Looks like the market doesn't really see us going above 6000 much any time soon.
In some ways I think this makes me more attentive to your suggestion haha.
We're well in the sub 5950 area now. Maybe picking a run to pre GFC levels of 6800 is a big goal I do think some sort of recovery from low 5900s towards 6000 may be something.
Some of the challenges will be the tax reform plan coming out of the states. The uncertainty is causing us issues here rather than the US.
I've got a little bit of time atm and have been watching the opens each day our time. The sudden drop happened a couple of days ago based on the SPI futures bouncing off a flat US session based on some rumours that a substantial tax reform plan may not be as easy as some first thought - well I don't think it was ever obvious it would be easy, but that's how the media was reporting it.
In some ways I think it shows the differential between the US markets optimism and our markets somewhat more reasoned response to macro conditions (US tax reform, US / EU quantitative easying etc).
So, is a run back up to 6000 possible. If the US market and news cycle (US Congress etc) stops fretting over tax reform then yes I do think it'll happen especially if the US indices don't sneeze or commodity prices don't dip.
I do think there will be ongoing concern over the tax reform package (which analyst say has been priced into the US market, so any deviation is a risk). Basically Trump hasn't been able to pass anything meaningful even though the Republicans have control of both houses. There are lots of individual lobby groups domestically in the US that have their shopping list from tax reform. Soooo.... I think consensus will take time even if everyone can agree, lets bring taxes down.
I'm not on top of commodity prices though I think there may be minor issues over individual commodities I think oil and others are pretty stable, but I do caution I'm not on top of this as much as much as macro economics. Does seem any topic about commodities not going higher seems to send a scare through our market.
Essentially I think Australia is a little sensitive to news atm. I think domestically people feel the US is overvalued, is due for a correction and doubt the ability of Trump to navigate tax reform. I think we keep expecting rationality to happen and a little sneeze from the markets have sent us into a proactive minor correction in antipation that the US may wake up but at least atm it seems to be banking on tax reforms and cheap money continuing. Or there's an acknowledgement if people start to sell off they may well create a stampede - not quite sure on this tbh its strange they haven't had a correction.
I think if we see a bit of a stronger rally in the US in the coming days / couple of weeks that may be enough for AUS to flirt with 5900 and then go merry christmas lets celebrate back to 6000.
From following the ASX200 in recent weeks its become very clear to me how much we follow the US market and more particular the SPI futures which are probably being bought and sold by americans? It seems to be a self fulfilling prophecy atm. Oh SPI are down the market will open lower today. I mean, having worked in global politics before I know Australia follows the US though this seems a bit much haha but its what I'm seeing! With a dash of a commodity prices making up the balance of influence.
A bit fickle atm but perhaps if the US has a little rally and commodity prices go flat or inch higher we could run back up to 6000 from some sort of 5900 test. Or we could fall lower if we don't get something to grab onto to let us know everything will be ok. We're in a funny part of the world
