Unbelievable gains continue

The XJO is expected to open higher once again with a continued move from the U.S overnight. Their futures have edged into the red.

We should flirt with key resistance near 8,000 on open this morning. The strength from the U.S is quite shocking considering they have not really paused since their recent lows. Our market may not feel comfortable continuing the move with the belief that a pullback is imminent from overseas – especially if their futures move further into the red today.

If 8,000 breaks convincingly, then 8,100 is the next key level and roughly represents the top of our market.

US Markets

US shares closed higher again overnight, with shares rising for the eighth straight session, the strongest 8-day performance from US shares for over 20 years. An unbelievable push higher considering the volatility at the start of the month. Shares are rising ahead of some key speeches from Fed members this week, including from Fed Chair Jerome Powell, who is expected to signal rate cuts next month and that rate cuts will continue steadily after. There was a lack of major US economic data overnight and indeed this will be a fairly quiet week for data other than the Fed speeches and the Fed meeting minutes on Wednesday night.

Every sector of the SP500 closed higher overnight, with Technology and Communications the best performers. Most sectors saw mild buying.

Technically, the SP500 broke above the previous peak at 5,550 overnight and continued higher. This move now suggests a rise towards the all-time high peak at 5,670, which is now only one percent away. Should the index break through that level, it would indicate further upside. Should the index fall from here, we would have to look for a double top pattern forming.

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