Asian Open: Worst session for the ASX 200 in 4-Months

Falling nearly 2%, it wasn’t a great day to be long the ASX 200. The question now is whether it was a mere blip in its uptrend or the turning of the tide.

Australia

Asian Futures:

  • Australia's ASX 200 futures are up 27 points (0.37%), the cash market is currently estimated to open at 7,396.50
  • Japan's Nikkei 225 futures are up 120 points (0.4%), the cash market is currently estimated to open at 30,128.19
  • Hong Kong's Hang Seng futures are up 148 points (0.58%), the cash market is currently estimated to open at 25,864.00

UK and Europe:

  • UK's FTSE 100 index fell -71.32 points (-1.01%) to close at 7,024.21
  • Europe's Euro STOXX 50 index fell -0.04 points (0%) to close at 4,177.11
  • Germany's DAX index rose 12.87 points (0.08%) to close at 15,623.15
  • France's CAC 40 index rose 15.83 points (0.24%) to close at 6,684.72

Thursday US Close:

  • The Dow Jones Industrial fell -151.69 points (-0.43%) to close at 34,879.38
  • The S&P 500 index fell -20.79 points (-0.47%) to close at 4,493.28
  • The Nasdaq 100 index fell -59.8 points (-0.38%) to close at 15,561.05


Learn how to trade indices


Indices: Wall Street edges lower once more

US jobless claims approached an 18-month low, with initial claims shedding -35k and continual falling -20k. Yet whilst it takes the edge of a weaker than expected NFP print, it doesn’t fully make up for it given just 235k were added compared to the 720k expected, and that was reflected in equity markets which were lower for a fourth consecutive session. The S&P 500 was down -0.27% although continues to hold above its 20-day eMA. 6 of its 11 sectors were lower, led by real estate and consumer staples whilst financials and healthcare supported the broader market, so quite balanced in the grand scheme of things.  




It wasn’t the best day for bullish ASX 200 traders yesterday, with the large cap index failing -1.9% during its worst session in 4-months, causing the ASX 200 VIX index (AXVI) to rise to a near 2-month high. It was a -2 standard deviation day, but it is worth noting that single -2SD days haven’t usually triggered an extended sell-off during this bull trend. But then to counter that, if this is a turning point, then the dynamics have changed and the -2SD day may be a red flag for bulls.

From here we’d like to see the 7430 area hold as resistance for potential bearish setups over the near-term. Futures markets are pointing to a positive open and the AXS open around 7400, so it leaves a little wriggle room for upside early on for bears to consider fading into before gunning for 7300 and maybe the 7200 support zone.


ASX 200 Market Internals:


ASX 200: 7369.5 (-1.90%), 09 September 2021

  • Energy (0.04%) was the strongest sector and Information Technology (-3.18%) was the weakest
  • All 11 sectors closed lower
  • 6 (3.00%) stocks advanced, 190 (95.00%) stocks declined
  • 9 stocks hit a new 52-week low
  • 65% of stocks closed above their 200-day average
  • 58.5% of stocks closed above their 50-day average
  • 34.5% of stocks closed above their 20-day average

Outperformers:

  • + 1.84%   -  Resmed Inc  (RMD.AX) 
  • + 1.38%   -  Whitehaven Coal Ltd  (WHC.AX) 
  • + 0.42%   -  Elders Ltd  (ELD.AX) 

Underperformers:

  • -7.93%   -  Virgin Money UK PLC  (VUK.AX) 
  • -6.32%   -  Orocobre Ltd  (ORE.AX) 
  • -5.71%   -  EML Payments Ltd  (EML.AX) 


Forex: Dollar down as ECB (kind of) tapers

The ECB slowed the pace of their bond buying in a move which President Lagarde described as “recalibrating PEPP”. Call it what you will, but the euro benefitted, even if only marginally so. A bullish inside day formed and held above 1.1800 yet closed below its 50-day eMA. So hardly an explosive session.

A bearish engulfing candle formed on the US dollar index (DXY) and closed below its 20-day eMA. Form here we want to see if 92.3 can hold as support before it moves higher once more, in line with its rally from the 200-day eMA.

AUD/USD held above the 20-day eMA for a second session and formed an inside day / Doji, so signs of stability are present since pull back from the 0.7478 high were the 200-day initially capped as resistance.

GBP/USD erased losses since the UK tax hikes were announced and closed the day as the strongest major and pair we track. A 3-bar bullish reversal (Morning Star) has now formed following its bounce from the 200-day eMA, making it a pair to watch for bulls on the daily chart.

It’s fairly quiet on the data front in today’s Asia session, with electronic card retail sales and migration data kicking off at 08:45 BST.


Learn how to trade forex


Commodities: China dents oil demand

Oil prices were lower on reports China planned to tap into state reserves, denting demand for US crude. WTI continues to hold above 67.12 support whilst a break beneath it suggests a deeper retracement against the rally from 61.56.

Silver is meandering around $24 yet still shows the potential for move lower in line with its bearish trend from the May high. It likely just needs to see a weaker US dollar to help push it over.


Up Next (Times in AEST)

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.


How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.


Build your confidence risk free

More from Commodities

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.