The Australian market is looking at a higher open this morning after a strong US session. However, heading into an Easter long weekend, we could see relatively subdued movement, as traders and investors may not be willing to take positions into the weekend. Technically, our XJO looks likely to rise to the recent resistance level around 5,300 this morning. A break above 5,300 would likely indicate further bullish movement, but a hold of this level would mean that the current channel (5,300- 5,000) will likely continue for some time yet.
US markets rallied overnight with Russia indicating willingness for oil production cuts. The Dow closed 779.71 points higher (3.44%) and the S&P 500 was up 90.57 points (3.41%). European and Asian markets were mostly lower however.
The S&P 500 index has now technically entered a bull market by rising more than twenty percent from its lows. The rally overnight has been helped by strength in the oil price, with it looking increasingly likely that OPEC+ will cut production to reduce the oil supply glut. OPEC+ will meet tonight to confirm this. The market was also enthused by talk from US officials that the worst case scenario with the virus seems to have been avoided, and that they are planning on how to safely reopen the economy in the coming months. Technically, the S&P 500 rallied back to the resistance around 2,750 – which it had failed at the session before. The market is currently sitting on this level and if it can close above it, we should see the index continue to the next resistance level around 2,900. To the downside, there is some support around 2,500.
XJO Implied Volatility was up 6.11% and closed at 34.668%. The US volatility fell 7.73% and closed at 43.35%.
US oil rose overnight with hopes of OPEC supply cuts.
Gold rose overnight, but has since dipped slightly on reopen.
Iron ore rose overnight. Prices remain strong.
The Aussie dollar rose strongly again overnight. It has now risen fairly strongly from its lows.
Our market looks set to enjoy some strength heading into the long-weekend, which will hopefully provide some much needed Easter cheer for battered investors. It will likely be a weekend spent mostly indoors, with lock downs still in place across much of the world. One place that is starting to ease its lock downs is China and the success of the easing there will provide a road map for other nations on when and how they can start getting things back to normal.
From myself and the team at TradersCircle, have a great Easter Break!
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