The XJO is expected to open lower this morning, following a pull back in the U.S last night. U.S futures sit in the green, giving hope that the move last night was a simple and healthy retracement, rather than something to be truly worried about.

In the short term, if the U.S does continue to retrace, our market may find itself resilient against the falls. In the past when our market has failed to share in all their gains, we can often be resilient against sharing in all their falls – and instead drift mainly sideward.

This morning’s open should have us test 7,400, a major level our market has favoured both recently and historically. The 50 and 100 day MAs also come in around here, and coupled with the uptrend line, should reinforce 7,400 as buying support. Otherwise, 7,300 to 7,350 is the next key level.

With commodities slumping overnight, we may see our miners lead the pull back. The banks could join the falls, or help keep us elevated depending on the market’s initial thoughts on ANZ’s report this morning.

Australian Outlook

The XJO is expected to open lower this morning, following a pull back in the U.S last night. U.S futures sit in the green, giving hope that the move last night was a simple and healthy retracement, rather than something to be truly worried about.

In the short term, if the U.S does continue to retrace, our market may find itself resilient against the falls. In the past when our market has failed to share in all their gains, we can often be resilient against sharing in all their falls – and instead drift mainly sideward.

This morning’s open should have us test 7,400, a major level our market has favoured both recently and historically. The 50 and 100 day MAs also come in around here, and coupled with the uptrend line, should reinforce 7,400 as buying support. Otherwise, 7,300 to 7,350 is the next key level.

With commodities slumping overnight, we may see our miners lead the pull back. The banks could join the falls, or help keep us elevated depending on the market’s initial thoughts on ANZ’s report this morning.

US Markets

US shares closed lower overnight, ending their recent run of gains. The selling came despite continued strength in US company earnings reporting, with Microsoft and Google rising following their after-market reports yesterday, and McDonalds and Coca-Cola rising after their pre-market reports. It is likely that US shares just needed a breather after a prolonged period of strong gains.

US economic data was mixed, with better than expected durable goods orders, while there was a bigger than expected build-up in US oil inventories. Nine of the eleven sector groups of the SP500 closed lower overnight, with energy faring the worst, followed by Financials, and Materials. Communications and Discretionary were the only sectors to close higher.