- The ASX 200 pulled back into a consolidation area.
- The market is currently looking at the AU$8000 level, which is a situation where a lot of people are looking at it through the prism of the idea of a large, round, psychologically significant figure, and that of course suggests that perhaps this is a market that is looking for reason to get long.
The Australian index of course is full of a lot of commodities related companies such as Rio Tinto, Macquarie, etc., and at the end of the day the commodity markets do have a major influence on where the market goes. That being said, the market is likely to continue to see a lot of noise, but all things being equal, this is a market that also has a major component of the financial sector, as Australia is a major banking center for a lot of Asian construction.
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At this point in time, it’s like the market is going to be influenced heavily by the risk appetite around the world, which makes a certain amount of sense considering that the Australian Stock Exchange is considered to be a minor exchange, and therefore it needs help from the major ones as well. Think of it as being a little bit further out on the risk appetite spectrum than something like the FTSE 100, DAX, etc.
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Ultimately, this is a market that continues to see a lot of buyers coming back into the market, at least every time it pulls back, and that being said the market certainly seems to have a lot of support below, not just at the AU$8000 region. After that, we also have the 50-Day EMA coming into the picture, closer to the AU$7900 level. Ultimately, we did get a little bit stretched, so I think we are looking for some type of reason to finally break out to the upside and go much higher.
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