ASX 200 confirms breakout

The ASX 200 closed above its 2015 high of 6000, confirming an earlier breakout by the All Ords. The immediate target for an advance is 6250 (5950 + 300) but the long-term target is the 2007 high of 6800.

ASX 200

I remain wary of the banks, with the ASX 300 Banks index facing resistance at 8800. Reversal below the medium-term trendline at 8600 would warn of another test of primary support (8000). Recovery above 8800 is as likely. I remain concerned over their low capital base and high mortgage exposure.

ASX 300 Banks

Miners are more bullish despite the falling iron ore price. The ASX 300 Metals & Mining index reached its target of 3500 but is now retracing to test the new support level. Respect would signal another advance.

ASX 300 Metals and Mining

Australia seems headed for a period of political instability, while tighter Chinese monetary policy and a crackdown on capital outflows could also impact on the Australian economy. There is a lot that could go wrong but the market is taking this in its stride. Just temper your optimism with a measure of caution.

All Ords breaks 6000

The All Ordinaries Index broke resistance at 6000, signaling a primary advance. Long-term target for the advance is 7000, but wait for retracement to respect the new support level.

ASX All Ordinaries Index

The ASX 200 closed above 5950 but below its 2015 high of 6000, indicating that small caps are advancing slightly faster than large caps.

ASX 200

The ASX 300 Banks index faces stubborn resistance at 8800. Reversal below the medium-term trendline at 8600 would warn of another test of primary support at 8000. With low capital leverage ratios and Sydney house prices now falling, the sector may be headed for testing times.

ASX 300 Banks

The ASX 300 Metals & Mining index is more bullish, breaking resistance at its three-year high of 3300 to signal another primary advance. I remain cautious because of iron ore weakness and rising Chinese interest rates but retracement that respects the new support level would confirm the advance.

ASX 300 Metals and Mining

The Australian Dollar is falling, iron ore is weak and banks face headwinds but the overall outlook remains (surprisingly) bullish.

ASX 200 selling pressure as iron ore falls

Iron ore is falling in a sharp, typical bear market decline since it penetrated its rising trendline. A test of the June 2017 low at $53 is now likely.

Iron ore

The ASX 300 Metals & Mining index broke support at 3200 and looks set to test 3000. But respect of 3000 would confirm the long-term up-trend.

ASX 300 Metals and Mining

The ASX 200 continues to test support at 5650, in the narrow ‘line’ formed over the last four months. Twiggs Trend Index peaks below zero warn of selling pressure. Breach of support is likely and would signal a primary decline. Wait for confirmation from a breakout.

ASX 200

The ASX 300 Banks index is testing resistance at 8500 after a bear market rally. Respect would be a bearish sign and breach of 8000 would signal a primary down-trend. Recovery above 8800 is unlikely at present but would complete a double-bottom reversal.

ASX 300 Banks

Banks and Mining have so far counter-balanced each other, with miners rallying when banks fall and banks rallying when miners fall. Breakout of the ASX 200 from its narrow line is likely to occur when both banks and miners move in the same direction. Down is more likely at present.