounced back strongly overnight
Gold fell strongly overnight, heading towards a potential resistance level at $1,460 before bouncing somewhat.
Iron ore continued to fall overnight, it remains in a downtrend formed over the past month or so and has now fallen a fair degree from its highs.
The Aussie dollar rose against the US again overnight.
Our market will likely rise and test 6,750 as resistance after a strong rise yesterday. We also saw another bullish move in the US overnight, although the S&P 500 did reverse from its highs to close below its opening level. NAB was the last of the ‘other three’ to report yesterday and despite a bad report, we saw the stock rise on the day – perhaps because a recent sell-off priced in poor expectations. CBA will provide a trading update on Tuesday next week and that will be it for the major banks this earnings season. Commodities are a bit of a mixed bag at the moment, with things like oil and copper outperforming iron ore, so we may see some strength in the secondary miners.