The XJO is expected to move higher on open this following a small rise in the U.S overnight. U.S futures sit flat.

Yesterday we gave up our morning gains to finish fairly flat after a day of indecisive trading. We are whipping around at the top of the range as we grind along 7,300, using roughly 7,280 support. Typically, we would expect a similar day today as we head into a very important local CPI reading tomorrow and an interest rate decision in the U.S tomorrow night.

Until then, we need to sit tight and see how our market reacts.

US Markets

US shares closed moderately higher overnight as the value-based DOW JONES led the gains, while the more growth-based NASDAQ index was a bit more flat, with the SP500 sitting in between. There was a lack of US company reporting overnight, though it will pick up in earnest tonight with Microsoft, Alphabet (Google), and many others reporting. Overnight economic data from the US was mixed, with US manufacturing contracting by less than expected, while US services grew by less than expected according to S&P global indices. There has been a lack of major US data over the past few days and in the absence, markets have drifted sideways to higher with the current bullish momentum. The major test for US markets is approaching however, with a rate rise expected on Wednesday night. With the rise expected, the market response will likely come down to the accompanying statements and whether they maintain a tightening bias.

Nine of the eleven sector groups of the SP500 closed higher overnight, with Energy the strongest performer, followed by Financials, and Real Estate stocks. Utilities and Healthcare were the only stocks to closed lower on average.

Technically the SP500 is continuing on its uptrend and now the next potential resistance level is some way away at the 4,600 level. This level hasn’t been reached in over a year, so its hard to say whether this will be the resistance level or not. Should the index fall from here, recent resistance at 4,450 may now act as support.

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