A Rock and Hard Place - By Michael McCarthy at CMC Markets

9:40 AEST, Monday, 29 December 2014

A Rock and Hard Place

By Michael McCarthy (Chief Market Strategist, CMC Markets)

Conflicting leads once again make the day traders’ life a difficult one. Share prices are higher around the world, and a lack of data releases would generally combine to lift local shares. However, the downward pressure on industrial commodities has returned, and could derail the anticipated half percent rally forecast for today by futures markets.

US shares rose again in Boxing Day trading, and European shares also rose after Asian Pacific markets closed on Christmas Eve. Shares in Tokyo traded uninterrupted and held near six year highs. These positive impulses should support financial, industrial and healthcare stocks at the open, and consumer stocks may be buoyed by anecdotal reports of a surge in post-Christmas shopping activity.

However, none of this may be enough to offset 2% falls in oil prices and copper trading to multi year lows. The downdraft in industrial commodities continues to weigh on materials and energy stocks and down moves may be exaggerated by thin, holiday restricted trading. Charts are also pointing to a pull back, as markets closed last Wednesday’s just below key resistance levels.

ENDS

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