Technicals | Jun 04 2018
By Craig Parker, asset manager, Moat Capital
Italy aside, all technical eyes are back on the US 10 Year Treasury Note which is currently rebounded off it’s recent counter trend and looks like the 60-day moving average is providing some support. Oddly enough the S&P 500 seems to be mirroring the 10 Year Treasury Note with its recent move up whilst confirming support on the 60-day moving average. It seems the equities markets are back to good news being good news with a rise in inflation indicating the economy is robust. I doubt this sentiment will last long as people rarely react in rational ways for too long. Especially when it comes to equities markets which is a good thing for those of us who can remain calm and take advantage of the irrationality.
What this all means for our local market (S&P/ASX 200) is that the support I was mentioning once we get around the 60 and 200 day moving averages is getting more likely. Our dollar has found support around the 75 mark and our Materials sector has moved up from it’s recent counter trend which is technically positive for our market in the short term. However, I wouldn’t be getting our hopes up to soon especially when you look at the weekly chart of the Financial sector which has fallen into free fall territory and I think I mentioned if it fell through this level that there was up to a 5% fall. I assume there will be some small recovery in the short term and everyone in the financial services industry is just willing this royal commission to an end with the horror stories that continue to come out. Enjoy your week!
ASX200 daily
ASX200 financials ex-REITs weekly
ASX200 materials daily
S&P500 daily
US ten-year yield daily
AUDUSD weekly
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