Watch out for ‘rips’

While I have a broader cautious stance on equities, my current read of the tape suggests equities could ‘rip’ higher…..but be careful.

It’s tricky as it’s not from a notable low and it’s a trading market.

I’ll be watching whether various currency crosses (such as the AUD/JPY) break higher thus confirming an increase in risk appetite.

Also, the AUD/USD is firming but I need a couple nuances to tip over to confirm a move higher.

The S&P 500 weak upward trend (and it’s yet to make a higher high) is juxtaposed against the strength seen in the Nasdaq 100’s trend.

While the Russell 2000, Mid Caps, Small Caps and Copper are in a down trend with all of them a whisker away from those trends confirming strength.

Incidentally, the ASX 200 is yet to make a higher high than the 7,625 seen in April 2022.

Invariably, at moments like this, markets move to where they can do the most damage….and that could be up…but be careful.

I think that the upcoming 2-3 weeks warrant unusual attention.

May 15, 2023

by Rob Zdravevski

rob@karriasset.com.au