Dow up 5 points as market takes a breather
June 17th, 2010 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 10,409.46 | 4.69 | 0.0% |
| NASDAQ | 2,305.93 | 0.05 | 0.0% |
| S P 500 | 1,114.61 | -0.62 | -0.1% |
| FTSE 100 | 5,237.92 | 20.1 | 0.4% |
| Nikkei 225 | 10,067.15 | 179.26 | 1.8% |
| ASX 200 | 4,559.00 | 54 | 1.2% |
| COMEX Gold - Dec 09 | 1,230.50 | -3.9 | -0.3% |
| COMEX Silver - Sep 09 | 18.441 | -0.137 | -0.7% |
| COMEX Copper - Sep 09 | 301.35 | -1.05 | -0.3% |
| WTI Spot | 77.7 | 0.76 | 1.0% |
| AUD-USD | 0.8637 | -0.0018 | -0.2% |
| Aluminium | 1,965.00 | 19.5 | 1.0% |
| Copper | 6,625.00 | 15 | 0.2% |
| Lead | 1,685.00 | 11 | 0.7% |
| Nickel | 20,105.00 | 375 | 1.9% |
| Tin | 17,080.00 | 155 | 0.9% |
| Zinc | 1,772.50 | 30 | 1.7% |
The Dow closed up 5 points after bouncing from support at 10330 midsession as reports revealing American housing starts fell the most in 14 months. Crude oil futures rose 0.9 percent to $77.67 a barrel and touched a 6 week high. BP Plc canceled three quarterly payments of its $10 billion-a-year dividend after President Barack Obama demanded it put up cash for victims of the Gulf of Mexico spill. BP said it will reduce expenditures and sell more assets than planned to free up cash. Gold futures closed slightly lower in quieter trading. Mild profit-taking pressure was featured on the corrective pullback in prices. The Euro currency was weaker and the U.S. dollar index was firmer Wednesday.
Price action Wednesday and this week suggests investors are gaining some more risk appetite. However, there are still underlying concerns about the European Union's ongoing and severe debt problems. This is limiting selling interest in gold. Moody's decision this week to downgrade Greece's sovereign debt to junk status is a reminder to investors that problems in the EU are still present, even if they appear to be on the back burner this week. Reports have revealed that physical buying of gold has decreased in recent weeks as prices hit a record high last week. However, the report said this time of year is a period of seasonal weakness in physical demand for gold. The report quoted analysts as saying they expect physical demand for gold to pick up again and remain robust.
Our market is set for a flat open this morning with SPI futures down 3 points. Our index is holding onto a solid uptrend on a daily chart from May 8 low and also above the 100 day moving average at 4536. Long run moving averages suggest the market should gravitate to 4700 over the next few weeks, so another 150 points on the upside. A positive sign is that the market has pushed through resistance at 4490 and we are back into the trading range from October 2009. The last five trading sessions have shown a relatively tight trading range suggesting some consolidation after breaking 4500. Support levels may be found at 4430 at the 20 day moving average. The next level of resistance is 4640; a Fibonacci retracement level from the low on the 21st of May.
We could see this level over the next week into options expiry and potentially 4720 in the medium term. We have only a week till expiry for June options. New positions in the market with July options, particularly in our resource stocks, are showing above average premium, so building equity positions whilst the market is consolidating may be an idea to lock in income for next month.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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