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Good morning CVELU, The Australian market suffered another setback last week, with major support failing to hold.
The XJO broke below 8,950 and selling accelerated quickly. This reduces the likelihood that the recent high marked the beginning of a new bullish trend. Instead, it increasingly resembles a liquidity grab, leaving the market stuck in the “kangaroo market” that has characterised much of 2026.
Adding to the pressure, the Australian 10-year bond yield has broken to new highs. Rising yields create a challenging environment for growth stocks and increase the risk of tighter monetary policy. Consumer Discretionary and Information Technology have already fallen sharply. Short-term rallies are always possible, but their larger trends remain bearish and continue to suggest major cycle tops formed late
last year.
There are currently few compelling bullish opportunities across the broader market. For now, the focus shifts from offence to defence and capital protection.
September also warrants caution. Historically, it has been the weakest month for US equities, with the second half often particularly challenging.
With equities weakening, yields rising and growth sectors under pressure, caution remains the priority while the market provides further evidence of its next major direction.
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