ASX 200 Finds Sellers at 8100 Region

• ASX 200 reverses significantly during Wednesday session.
• ASX 200 racing toward previous resistance.
• America could be a bit of a “weight around the neck of Australia.”
• Interest rates could come back into play.

The ASX 200 initially tried to rally during the trading session on Wednesday but gave back gains rather quickly. The AU$8100 level is an area that should end up offering quite a bit of interest, as it is a large, round, psychologically significant figure, and we have in fact seen that happened quite significantly during the trading session on Wednesday.

American Influence

There could be a huge American influence on what happens next, because quite frankly this is a market that continues to see a lot of global risk appetite coming into the picture. All things being equal, the market could very well see a lot of negativity due to the fact that the NASDAQ 100 and the S&P 500 both got absolutely hammered during the session. That being said, the market is likely to continue to see a lot of volatility, and after a session like we have seen on Wednesday, it’s very likely that the market will continue to be on edge as a complete wipeout like we have seen during the session will most certainly have people rethinking positioning.

At this point in time, the market does look a little overextended, and perhaps traders are willing to step in and take profit in this region. The AU$7900 level is an area that previously had been significant resistance, so it does make a certain amount of sense that the market would show a significant amount of “market memory” at that area, perhaps offering support.

BHP, As an Example

BHP fell during the session as well, but what’s interesting about this market is that traders have spent so much time defending the AU$42 level that the next couple of sessions could be very influential for this Australian stalwart. If the market were to break down below the AU$42 level, the market could then drop down to the AU$40 level.

ANZ, as Another Example

On the other side of the equation, ANZ has reached the AU$30 level, perhaps defying gravity while so many of the larger stocks around the world got hammered. It is on the verge of a breakout, but it is also at a major resistance barrier. Ultimately, we could start to see a bit of a bifurcation between commodities and banks.

As commodities and financials are two of the biggest sectors in Australia, it will be important to watch both of these tickers as they could give traders a bit of a “heads up” as to what traders believe is about to happen next. Keep an eye on the Australian 10 year yield, as raising rates could have a major influence on the financial sector as well.

ALL, for Consumer Discretionary

Aristocrat Leisure Limited rallied almost a full percent during the Wednesday session, suggesting that perhaps Australian discretionary stocks may have a little bit of life to them. At this point, it will be crucial watch this particular ticker to get an idea as to whether or not luxury or leisure could possibly do well in Oz.

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