Will tonight be decisive - make or break?
Yes AZL gained 1 pip to finish at 6.3c. Our volume was again very low, close to yearly bottom, just over 4.3m shares traded. Another very low trading day indicative of sellers drying up. If markets behave, there is a good possibility we may have done the bottom fishing around these levels.
ASX Li stocks liked the big green ASX. Of the 54 stocks that I track, there was average gain of around 2%.
Overnight US Li stocks were panicking - both with indices playing up, but more importantly Tesla dropping another 10%. Though the ETF of LIT was down only around 1%, but other Li stocks lost over 4% on average.
What next:
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Yesterday SP 500 lost another 0.4% to finish on 3824. It was a fairly mild but volatile day with opening in green, rising nearly 1%, then dropping below 3800 and going down 1%, finally settling in the range it is now in for nearly 3 weeks (3850 +/1). The ASX shrugged off the US indices - yesterday we had a big unusual drop, not sure if it was making it up for that or is feeling good about tonight. It finished around 1.6% in gain - quite significant. Most resource stocks, risk-on assets were in green, unlike previous night in US markets.
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SP 500 is now trading in the same range for just over 3 weeks (mid 3800 +/-). It has not been able to make a breakthrough. Anything bullish that could have brought in a surge has been undermined by big technical stocks not doing well. Yesterday again Tesla and Apple were looking for cover, doing their yearly lows. These 2 stocks are heavyweight of the indices, and if they are doing yearly lows and falling big, like 10% in a day, indices will and did struggle. Key numbers - down to hold 3750, up to cross 3900 and cross 4030.
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Lead indicators seem to be slightly decoupling for indices etc. For last few months there was strong correlation between then and SP 500. But now Dollar Index, Yield and VIX are in their own territory and not singing together to give any firm direction.
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Tonight very crucial data on Jobs, PMI and all important FOMC minutes of December. There is a feeling that markets are not getting any clear direction for last 3 weeks or so just on technicals. It needs some important economic data to break the deadlock. Tonight is the most important data we are getting in few weeks. There is a general feeling that this could be decisive - leading to either a big fall or a big rise.
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From chart perspective, indicators are mixed, but still open for a good bounce on the up. But economic data may overpower technicals. Many are expecting a big change. Lets see if that happens.
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So what will happen tonight? Its nearly a binary event and the economic numbers could drive the market - its like a toss so difficult to predict. These numbers will come after market opens, so we could have some drama before that. Asian markets were mixed but largely green. We need at least 2 of the 3 to come out positive (Jobs/PMI/FOMC Minutes). If that happens, we could see the bounce many including me are expecting to go to next level. Will that happen? Lets hope so. All the best.
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