Australia: S&P/ASX 200 (.AXJO) futures pointing higher

Australia: S&P/ASX 200 (.AXJO) futures pointing higher

Australia: S&P/ASX 200 (.AXJO) futures pointing higher

According to the latest SPI futures, the ASX 200 is expected to open 0.6% or 35 points higher on Thursday after U.S. markets rebounded from their Christmas Eve selloff. Late in the U.S. session the Dow Jones is 2.7% higher, the S&P 500 is 2.9% higher, and the Nasdaq has surged 3.7% higher.

Tech shares on watch.

Australian tech shares including Altium Limited (ASX: ALU) and Afterpay Touch Group Ltd (ASX: APT) will be on watch today after their U.S. counterparts suffered heavy declines on Christmas Eve. Although it has rebounded strongly today, on Christmas Eve the Nasdaq tech index fell a sizeable 5%.

Oil prices rocket.

Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) shareholders will be breathing a sigh of relief today after oil prices rebounded from a Christmas Eve sell off in style. According to Bloomberg, the WTI crude oil price is up 7.7% to US$45.79 a barrel and the Brent crude oil price has pushed 7.3% higher to US$54.15 a barrel. Prices rebounded after Russia signalled that OPEC and its partners would be willing to meet when needed to help manage the oil market.

Gold price declines.

The rise in equities has been a blow to gold miners such as Northern Star Resources Ltd (ASX: NST) and Resolute Mining Limited (ASX: RSG). Over the Christmas break the gold price surged higher, but the rebound on Wall Street means the precious metal has now given back its gains. Since peaking at approximately US$1,280 an ounce yesterday, the gold price has fallen 1.1% to US$1,266 an ounce.

Rio Tinto to spin off its Canadian iron ore business.

The Rio Tinto Limited (ASX: RIO) share price will be on watch on Thursday after Reuters reported that the mining giant is planning to take its Iron Ore Company of Canada business public in 2019 through a dual listing in Canada and Wall Street. Rio Tinto is believed to be targeting a valuation of US$4 billion.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 5,833.25.

The projected upper bound is: 5,653.56.

The projected lower bound is: 5,320.31.

The projected closing price is: 5,486.93.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 19.2610. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 8 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 36.84. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 39 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -167.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 8 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 26.200 at 5,493.800. Volume was 61% below average (consolidating) and Bollinger Bands were 13% wider than normal.

Open High Low Close Volume___
5,467.6005,496.7005,410.2005,493.800 251,499,968

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 5,578.86 5,737.31 6,014.03
Volatility: 17 19 13
Volume: 751,507,648 657,842,368 594,745,984

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

S&P/ASX 200 is currently 8.7% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .AXJO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .AXJO and have had this outlook for the last 12 periods.

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