The expected rally on open this morning has us once again trading at roughly 6200. This is a magnet for our market, not letting it stray too far. Indeed, yesterday we saw a miraculous reversal from heavy morning losses to put us back into the consolidation range.
The SP500 is trading in a descending triangle, testing both key support and the short-term downtrend line in overnight trading. Unlike our market, the pressure has been to the downside over the past couple of weeks but unwilling to break roughly 3400.
Expect volatility to continue across markets as we edge closer to the U.S election.
The XJO is expected to open higher this morning on the back of positive leads from the U.S overnight and their futures this morning. Once again, 6200 is acting as magnet, not letting the market stray too far.
Yesterday it looked like we were going to break lower but come the end of the day we had virtually reversed all our losses. This clearly expresses that the bullish sentiment remains, though not enough to make fresh post fall highs at this stage.
US shares rose overnight as the 10-year treasury yield rose to its highest yield since June. US markets were also helped higher by positive economic data, with better than expected jobless claims and existing home sales numbers. US companies are also reporting earnings for the third quarter at the moment and once again, more than 75 percent of reporting companies are exceeding their expectations.
However, unlike previous periods, these ‘beats’ haven’t necessarily been enough for the stock to rise. Oil & Gas stocks were the strongest performers overnight, while Telecoms and Healthcare stocks also rose strongly. Every other major sector also closed higher except for Technology, which ticked off slightly.