Technicals | Apr 16 2018
By Craig Parker, asset manager, Moat Capital
Confusion reigns again and you can pretty much ignore technical analysis or any form of analysis at this stage as all roads lead to Trump, Syria, Putin, Iran and Israel. When it comes to markets we can do some educated guesswork but in times like these when a twitter tweet can determine market direction you will need to take care. Trump’s tactic seems to be talking tough early to firm up a position only to then moderate to secure a position. It has worked thus far but Putin is a stark contrast to the likes of Kim Jong Un.
Back to the technical analysis and if you look at our market it is looking sick from a technical point of view. Not a lot has changed since last week as we are still in a downtrend however it looks like we are rolling over to form a new peak lower and the 200-day moving average is a new resistance level. For me to develop some optimism our market would need to break through the 200-day moving average to the upside and up through the medium-term downtrend line drawn in (see the daily chart). Also, on the negative side there is a recent breakout up through the short-term downtrend line on the US 10 Year Treasury Note which will put the brakes on any upside surprise in the medium term.
Gold is also threatening to break through the strong resistance level of 1360 with a break through this level being a serious concern for equity markets. On the bright side one sector doing very well from all the geo-political turmoil is Oil. In times like these you will need to be very sector specific to do well or at least help buffer the downside to the overall market. Enjoy your week!
ASX200 daily
USD gold daily
WTI crude weekly
US ten-year yield daily
By Craig Parker Private Client Adviser and Senior Technical Analyst
Authorised Representative Life Plan FP AFSL 449658
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