Miners Drag ASX 200 Index Lower as Rising Yields Breaks 8,600 Support

ASX 200 Heat Map Shows Miners Dragging While Xero Rebounds

If it’s not one sector underperforming it’s the other. This time the banks are holding the line, with CBA (+1.91%) and ANZ (+1.06%), while Xero (+8.13%) is the clear large-cap standout. Miners were the ones getting the beating in the Australian market session. PLS (-5.80%), EVN (-5.52%), and LTR (-6.0%) were the sharper downside moves, with lithium names hit by renewed supply worries linked to Chinese mine restart headlines, while gold and diversified miners are also getting smacked as copper, gold, silver dropped and bond yields rose.

The Index is down marginally for the day. However, market breadth continues to deteriorate with the percentage of stocks below their 20-day moving average set at now 39%. Perhaps when it goes below 30% and crosses back over will be the signal that this pullback has ended.

Mining Weakness Offsets Bank and Tech Strength on the ASX 200

ASX 200 Faces Pressure as Aussie 10-Year Yield Approaches 5.10%

The Australian 10-year yield held support at the 4.886% level and is now trending higher. It is testing the 5.086% pivot high and if it breaks through can go even further towards 5.20%.The yield is above both its 50-SMA and 500-SMA, with the RSI above 60 and the Z-Score SMA is heading higher. Yields tend to have an inverse relationship with equity prices so that given that yields are trending higher, it confirms with the bearish moves on the ASX 200 Index.

Australia 10-Year Yield Renko Holds Above Medium and Long Term MAs

ASX 200 Renko Breakdown is Through 8,600 Support

ASX 200’s Supertrend flipped back into negative territory. Its 50-SMA and 500-SMA are still both above the bricks. The RSI is below 40 and the Z-Score SMA has trended back lower. This is not a good sign for the Index. It’s below the 8,600 support and looks as though there’s momentum for it to move lower. The next level of medium term support appears to be 8,255.

ASX 200 20-Brick Renko Slips Below Key Moving Averages

The Verdict

Current Trend Direction: Bearish

Bias: Negative

Support Levels: 8,255

Resistance Levels: 8,915, 9,230

Medium Term Path: The ASX 200 continues to look vulnerable with the Index trading below 8,600. It is also below its 50-SMA and 500-SMA. That 8,255 level is starting to look like the level of support required to trigger a trend reversal as the 8,915 resistance is still too heavy to break through. Rising yields aren’t helping as well. Market breadth isn’t helping either. ASX 200 is expected to continue to face lower highs and lower lows in the medium term.