The XJO is expected to rally on open following a strong night of buying in the U.S. Their futures are flat.

We should flirt with 7,800 resistance on open, potentially breaking higher in the morning session. Beyond that we have the top of the range at 7,850 to 7,900, with 7,900 also representing approximately our all-time highs. Obviously, it would require the U.S to continue moving higher for us to go on and test these levels, and further strength from overseas to actually push through and make our own fresh all-time highs.

The week will finish with U.S jobs numbers that could vindicate the current break higher, or lead to sharp profit taking. This ultimately means that we should continue to expect the broad channel to hold for now, but be mindful that next week we could see further gains and fresh highs.

US Markets

US shares jumped strongly overnight, with each of the three major indices closing strongly in the green. The SP500 and NASDAQ closed at fresh all-time highs, while the DOW JONES lagged. The gains were powered by NVIDIA, which continued its crazy run higher, jumping over five percent to become the second largest listed company. It came as US government bond yields fell, with yields falling in the face of weakening US economic data, which is interpreted to mean coming rate cuts. Indeed, overnight there were fewer jobs created than expected, and manufacturing and service PMIs were mostly lower than expected as well. Overall US shares seem happy to continue higher in the belief that interest rates will be cut, earnings will continue to grow, and the economy will not see a downturn – however, it is worth noting that some of these outcomes are mutually exclusive.

Seven of the eleven sector groups of the SP500 closed higher overnight, with Technology, Communications, and Industrials the strongest performers. Utilities stocks saw the most selling.

Technically, the SP500 broke above the previous all-time high and looks set to continue higher. Its hard to say where this movement may stall as these are level that have never been seen before. However, previous stalling points have been about one percent higher than the previous tops, which would point to roughly 5,400 index points.

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