Technicals | Feb 06 2017
By Craig Parker, asset manager, Moat Capital
Perhaps instead of looking at charts we should be watching the Trump twitter feed to get an idea of the direction of markets. This week was a slightly downward move with not a lot of action. With payroll reports coming out in the US overnight we will get a better idea of the direction. Perhaps the counter trend I mentioned a couple of weeks ago, is going to head down between the 5500 and 5600 level before resuming the overall uptrend. Our market is now getting closer to the 60-day moving average (blue line) and if it happens to break through this level I would be looking for support around the 200-day moving average (red line).
When viewing our market through the weekly chart we are still in counter trend mode and will likely be this way for the next week or so until an up range is confirmed. On the other hand, if investors take the payroll reports as good news [it was – Ed] then we will most likely head back up towards the 6000 level, lest further Trump geo political tensions. Definitely keep an eye on our 60-day moving average for a break. A lot will depend on the news out of the US tonight. Taking a quick look at the S&P 500 weekly chart you will notice some bearish divergence on the RSI indicator and the MACD indicator seems to be peaking. If the US market does happen to continue its advance it will be very overbought from a technical perspective and caution will be required in the coming months.
ASX200 daily
ASX200 weekly
S&P500 weekly
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