Has Powell pulled the markets down?
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Yes AGE lost 2 pips to finish at 5.2c. Our volume was very high - just over 63m shares traded. So we played along the CR price, now finding it difficult to get out from here. The general markets not helping as well. So curtsey our CR, instead of playing in 6.8 to 7.8 zone, we have even lost 5.9 to 6.8 and now playing in 4.6 to 5.9 zone. The CR shares still to come next week, so a task cut out for now. Added a few more at 5.1 today.
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ASX U had a mixed day without any strong direction. Of the 28 stocks that I track, average loss was around 0.5%.
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Overnight US U stocks were also mixed and on average finished flat - no gain or loss. U Future finally updated on trading view, big gain of 3.50 - so now at $65.50. This is the highest read in over a decade, so very bullish from that point of view.
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Yesterday I had mentioned that general markets are in Powell hands. And he brought us down. U stocks decoupling meant that we have not lost much, though any gains have now stopped. Next few days will be a real test - how U stocks handle the situation if Spot price increases but general markets are going down. Its an uncertain territory, better to follow price action than do predictions. Today it was heartening to see that many of the bigger stocks were able to withstand the general market downturn, many finishing in green, although not much. But still bodes well for the sector, lets see if we can hold.
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What next:
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SP 500 had a big drop yesterday after Powell speech, finishing nearly 1% down on the day's low at 4402. ASX though had a bigger drop of around 1.4%, maybe expecting more drops tonight.
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So markets are now going down. Everyone was waiting for Powell to give direction, and at this stage many believe he wants it down. SP 500 had been coiling around this level for last few weeks, in a pullback from 4600 level. I have been saying for last few week that a test of 4330/4300 is on cards, and even lower at 4200. Upside now have to gain 4500. As I mentioned yesterday, from seasonality perspective, last 10 days of September is the worst period statistically for SP 500 in the whole year. It does not mean it has to go down, but odds of going down are higher based on previous trends.
So finally I am seeing some accordance among all the analysts. Mostly they have divergent views. But this time, nearly every one is saying we are going down. If we go down, best case scenario is to reverse from 4330/4300, or 4200 is on cards. But markets makers always like to play. Now that everyone is expecting markets to go down, they could just push it up and catch everyone unawares and create a panic. Probability is not very high, but its possible.
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So what will happen tonight? Some jobs data tonight which could provide direction. But mostly technicals may drive the markets. Its not looking good, but anything can happen, so best to keep an open mind and follow the price action. An intra-day dip and return would be best scenario. Will that happen? . Lets hope so. All the best..
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