Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

No Breakthrough Today

Published 18/08/2017, 10:30 am
Updated 04/08/2021, 01:15 am

Originally published by CMC Markets

Today will not be the day the S&P/ASX 200 finally breaks through the ceiling around 5800.Concerns over the state of US politics and a weak lead from international markets will see the ASX 200 fall away from this level yet again.

Markets are clearly nervous about US political risk. While business and Republican party support might still mean that infrastructure and tax reforms are passed, the wider concern for markets is the possibility that the last 12 months will translate into another 3 years of government impotence.

US stock markets have been notable for their lack of volatility over the past 6 months. This has provided a relatively steady lead for global stock markets. Prior to the recent moves, the last major decline in the S&P 500 occurred on 17 May when it dropped 1.8%. However, this was a one day wonder and was immediately followed by a low volatility rally

This time may be different. Last Thursday’s Korean scare sell off has now been followed by another significant decline. This could be a more typical situation where volatility creates volatility as pent up profit taking and nervous investors are motivated to act as prices begin to weaken.

The gold market may be a useful indicator of whether any major risk off sentiment is developing in world markets. It is approaching well defined chart resistance between $1300 and $1330. If markets are really concerned, gold is likely to break up through this resistance

Local markets will not be helped today by base metal’s failure to build on the sharp gains of the previous day. This leaves the metals’ rally continuing to show signs of stalling at recent high levels and mining stocks may follow suit today.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.