ESS Daily Report, page-60

Another Kangaroo style market day?

Yes ESS gained half cent to finish at 48.5c. Our volume was quite good but smaller than yesterday, just over 14m shares traded. So trading now within a very narrow range. Feel it may need some announcement to get out from here. Hopefully the base has been set, so probability is that it should only go higher - but please dyor.

ASX Li stocks had a sedate day with most stocks playing around a small range. Of the 73 stocks that I track, it was flat and average no gain or loss..
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Overnight US Li stocks had a decent day without being spectacular. There was average gain of around 2% with the ETF of LIT gaining 1.35%.
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What next:
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The markets yesterday jumped around in a style sometimes called a Kangaroo Market - jumping and hopping around wildly in different direction - and sometimes coming back to same position without gaining anything. Usually happens over a period but it that in a day as well. SP 500 started strongly and crossed first major resistance at 3930. It was moving towards another critical zone around 3960, when market makers decided its enough, though some say a Fed made some comments around Interest Ratee to be kept longer - looked like it just needed a reason to reverse. Finally after gaining around 1.5%, SP 500 reversed everything and finishing in red, but only slightly. ASX was weak through out the day, finishing around 0.3% down.
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Yesterday's trading of SP 500 slightly weakened the bull theory, but its still intact, as of now. We have only retreated to the gains made on Friday, so those gains have been kept. But a big move up and then losing everything was not very positive. If SP 500 had just played around here and finished where it did, could have been more positive. On the other hand, the bulls did show their hand and overcame important 3930 level - so they can do it again. So overall, mixed at this stage. SP 500 needs to go up again and cross 3960 this time, and finally get over 4000 and stay there - that will be bullish. For downside, even if we finish early 3800, the bounce theory may still be active. Only if it loses 3750, a big doubt will come across many including charts.
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Lead indicators too were mixed - Yields came down, Dollar Index nearly at same level and VIX increased - so no clear direction here, but good to see Yield coming down.
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So what will happen tonight? Powell to speak before market opens. His words have the potential to give a strong market direction. Over time his actions and words have mostly been hawkish and he does not want stock market to go up at this stage - he thinks it will make his task difficult. So probability wise, its best not to expect anything positive from him, so there could be some pressure tonight. Best bet is neutral. A number of economic indicators are now pointing towards taming of inflation. He should be happy and at least be neutral if not positive. That will certainly give a big boost to markets. Will that happen? Lets hope so. All the best