The week on a high

Traders will be considering if the all-important top of the market is in with a price retracement in overnight markets. Is the Dow really up two points coming into the close after an intraday sell of 57 points?

Dow Jones
Source: Bloomberg

After solid gains of 570 points on the Dow 30 in five trading days, the current move could be looking a little stretched.

The S&P 500 is already hitting most analysts’ full year predictions, with the index finishing flat at 2346 last night. There would be a build-up of those willing to stand in front of this freight train bull market, with short positions trying to pick the top, without any evidence of real market weakness. These are brave souls in this new world order of reinflation.

With legendary investors Warren Buffett and Charlie Monger increasing their positions in American Airlines and Apple, a position that has reportedly already made a billion dollar profit, this bullish stage of the markets may just be getting underway.

Reports to watch for today include Medibank Private; commentary will surround the number of services provided. Santos are also reporting today and investors will be looking for commentary around the debt load and the effects of the rising oil price on cash flows. So far, about 50% of the ASX 200 companies have reported results, with 70% lifting dividends and 15% having lowered the dividend.

Our market has now been higher seven out of eight trading days and testing resistance at 5830. This may be the point of inflection for traders as the resistance of 6000 points is tantalisingly close. Continued upbeat reporting may just allow the market to retest levels in the near future.

WTI oil is testing the upper resistance levels of $54.00 in the consolidation phase, oil is up 35 cents in quiet trading and the Baker Hughes rig count currently at 741 will be updated tomorrow morning at 5am AEDT.

Overnight SPI futures are lower by one point, and a flat open is be expected. 

The AUD/USD cross again tested highs overnight at 0.7732 - just shy of the multi-month resistance of 0.7760.

With iron ore higher by 1.2% and the 62% iron ore futures showing $89.50/ton, all is well in the broader commodity complex.The BHP ADR shows $26.65 down from yesterday’s close of $26.94. A positive day is expected on the back of a broadly upbeat reporting week, with any price consolidations being looked at as a place to enter in the aspiring bullish run to 6000 points.

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