For the third day in a row futures markets are pointing to gains for Australian shares. If, for the third day in a row, the Australia 200 index defies these leads there is potential for a rout in the coming days and weeks. The market indicator closed yesterday just a whisker above the support level that has held for four months. A breach and lower close today would of itself provide a sell signal to professional investors.

The grim outlook comes despite positive global and local economic data. In the main there is support for risk assets and investor disdain for safe havens. In previous sessions support for industrial commodities gave cause for optimism. However oil prices dropped overnight despite a huge draw on US inventories and a weaker US dollar. This leaves Australian investors pinning their hopes for today’s session on August retail sales posting a stronger gain than the forecast 0.3% this morning.

Volumes across the Asia Pacific region are expected to remain subdued as Hong Kong and greater China enjoy autumn holidays. The lack of movement in currency markets in regional morning trading supports the proposition. Mild pressure on spot gold and bond markets could feature if equity markets reflect lower interest in trading today.