First rejection at resistance, will that be overcome next...

First rejection at resistance, will that be overcome next time?

Yes AGE gained 1 pip to finish on 5.3c. Our volume was decent without being too high, just over 15m shares traded. It was good to see some volume coming back, lets see if it continues.

ASX U stocks had one of the better days without being spectacular. Of the 25 stocks that I track, average gain was 1.5%. Today's trading across the sector was good. although no big rise, stocks have risen from their sleep and want to be active again - may be preparing for a run?

Overnight US U stocks also moved in the right direction, with average gains around 2.5%. ASX U stocks still trailed but better than other days. U Futures still at $53.35 - so no changes for 2 days - lets see if the rise continues.

What next -

Yesterday was a topsy turvy day with indices flirting with both red and green. At one stage indices were well up, but the lag of some bad earnings from tech giants meant some indices were in red - Nasdaq 2% down, SP 500 down 0.75% with Dow no change. ASX today was in good mood, making a gain of 0.5% - may be anticipating something good tonight.

Yesterday I had mentioned that even though we may start red, there is a good chance an attempt at SP 500 level of 3900 will be made. Somehow it turned out that day. SP 500 made some decent gains and retreated back from a key moving average around 3890, reaching 3886. But then there was a big fall and finished at day's low of 3830. So now we are challenging that 3900 line, we have met some resistance - question is, will it be overcome next time?

From chart perspective, for a bull case we need to cross 3900 and march towards 4100/4150 mark. At this stage, SP 500 level of 3780 should hold, that is first gate and we should stay above. We can fall back towards 3720 and retreat, but anything beyond that, bears will take control and there is a good chance this rally may lose its legs.

Although tech giant earning reports are not coming out good, but many technical indicators have kept improving and keeping the hopes of this rally towards 4100/4150 mark very much alive. 10 year yield dropped by another 2% and is just above 4 now (it was playing in 4.3s just few days back). Dollar index further weakend, which is good for stocks. Also Volatility index VIX had another big fall, over 4%, and now sits at 27.28. After a while it has fallen below 28, which is a good sign, although this is also a range from where it reverses - so something to keep an eye on.

From a negative side, these tech giants make up significant component of indices - so they have to play the game, else indices will struggle to make a decent gain. Till now the scorecard is poor.

Personally, as I have mentioned last few days, I am playing for this rally at least up to 4100/4150 level, unless there is a strong signal that rally may not continue.

So what will happen tonight? US Futures slightly in green. Asian markets largely green though some in red. Cryptos are on fire, gaining around 10% in just few days, Bitcoin inching towards 21k. A rise in Cryptos is a positive signal for stocks as Cryptos are risk on assets similar to stocks - it shows punters are no longer fearful and ready to take risk. The sentiment indicator is sitting on neutral, but edging towards greed, with a reading around 55. Meta reported bad data after market yesterday. These tech companies are dragging down indices and if the rally does not continue in immediate short-term, very highly it would be because of them. Tonight Apple and Amazon report after market, so could affect our trading tomorrow. Also GDP numbers and job data before market opens - they could provide some direction tonight. So after 3 green day we have given back a red - it looks good on score card - so that another green does not feel out of way. Yesterday the rally took a breather, it tried but was not successful. I still believe that another attempt towards crossing 3900 will be made in this rally, possibly tonight. Will that happen? Lets hope so. All the best.