Sellers dominate equity markets again, oil jumps, precious metals firm, ASX futures flat

Australia's ASX 200 pre-empted a poor night by selling off 94 points yesterday during our day session, therefore there was not much selling left to do when the US and Europe traded lower last night. As a result, ASX 200 June futures closed at 5,885 after hitting a low of 5,851. Investors won't mind a bit of skin getting taken off the index if they're in for the long haul, and in today's first chart you can see that some recent buying support exists just below 5,760 and--depending upon the mood of markets globally--this may be our next stop down if selling persists.

After hitting highs of US$0.7936 earlier this week, the Australian dollar has actually held up quite well, trading 1.4% lower than this short term high at US$0.7825 while the ASX 200 futures are off 1.7% from their weekly highs. Today's second chart shows the US dollar index in orange, which has steadied after losing quiet a bit of ground since mid March. It remains higher for the month and continued 'risk-off' behaviour could prompt the world's gang of FX traders to take out long US dollar bets and try to retrace this recent decline.

In today's third chart I have plotted the recent strength of WTI crude oil, which is making a run back up to its recent selling resistance level of just above US$53 per barrel. Anyone familiar with the level of oil stored in the US presently will know that there is a lot of crude stock to sell that is sitting on the sidelines, and--while still very much depressed with regard to prices this time last year--this pop back up near three-month highs might just prove tempting enough to see some selling and I think this resistance line in this particular market could prove quite effective for those wishing to take a low-risk set up by shorting WTI (Rivkin Trader clients can use OILUSMAY15) at levels between US$51 and US$53 and running a tight stop at around US$53.50-US$54.00. There are still so many dim dynamics inherent in this oil market and until the inventory story changes and some supply gets soaked up, I don't think traders should get excited about a significant rebound.

Today‚Äôs charts are taken from the Rivkin Trader platform. 30,000 global instruments available to trade including FX, commodities, index, ETFs and international shares. Trade Australian share CFDs from just $8 or 0.10%. Click here or phone 1300 748 546 to open a Rivkin Trader account now.

Upcoming economic announcements: Japanese CPI and jobless figures out at 10:30am, German retail sales out at 10:50am, Chinese industrial profits out at 12:30pm, UK GDP out at 11:30pm, all Sydney time.


This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

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