US markets mixed, oil rallies above recent resistance level, ASX futures up 6 points

There's little to talk about this morning in the way of foreign equity markets; as discussed recently, we need the S&P 500 to make a run and a break through 2,000 to energise a significant local rally. The other thing that would trigger a rally on the ASX would be confidence flowing back into the beaten-down resources sector, and we've seen some--but not enough yet--positive performance from gold, silver and copper over the last month or so, but last night the oil price had a rally to pushed its price through two-month highs and this will give that sector a boost today.

As you can see in today's first chart, WTI crude oil (in orange) has pushed higher over the last few sessions and last night rallied by nearly 6% to close above US$49 per barrel. The black line is Woodside Petroleum (WPL) and the stock has been subjected to the double-whammy recently from the oil price falls in August and then the market's response to its takeover bid for Oil Search (OSH), which it has been partly addressed through WPL's decision not to indulge the OSH board, which is calling the bid too cheap. So if WPL can wiggle back out of that bid and at the same time we see higher prices in crude markets, there could be room for a short-term recovery for WPL.

Recent action on the ASX 200 market has turned our technical view from bearish to bullish, as outlined in yesterday's analysis published in Rivkin Global. Rivkin Global Investment Director Oliver Gordon writes, "With the price closing above the 5125 level, we have changed our outlook to bullish. From current levels, it would take a close back below 5125 for us to revert to neutral... we believe the ASX200 has put in a low that should last for weeks at least. From here, we expect to see a return to the 5300 to 5400 region."

Lastly, yesterday's RBA "hold" seemed to have shaken out bets positioned for further rate cuts, and as a result this has strengthened the Australian dollar. Today's last chart shows the AUDUSD currency pair trading above US$0.7150 this morning as it continues to build from that low in early September. It has another cent to rally before it will likely turn current selling resistance into buying support at around US$0.7250. For now, the short-term trend is up.


Source: Rivkin, Saxo Bank

To view the Rivkin economic calendar and Global Markets matrix, members can click here.

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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