The XJO has been toying with potential resistance at the 6,750 – 6,775 level, after breaking the level on Friday. If the XJO can break this resistance convincingly, we should eventually see the XJO continue higher towards the all-time high level at 6,875, which should be the next resistance. If we fall through 6,750, the next level of support is around the 100 and 50-day moving averages at 6,650-6,630 after that the next target to the downside would be around the longer-term uptrend line at 6,550.
Smartgroup Corp Ltd (SIQ) slumped -13.6%, after the Company announced the retirement of CEO and MD, Mr. Deven Billimoria at end of February 2020. Appen Ltd (APX) was up +13.4%, after the Company raised its FY19 underlying Ebitda forecast to A$96-99m from A$85-90m amid increases in monthly relevance revenues and margins, from existing projects with existing customers. Saracen Mineral Holdings Ltd (SAR) was up +3.0%, following the news that the Company has entered into a binding agreement with Barrick Gold to acquire its 50% stake in Kalgoorlie Consolidated Gold Mines JV for $750m.
US markets were fairly flat overnight. The Dow closed 31.33 points higher (0.11%) and the S&P 500 was up 1.57 points (0.05%). Asian markets were mostly higher, whilst European markets were mostly lower.
US markets spent much of the session in the red overnight, with the S&P500 ticking into the green in the final 10 minutes of trading. Technically, the S&P 500 on Friday broke through the level that it had stalled at for the past week or so, pushing through potential resistance at 3,100. Once again there are no further levels of resistance for the S&P500, so it is hard to say where it might stall. If the S&P 500 falls from here, there are potential levels of support at 3,050, followed by 3,020. If those levels break, 3000 is the next key level, if that goes we could start to see the index downtrend.
XJO Implied Volatility was up 0.77% and closed at 10.879%. The US volatility fell 4.74% and closed at 12.46%.
Crude dropped substantially and continues to move in a volatile fashion.
Gold closed slightly higher.
Iron ore was mixed overnight.
The Aussie dollar pushed slightly lower.
Today’s trading: No major data to be published.
Most of the fluctuations in markets overnight were put down to machinations on the US-China trade front, with talking heads optimistic that a deal would be reached soon. There was also some stimulus measures announced in China yesterday that likely helped investors’ confidence. Our market will likely be fairly flat on open today. Keep an eye on Chinese markets after an escalation of violence in Hong Kong over the past 48 hours.
Sam Green is the Portfolio Manager at Emerald Financial, whilst also being an Equities and Derivatives expert for his clients at TradersCircle.
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