Technicals | Aug 21 2017
By Craig Parker, asset manager, Moat Capital
It seems markets and in particular our market is being driven more by the ups and downs in the White House than any other market. The geo-political theme is dominating at the moment and who knows what it will be next week. Rupert Murdoch's and other media organisations must be loving Trump being in the big building. Never has there been this much entertainment. There seems to be a revolving door for his staff and surely people will now be questioning Trump's ability to hire staff that can do the job.
Back to the technical signs for the week gone and the S&P500 has finally moved below the medium-term uptrend line and broken down through the 60-day moving average with a possibility of taking a further breather down towards the 200-day moving average. This doesn’t necessarily bode well for our market although we have had a sideways movement now for over 3 months and are still range bound. 5800 is the new resistance level for us and since the end of June we have tried to break through to no avail. Technically from a weekly and monthly perspective we are still in an overall uptrend and nearing a possible buying opportunity with a long-term uptrend line on the weekly chart approaching. A break below this trend line would be very negative whilst a break up could be encouraging.
I’ll be watching this area closely along with the 5800-resistance level. Unfortunately, our Financials sector didn’t recover as well as the overall market on Friday which could prove to hold us back in the coming days/weeks. Another matter is our stubbornly high dollar which returned to its uptrend the past couple of days. I’ll be watching this along the uptrend line for a possible break down which could be good for our market. Further upward movement not so good. The US 10-year Bond rate continues to weaken and has moved back into a short to medium term downtrend which has been good for our listed property trust sector of late. Maybe Donald is creating mayhem to help keep downward pressure on the US dollar. Looking forward to another interesting week ahead.
ASX200 daily
ASX200 weekly
ASX200 financials ex-REITs daily
S&P500 daily
US ten-year yield weekly
AUD/USD daily
Authorised Representative Sentinel Private Wealth AFSL 344762
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