Yes AGE gained 4 pips to finish on 5.4c. Our volume was less than last few days, just over 22m shares traded.
ASX U stocks had a much better day after some time. Of the 25 stocks that I track, average gain was 5%.
Overnight US U stocks also had a good day. The ETF of URA/URNM gained just under 4%, but some stocks gained over 8%. The U Futures was steady at $49.20.
What next - Yesterday after 6 red days, US indices were in green. Decent rise of average 2% across the indices. The ASX was nearly in tow and again syncing with US, a gain of around 1.5%.
Yesterday in my writings I had mentioned about two scenario playing out. Just to recap, these were:
Scenario 1 - Stage 1 - short rally around early 3600 where we are flirting for last 3 days. Stage 2 - rally towards 3800 Stage 3 - bottom around 3500 Stage 4 - rally towards 4000s
Scenario 2 - Stage 1 - Short term bottom around 3500/3520, now some are even calling high 3570/3580 (So roughly 2 to 4% down from here) Stage 2 - rally towards 3800 Stage 3 - bottom around 3100 to 3400 (average somewhere in 3200 something. This is the low which has been called by most bears since March) Stage 4 - rally towards 4000s
At this stage it looks like Scenario 1 is in play. It has rebounded of low 3600, similar to June bottom. A few days ago I had mentioned of this possibility, in charts this appearing as W pattern (double bottom).
Another thing to note is the a number I have been mentioning in last few days - for SP 500, number 3740. I had mentioned this would be first good hurdle to cross though 3710/3720 also had minor resistance. Yesterday SP 500 reached 3737, so still under that figure of 3740 - coincidence or it was too far to reach in one day?
So is this another bear market rally or a nice rebound that many were expecting?
Those calling Bear Market Rally - Yesterday's rise many are attributing to Bank of England reaction and say it is not sustainable. They also point out that yesterday's big rise including finishing on nearly day's high is a typical bear market rally that we have seen in recent times. There were 7 such instances in very recent times. Nearly all of them had a typical characteristic. Next day, there was a decent fall of US indices. So tonight is the test whether it is one such bear market rally/dead cat bounce.
Those expecting rebounce for at least next couple of weeks - They claim that this rebounce was very much on the cards and has actually played out to text book. They insist we will see this go higher towards 3800 to 3900 mark in the next couple of weeks.
We saw some bearish indicators cool down yesterday - 2 and 10 year yield, Dollar, Volatility index VIX - so all these moving in the right direction.
One important data that is coming out on Friday before market opens is PCE data for US - that can provide direction to markets. In the short-term, there is a high chance that PCE data may determine if its another bear market rally or a decent rebounce.
Personally, I did a lot of reading to understand where the markets are heading. At this stage it looks like 50/50. But I had decided and mentioned in my notes, that if 3500 looks like holding, I will be adding some. Cautiously, I bought another 20% today, so have now used 60% of my available funds. Markets had not gained that much, so could buy in similar range to first lot. We are still not out of the woods - so lets see. Please DYOR as always as I could be wrong.
So what will happen tonight? US Futures in moderate to decent red at this stage - so not a good look at this stage but that could change. Asian markets largely green but some in red as well. Cryptos cautious and steady - Bitcoin at 19.3k. Volatility Index VIX after nearly reaching 35 yesterday had a decent drop and just over 30 now. Those calling it bear market rally are quite certain that we will fall tonight. But others feel we may cautiously play around this level till tomorrow, and then get a good PCE data on Friday, and get into 3800 to 3900 mark in near future. Will that happen? Lets hope so. All the best.
AGE Price at posting:
5.4¢ Sentiment: Buy Disclosure: Held
(20min delay)