Cautiously optimistic
January 5th, 2009 by Antony Ganzitti
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 9034.69 | 258.3 | 2.9% |
| NASDAQ | 1632.21 | 55.18 | 3.5% |
| S P 500 | 931.8 | 28.55 | 3.2% |
| FTSE 100 | 4561.79 | 127.62 | 2.9% |
| Nikkei 225 | 8859.56 | 112.39 | 1.3% |
| SPI Futures | 3649 | 28 | 0.8% |
| All Ords | 3,515.00 | 46.7 | 1.3% |
| Oil | 46.17 | 6.92 | 17.6% |
| Gold | 879.5 | -4.8 | -0.5% |
| Silver | 11.49 | 0.195 | 1.7% |
| Aluminium | 1492 | 37 | 2.5% |
| Copper | 3071 | 169 | 5.8% |
| Lead | 1040.5 | 91.5 | 9.6% |
| Nickel | 12710 | 1900 | 17.6% |
| Tin | 11550 | 1195 | 11.5% |
| Zinc | 1220.5 | 100 | 8.9% |
Market watchers can expect a positive start to what will be the first full week of trading on the local bourse today. Offshore leads point to a strong open for the XJO/ASX200 index, with gains in commodity prices likely to underpin interest in resource stocks. A strong session on Wall Street Friday saw the Dow Jones close up 258 points at 9034, translating in a 107 point gain for the SPI futures at 3785.
I made the call early last month that we would be targeting a rally to 4000 on the XJO. This fell 286 points short, but I believe it was more a matter of running out of time rather than the index not having enough gusto to get back to those levels.
Below we can see a daily chart of the XJO. Over the last month it appears that we have formed a saucer bottom, after rallying off the November lows. The target of the saucer is 4010, based on the distance between the bottom and top of the saucer range, and adding it on to the high. A small A-B-C target also exists which targets 3999 (based on adding the November 525 point rally to the bottom of the saucer range).
December was really a lacklustre month, however with the previous selling cycle now exhausted, retailers spooked out of the market, and margin call activity severely dried up, it seems that the natural market progression is for prices to move higher, albeit cautiously.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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