The XJO has been consolidating just below the 6666 resistance level, this level seems to be a magnet for our market lately. With the futures up today, we will likely see that level tested again. Technically the XJO is now in a short term uptrend and is testing the uptrend line and support at 6,600. If it holds we could see the XJO go back to around 6,750. If it breaks, 6,400 is the next key support level. The short term indicators are looking overbought.
US markets jump higher. The Dow closed 227.61 points higher (0.85%) and the S&P 500 was up 21.52 points (0.72%). Most other major markets also closed lower.
The S&P 500 pushed through the 2,980 resistance, leaving them only 27 points from the all-time high. Markets are pushing higher on the view that central banks will continue to ease and that China and the US are going to come to a deal. China announced last night that they will exempt certain US products from the already introduced 35% tariffs. Tonight is lining up to be a big one with US CPI, which will give us a hint on what the Fed might do next week. The ECB will also announce on monetary policy. Europe’s interest rates are zero and the deposit rate is now going into the minus, they are expecting the deposit rate to go down to 0.05% and potentially some more stimulus measures. technically the next upward target is 3027 which is the all-time high created in July, otherwise, support is at 2,975.
XJO Implied Volatility fell -2.13% and closed at 12.655. The US volatility fell -4.52% and closed at 14.61%.
Crude pushed lower overnight after trumps comments on Iran sanctions. Crude has been consolidating between $60US and $50US a barrel.
Gold continues to pull back and broke below 1,500US support.
Iron Ore broke back above 90.00US and continues to climb.
The Aussie dollar pushed higher and is holding above 68.50US.
Markets are pushing up on what could be very good reasons. But a lot of things will need to play out perfectly for this to be maintained. Starting tonight. we will see the ECB announce monetary policy, they will need to announce further stimulus to keep markets happy, Then next Thursday the FED reserve is widely expected to cut rates, Trump has put the pressure again overnight calling the Fed team “Boneheads” and is calling for rates to go back down to zero or lower. Furthermore, it will be all eyes on China and the US in October to see if they can come up with a trade deal. If all this can play out, then markets will likely continue into all-time highs, but if they don’t…….
….The USA should always be paying the the lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of “Boneheads.”
— Donald J. Trump (@realDonaldTrump) September 11, 2019
ASX Update: New Hope Corp (NHC) was up +8.5% after the Queensland Court of Appeal ruled in favour of the Company’s New Acland Coal business, overturning its previous decision to refuse lease applications for the project. Lynas Corp (LYC)was up +6.6%, after the Company signed a memorandum of understanding with the City of Kalgoorlie-Boulder for prospective sites for rare earths plants. Appen Ltd (APX) was down -5.2%, following an overnight decline in its wall street peers.
Today’s trading. In the U.S., data on CPI, Initial Jobless Claims and Continuing Claims is anticipated. In Japan, we get data on PPI and Core Machine Orders.