RBA's “Path of least regret” yields another 25 bp rate rise surprise
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By tradinglounge · Posted
MSFT Elliott Wave Analysis Trading Lounge Daily Chart Microsoft Inc., (MSFT) Daily Chart MSFT Elliott Wave Technical Analysis FUNCTION: Counter Trend MODE: Corrective STRUCTURE: Zigzag POSITION: Intermediate (2) DIRECTION: Bottom in wave A of (2). DETAILS: We are considering a significant top in place with wave (1), and we are now looking for a three wave move correction into wave (2). We seem to be finding buyers on Medium Levell 400$, looking for 400$ to turn into resistance. MSFT Elliott Wave Analysis Trading Lounge 4Hr Chart Microsoft Inc., (MSFT) 4Hr Chart MSFT Elliott Wave Technical Analysis FUNCTION: Counter Trend MODE: Corrective STRUCTURE: Zigzag POSITION: Wave A. DIRECTION: Bottom in wave {v}. DETAILS: I can count a clear five wave move into wave A, with alternation between {ii} and {iv}. Looking for a pullback in wave B to then fall back lower. In this comprehensive Elliott Wave analysis for Microsoft Corporation (MSFT), we provide an in-depth review of the stock’s potential movements based on its current wave patterns, as observed in both the daily and 4-hour charts on April 26, 2024. This analysis aims to assist traders and investors in understanding the underlying market dynamics and planning their strategies accordingly. * MSFT Elliott Wave Technical Analysis – Daily Chart* The daily chart of MSFT shows the stock in a corrective phase with a zigzag structure, identified as Intermediate wave (2). Currently, the stock is witnessing a bottom formation in wave A of (2). After observing a significant top in wave (1), MSFT appears to be undergoing a corrective three-wave movement. The price level around $400, which has been attracting buyers, is anticipated to evolve into a resistance level. Traders should monitor this zone closely for potential reversal signals. * MSFT Elliott Wave Technical Analysis – 4Hr Chart* Moving into the 4-hour chart, the analysis continues to reflect a counter-trend with a zigzag corrective structure, highlighting the end of Wave A. Here, a clear five-wave movement has been identified, with distinct alternations between waves {ii} and {iv}. The current position, at the bottom of wave {v}, suggests that the stock might experience a short-term pullback in wave B before potentially declining further. This provides a strategic point for traders to look for entry and exit points during the unfolding of wave B. -
Oh, thank you, that's helpfu! -
By Thomas_McGee · Posted
Recently, the Australian S&P/ASX 200 index slightly fell by 0.01%, with this fluctuation mainly influenced by the latest release of the Consumer Price Index (CPI) data. This data not only demonstrates current inflationary pressures but also directly impacts the stock market in the short term. Senior analyst Thomas McGee delves into the impact of these economic indicators on the Australian stock market and discusses the economic logic behind this data and its potential effects on future monetary policy by the Reserve Bank of Australia (RBA). Market Impact of Inflation Data The CPI data for the first quarter released today showed an annual growth rate of 3.6%, surpassing the market expectation of 3.4%. This immediate announcement led to a drop of about 0.5% in the S&P/ASX 200 index, and the market failed to recover these losses by the closing bell. Thomas McGee points out that this rapid response highlights the sensitivity of investors to inflation trends and their immediate impact on the stock market. In addition to the direct reaction of the stock market, the yield of Australian 2-year government bonds also significantly rose by 0.12%, breaking the 4.4% level for the first time since December last year. This change not only reflects the response of the bond market to the CPI data but may also indicate a cautious stance by the RBA regarding rate adjustments in the short term. Forward-looking Analysis of Monetary Policy Following the release of inflation data, the expectation on the market of the first rate cut of RBA has been postponed to after 2025. Thomas McGee emphasizes the importance of this change for investment strategies. He suggests that investors consider how changes in monetary policy will affect market dynamics when making long-term investment decisions, especially in a scenario where rates may remain elevated for an extended period. With inflation data showing higher than expected figures, the market predicts that the RBA may not cut rates in the short term, intensifying expectations of rate hikes. Thomas McGee mentions that this shift in expectations requires investors to reassess their investment portfolios, particularly in terms of fixed-income asset allocation. Furthermore, Thomas McGee notes that although the market may face pressure in the short term, this could also present entry opportunities for investors seeking higher yields. Companies that can maintain cash flow in a high-rate environment may become preferred investment targets. Addressing Challenges and Seizing Opportunities Despite the uncertainties and challenges brought by the current inflation data, Thomas McGee believes that investors can still find stable investment opportunities in this complex environment through thorough market analysis and understanding of future economic policy trends. He encourages investors to maintain flexible investment strategies while closely monitoring changes in economic indicators and central bank policies to effectively address potential market fluctuations and achieve value growth in future investments.
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