The XJO is expected to edge lower on open this morning following another lackluster night of sidewards movement from the U.S. Their futures have also edged into the red.

Yesterday we kept in step with the past few sessions. Our market once again tried to move away from the middle of the range, but retraced most of the session’s movement to finish relatively flat. In essence, our market is whipsawing higher and lower, but not committing either way. We continue to trade along both the 50 and 100 day MA which come in just below 7,750. By this metric, our market is neither overbought nor oversold in the short or medium term. We simply can’t commit until we get a direction from the U.S which continues to track sideward in a tight range.

7,700 remains key support, and 7,800 to 7,850 remains key resistance.

This morning we have both local retail sales numbers and the minutes from the last RBA meeting at 11:30 AEST. We want to see retail sales numbers remain low, and hopefully a bit more insight to the RBA’s recent hawkishness on monetary policy.

US Markets

US shares closed higher overnight, with strength in technology stocks helping to drag the three major indices into the green. There was a lack of major news for the US overnight, and this week will be a pretty light one with regards to data. Overnight we did see some lower than expected manufacturing and service PMIs, though the data didn’t seem too far from expectations and markets didn’t react. The major event for US markets this week will be the unemployment report on Friday night, until then don’t be surprised to see sideways movement for US shares.

Five of the eleven sector groups of the SP500 closed higher overnight, with Technology the strongest performer, followed by Discretionary stocks. Materials were the weakest stocks on average, followed by Industrials and Real Estate stocks.

Technically, the SP500 is on an overall longer-term uptrend it has found some resistance at 5,500, it tried to break this level on Friday, but quickly fell back off below it. Should the market close above 5,500, the buying should continue and its hard to say where it will stall. Should we see selling, the previous resistance at 5,375 is now likely to act as support; should it break, we are likely to see further selling.

Want to learn how to trade?

The team at TradersCircle/Emerald Financial have released a free online stock market education course, click here to enrol and get started.