The stock market’s bounce off this morning’s low reflects a degree of “trigger happiness” amongst potential buyers waiting for a catalyst to push the market out of its current range.
Overall volume was relatively light on the stock market today. However, potential buyers are aware that a significant break above resistance in the ASX200 index could kick start a round of self-fulfilling optimism. The recent lack of bad news has seen buyers begin to pre-empt this scenario.
Today’s news of Japan’s weaker than expected export growth is seen as increasing the probability of further stimulus by the BOJ and has supported regional stock markets.
BHP’s quarterly production report rounds out a series of solid reports by the big mining companies. This has helped consolidate investor confidence that the big, low cost miners are putting themselves in a position to ride out the commodity cycle.