The market looks to have a number of reasons to be nervous today. The list includes:

  • Another weak day for industrial metals, especially iron ore
  • A new round of North Korean sanctions
  • A soft lead from US markets
  • A credit downgrade for China and
  • Caution ahead of the German elections.

Set against this impressive list are a list are a range of factors suggesting it’s not a given that the ASX 200 will have a rough day.

  • Markets have lately begun to turn a blind eye to the North Korean situation. Gold and the Yen have barely moved in response to the sanctions news
  • The bad news for mining investors on metals prices may be at least partially offset by news that Rio will add another $2.5bn to its buyback program
  • A weaker Aussie Dollar will help not only mining stocks but a number of other major stocks like CSL.
  • Perhaps most interestingly of all banks, while not compellingly cheap, have returned to levels that may prove attractive enough in these times of shallow range trading activity

Today may be the day that the ASX 200 breaks conclusively below support but it’s not an obvious call