Dow up 46 points as confidence returns to market
September 16th, 2010 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 10,572.73 | 46.24 | 0.4% |
| NASDAQ | 2,301.32 | 11.55 | 0.5% |
| S P 500 | 1,125.07 | 3.97 | 0.4% |
| FTSE 100 | 5,555.56 | -11.85 | -0.2% |
| Nikkei 225 | 9,516.56 | 217.25 | 2.3% |
| ASX 200 | 4,661.50 | 35 | 0.8% |
| COMEX Gold - Dec 09 | 1268.7 | -3 | -0.2% |
| COMEX Silver - Sep 09 | 20.571 | 0.139 | 0.7% |
| COMEX Copper - Sep 09 | 346.65 | -0.2 | -0.1% |
| WTI Spot | 76.02 | -0.78 | -1.0% |
| AUD-USD | 0.9383 | -0.0011 | -0.1% |
| Aluminium | 2,117.50 | 16 | 0.8% |
| Copper | 7,595.00 | 78 | 1.0% |
| Lead | 2,196.50 | 7.5 | 0.3% |
| Nickel | 23,180.00 | 340 | 1.5% |
| Tin | 22,860.00 | 665 | 3.0% |
| Zinc | 2,119.00 | -11 | -0.5% |
The Dow closed up 46 points, on the back of speculation of increasing merger and acquisition deals; with corporate action in the pipelines indicating increasing management confidence. The Dow closed around yesterdays high, testing resistance again at 10600. A good sign is that the Dow has now been trading three trading sessions above the 200 day moving average of 10450. Today, Japan may intervene in the foreign-exchange market for a second day to stem the yens gain, which has reached a 15-year high against the dollar, to protect its exporters. Japanese shares are sharply higher following the rounds of intervention by the Kan government yesterday. Shares in Japan have been under pressure as the Yen appreciated strongly in recent months as Japans basic focus remains upon exports. The Nikkei Stock Average posted its biggest gain in over five weeks, rising 2.3% to 9516.56 led by exporters such as Toyota Motor Corp. and Sony Corp. It is interesting to see that the AUD/JPY cross rate is breaking out of a recent trading range. As there is a strong correlation between the AUD/JPY cross rate and Australian banks, this move could see a push in our big four banks as short positions in the market continue closing out pushing up their stock prices. Gold prices remain in a seven-week-old uptrend on the daily bar chart. The near-term upside technical objective is to produce a close above psychological resistance at $1,300. On the downside price, technical support is at $1,237.90. For oil, the Western Texas intermediate (WTI) contango has gone back out to $6.12 from $5.68 the day previous which indicates that crude is once again bidding for storage. This means prices may remain at current levels.
Today our market points to open up 8 points as we have now crossed and closed above resistance at 4652 which is the last peak before the May sell off. Scepticism in the market seems to be subsiding, which may enable us to see the next leg up. We could see the new ASX200 trading range establish between 4600 - 5000. Oil stocks such as WPL and OSH seem to have broken out of resistance levels over the last few trading days which could see the start of a much larger move. A bullish candle has also formed after yesterday’s close on AIO which may be one to keep an eye on for as September expiry approaches. Over the next few weeks, the ASX200 could test support at 4600, possibly 4540 on some short term profit taking before testing the next target resistance at 4720.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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