Daily Market Reports | Sep 07 2010
By Greg Peel
In theory, it's back to work for the bulk of Wall Street tomorrow after not just the Labor Day long weekend but the summer holidays per se. There is hope that recently anaemic volumes will improve now, although one might debate as to which way the sun-tanned traders and investors will move.
Over the past month, the S&P 500 has fallen from around the 1125 mark down to 1050 to match the June low, but not as low as July's bottom of 1020, and then rebounded to 1100 once more. For many vacationers, the market would be little changed. If you want to get technical, the S&P has broken back up through the neckline of head-and-shoulders pattern which has been forming since that June bottom, thus negating the bearish signal. But let's face it, we've seen more head-and-shoulders formations these past few months than Henry VIII's executioner and all have been equally as meaningless as each other.
I'm not shocked.
The hope on Wall Street is that the vacationers will take heart from recent positive data in US manufacturing, housing and jobs and return as buyers. If August's top at 1125 can be breached then it could be plain sailing up to 1200. Alternatively, this recent sharp rebound could again be seen as a good opportunity to sell, thus maintaining the trading range which has been in place since May.
Hang on, I'll just consult my powerful technical model. Hmmm – heads.
Whatever Wall Street does tonight, it won't be influenced by what happened last night elsewhere in the world. Stocks markets in Europe and the UK were up around 0.2-0.3% and the US dollar index was steady at 82.08.
The Aussie was steady at US$0.9175, gold added US$3.10 to US$1249.70/oz, and base metals in London were mostly stronger on little volume.
The SPI Overnight lost a point.
The RBA will meet today and decide to leave its cash rate unchanged at 4.5%. I'm a bit worried, however, that all economists surveyed by Bloomberg agree with this prediction. It usually means the opposite.
At some time today it is anticipated an Australian government will be announced.
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