US markets fail at resistance, XJO to open lower

The XJO is expected to open lower this morning after a tumultuous night of trading in the U.S overnight. Their futures have edged into the green.

Our market isn’t likely to be inspired today as the U.S quite clearly rebounded intraday from both their key resistance and yearly highs overnight to finish marginally in the red. They continue to hold their consolidation range, and our market will translate this to a small pullback today. Despite the continued consolidation in the U.S we are trying out best to move. Yesterday we had a surprising rally, bolstered by positive U.S futures during our session. As mentioned recently in this morning view, our market is now in an environment where we could easily see a continued uptrend. It seems likely now that we are at peak interest rates, and we have plenty of catching up to the U.S to do. However, we are also reluctant to rally into a potential U.S pullback, which we are reminded could be around the corner each time they fail at their yearly highs.

We continue to make higher peaks and troughs, continue the break of the flag pattern from last week. We are tracking near the 200 day MA, which our market will find comfort in as we wait for the U.S to move.

US Markets

US shares closed lower overnight, with minor selling across each of the three major indices. US economic data was mostly somewhat negative overnight, with fewer jobs created than expected, and with wages falling by more than expected. Though this data would usually be seen as a negative, it could also be seen as deflationary, which is what the market wants at the moment. US markets will see the release of the full unemployment report on Friday night, which could be influential in the next directional move for US shares. Otherwise, shares are continuing to track sideways up the top of their recent ranges.

Only three of the eleven sector groups of the SP500 closed higher overnight, with Utilities the strongest performers. Technology, and Energy stocks saw the most selling. Most other sectors were flat.

Technically, the SP500 opened around the 4,600 resistance level overnight, but pulled back from this level to close back at 4,550. The index has been magnetised to the 4,550 level, and hasn’t been able to break away from it for the past fortnight. Should we see a break above 4,600, that would indicate further gains, while with a break lower we would be looking for a higher trough on the current uptrend.

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