ASX200 Remains a Puzzle – Market Update

ASX200

This is bordering on farcical now … the ASX200 index continues to do very little as it moves up to the key 5800 level only to be sold off again.  What I find fascinating is that the US’ S&P500 index has not only recovered from the GFC 2008 losses, it has moved another 50% higher than the 2007 highs.

Incredible.

What has the S&P/ASX200 done since 2007?    It remains around 1000 points lower than the 2007 highs, or roughly a little under 20% below.

Even this year the US markets have soared higher whilst the ASX200 is right around where it started on 3rd January.

I am not sure there is much more I can say about the ASX200 Index, as it continues to do little.  It needs some sort of spark, doesn’t it?  As you can see on the chart below, the selling pressure / resistance continues at 5800.

The all time highs / lows reading this week is 6 / 1.   Some of the all time highs include the A2 Milk Company, South32, and Phileo.  The low is Ding Sheng.

Daily chart of S&P/ASX200 Index | Image from MetaStock

AUD/USD

In the last week the Australian dollar has continued to decline from the current key level of 0.80.  A few weeks ago it made repeated attempts to move through this level however it was rejected every time.  The price action over the last few weeks indicates how significant the 0.80 level now is.
If it was to continue to ease lower, you could reasonably expect the 0.7750 level to kick in and provide some measure of support, as this level has provided resistance several times over the last 12 months.

Interestingly, the 0.80 level doesn’t have too much history of being a key level.  If you scroll back through a chart of the AUDUSD,  you have to go back to around mid 2010 to see the 0.80 level having a significant impact on price.

As I type this, it is currently trading around 0.7860.

Daily chart of AUDUSD | Image from MetaStock

Important Information

This material is made available by Trading Excellence Pty Ltd (ABN 11 096 024 958) (“Trading Excellence”) and Stuart McPhee who is an Authorised Representative (No 276438) of Australian Stock Report Pty Limited (AFSL 301682 – ABN 94 106 863 978)(“ASR”) and Amalgamated Australian Investment Solutions Pty Limited (AFSL 314614 – ABN 61 123 680 106)(“AAIS”).

This blog is prepared and disseminated for information and discussion purposes only. It is neither an offer to buy or sell securities, or any other financial products nor a solicitation of an offer to buy securities or other financial products. To the extent that any of the content of this website constitutes advice, it is general advice as opposed to personal advice.

Opinions, estimates and projections constitute the current judgement of the author as at the date of publication. They do not necessarily reflect the opinions of ASR, AAIS or any of the related entities, and are subject to change without notice. Whilst the information presented herein is believed to be reliable and sourced from public sources believed to be reliable, ASR and AAIS do not make any representation as to its accuracy or completeness. Past performance is not necessarily indicative of future results.

ASR and AAIS have no obligation to update, modify or amend this publication or otherwise notify a recipient if any opinion, forecast or estimate contained herein changes or subsequently becomes inaccurate.

Employees and/or associates of ASR, AAIS and its related entities may hold one or more of the stocks, securities or investments reviewed in the newsletter or on the website. Any personal holdings by employees and/or associates of ASR and AAIS and their related entities should not be seen as an endorsement or recommendation in anyway.

ASR and AAIS’ Privacy Statement and Financial Services Guide can be obtained upon request.

No part of this document may be reproduced in any form without the prior written consent of Trading Excellence Pty Ltd.

© Trading Excellence Pty Ltd 2017. All Rights Reserved.

 

Stuart McPhee
Stuart McPhee
Australian private trader for nearly 20 years, author, trading coach, licensed adviser and regular speaker at major trading events all around the world. Graduate of RMC Duntroon and former Australian Army Officer.