Aussie share market bulls now have company
Today, Australian investors will not have to go it alone buying stocks as they did for much of last week. Bargain hunters this morning will be supported by the morale boosting encouragement of a 3% turnaround in the German Dax and a 264 point rally in the Dow Jones.
The US earnings season will feature as a key driver for stock market sentiment over coming weeks. Results so far have made it difficult for the US market to sustain its downward momentum, especially against a background of continuing low interest rates. Apple’s results to be released after the close of Monday’s session have the potential to influence sentiment tomorrow. Investors will be focussed on commentary regarding sales of iPhone 6.
Sentiment on the Australian market today will be assisted by the fact that commodity prices held their ground on Friday. Markets are concerned about the possibility that commodities under supply pressure, such as iron ore and oil, might fall further than generally expected. Against this background, any signs that commodity prices may be forming a base around current levels will be a welcome relief.
The question for short term traders is now whether last week’s low was a major bottom or whether we have just embarked on a corrective rally against a deeper decline. From a valuation point of view, with bank dividend yields in the 8-9% range after franking, it’s certainly possible it’s certainly possible to make the case for a major low. Technically more evidence is required. If we are now just correcting the 5680/5122 down trend then potential resistance levels include the 38.25 Fibonacci retracement at 5345 and the 200 day moving average at 5426.
For further comment from Ric Spooner please call 02 8221 2137.
Frequently Asked Questions about this Article…
The Australian share market is currently influenced by a 3% turnaround in the German Dax and a 264 point rally in the Dow Jones. Additionally, the US earnings season is playing a key role in shaping market sentiment.
Apple's earnings report, particularly commentary on iPhone 6 sales, has the potential to significantly influence market sentiment. Investors are keenly watching for any insights that could impact stock prices.
Commodity prices have held their ground recently, which is a positive sign for the market. However, there are concerns about potential declines in commodities like iron ore and oil due to supply pressures.
It's uncertain whether last week's low was a major bottom or just a corrective rally. From a valuation perspective, with bank dividend yields in the 8-9% range after franking, there's a case for a major low, but more technical evidence is needed.
Traders should watch potential resistance levels, including the 38.25 Fibonacci retracement at 5345 and the 200-day moving average at 5426, as these could indicate whether the market is correcting or continuing a downtrend.
Low interest rates are helping to prevent the US market from sustaining its downward momentum, providing a supportive backdrop for stock prices despite other challenges.
Bank dividend yields, currently in the 8-9% range after franking, are an important factor in market valuation. They provide a compelling case for a potential market bottom, offering attractive returns to investors.
Investors seeking further commentary from Ric Spooner can reach him at 02 8221 2137 for more detailed insights into the market.
Call 1300 880 160
Start a chat
Schedule a call
