The ASX has bounced strongly off 5100 and there looks to be enough momentum to carry it back above 5300 again. The EU referendum vote in the UK will dominate trading this week, and we have seen a noticeable move in positioning towards the ‘Remain’ camp winning the vote rather than the ‘Leavers’. Were ‘Remain’ to win, the relief rally could be enough to take the ASX back above 5400.
The market internals for the ASX do seem to be pointing to further gains. Companies at new four-week lows have dropped dramatically, indicating sentiment in the index improved, which bodes well for the index this week.