Highlight Stocks

ASX - Surely one of the most remarkable characteristics of this year's January "correction" is how little relevance technical support levels have played during the sell-offs. One after the other trendline has given in over the past few weeks, and one after the other technical support levels have been breached - all across various assets and markets, across the globe. This hasn't stopped investors from zooming in on the next set of technical support levels. For the Dow Jones Industrial Average (DJIA) the next level of supposedly strong support is located at 9,500. Should this level break, much more important support comes into play: at 9000.

ASX (2) - For the ASX200 index in Australia, the next level of support is located at 4503-4510 (depending on the technical analyst). Were this level to break to the downside, 4300 comes into play. Two things stand out from the past few trading sessions: BHP Billiton ((BHP)) is now below its former trendline and supposedly strong technical support at $40. On Monday, the shares put in a rally to $40.02, but ultimately they ended the day with another loss. Shares like Woolworths ((WOW)) have now returned close to price levels last seen in March last year.

ASX (3) - Some other technical support levels investors might want to keep an eye on: some chartists believe the Nasdaq index in the US leads the two other main indices by about two weeks. The Nasdaq has already broken through support at 2200 and should thus be on its way to 2000, regarded as a key level. The S&P500, similar to the Dow (see above), still has some room left: next support is at 1060, then the focus will shift to 900.

USD - I have since last year argued that a stronger US dollar would require portfolio adjustments by the world's investors, and it seems that is exactly what is happening into the first weeks of 2010. For what it's worth: EUR/USD seems to be heading for technical support at 1.37, after that comes 1.30 into play.

IND - It probably has escaped the attention of most investors, but on Friday the Reserve Bank of India (RBI) unexpectedly announced a higher than expected 75 bp increase in the cash reserve ratio (CRR) to 5.75%. The repo and reverse repo rates remained unchanged, but the RBI is widely expected to start raising interest rates soon, probably from Q2 onwards. This now means that both China and India have started tightening, albeit without lifting official interest rates (yet).