Technically, the XJO has been stalling at its all-time high resistance around 7,150. If the XJO fails at this level, it will look to have formed a double-top pattern – after twice failing to break through the all-time high resistance. However, if the XJO breaks above 7,150 – the rally will look set to continue, but with no further levels of resistance, it is hard to say where a potential rally may stall. If the XJO does fail at this level, it will have to break through the short-term uptrend line around 7,090 before further falls will look likely. If that happens, the next key support level is some potential support around 7,000 index points. If the XJO falls and closes below the 7,000 support level level – I imagine we will see further selling in our market, with 6,880 as the next key level.
US markets pushed higher again as Chinese authorities indicated they were to stimulate their economy further, as well as indications from the Federal Reserve that they won’t raise interest rates any time soon. The Dow closed 115.84 points higher (0.40%) and the S&P 500 was up 15.86 points (0.47%). Asian and European markets mostly closed higher as well.
Data released overnight showed that the housing market remains a bright spot for the US economy, with the Federal Reserve minutes indicating that officials viewed low interest rates as appropriate for some time. The S&P 500 remains on an up-trend with the index breaking above the previous resistance at 3,385. The market almost made it all the way up to 3,400 – before pulling back and closing just one point above the previous high (at 3,386). To the downside, the 3,350 level may act as something of a support level. If 3,350 goes, the market will also be breaking its short-term uptrend, so we should see some further downwards movement.
XJO Implied Volatility fell 1.24% and closed at 12.007%. The US volatility was up 4.87% and closed at 14.38%.
US oil jumped substantially overnight, continuing its recovery.
Gold jumped higher again overnight, prices are back towards GFC level highs.
Iron ore was a bit mixed again, with spot prices flat but futures jumping.
The Aussie dollar continued its fall against the US dollar.
Our market looks set to push higher on open this morning – with the futures indicating an open just above the previous level of resistance. The US markets did see a strong reversal off their highs however, so it will be interesting to see if we do the same. Markets remain extremely bullish and they are being supported by monetary and fiscal stimulus from most major Governments and Monetary authorities around the world. There are plenty of reports and dividends to come from our market in the coming weeks, so make sure you check a company’s investor calendar before making any trade or investment at the present time.