US markets back at or near all time highs, major euro markets 1.5% higher, ASX futures up 7 points

Just like the scene in Wizard of Oz when Dorothy's house lands on the Wicked Witch, it seems that investors have come out from hiding and celebrated the easing of acrimony between European leaders. Germany's DAX index has jumped 10% from its lows 10 days ago, major US markets are eyeing off all-time highs (with the NASDAQ already back there) and US earnings season has kicked off with a pleasant tone. In today's second chart you can see that US S&P 500 volatility has dropped right back to the bottom of its normal range. Aside from poor earnings from Goldman Sachs (mostly expected, due to litigation and regulatory issues), there was plenty of good news from Google, Citibank, eBay and Netflix, among others. So today, the first Friday in some time when investors haven't been fearing a weekend of heated eurozone talks, we might just see a bullish close into the weekend. 

With that complacency in mind, let's focus on the current level of Australia's ASX 200. We are now well above the previous selling resistance that existed up to about 5,610 points. Yesterday our day session closed at 5,670 and, even if the market finishes lower today, a close above 5,610 will still be a big positive for us. Why? If we can consecutively close above that level, then the previous selling resistance will have turned into buying support and the market can focus on getting back into the previous 5,750-6,000 range.

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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.

Complex product warning

This article contains information about foreign exchange contracts, which are considered complex financial products. Please click here to read ASIC's foreign exchange trading article before considering an investment in foreign exchange contracts. 

This article contains information about CFDs, which are considered complex financial products. Please click here to read ASIC's "Thinking of trading contracts for difference?" document before considering an investment in CFDs.
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