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Two Ways To Play: Australia Raises Interest Rates Again


Strengthen your portfolio in good times and bad.

The Fear has Passed in Australia

The Reserve Bank of Australia raised interest rates for the third consecutive month last night in an effort to combat rising inflationary pressures.

The Financial Times reports the central bank increased rates 25 basis points to 3.75%. In a statement, RBA Governor Glenn Stevens said, "Growth in 2010 is likely to be close to trend and inflation close to target. With the risk of serious economic contraction in Australia having passed, the board has moved at recent meetings to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker."

For more on the market, see Minyan Jeff Saut's Don't Worry About the Dollar!

From the Bull Pen: Bulls continue to look abroad. Global drink-maker Diageo (DEO) sitting near $67 support on the daily chart may be an opportunity. Those bullish can set a sell stop below that level.

From the Bear Cave: Bears can look to a domestic retail play like American Eagle (AEO). A failed rally near $17 to $17.50 could be makings of a right shoulder in a bearish head-and-shoulders pattern. Consider entry, if and when.

A Quick Check around the World

Asian trading closed with the Nikkei 2.43%, India 1.61%, Hang Seng 1.34%, Shanghai 1.25%, and Taiwan 0.88%.

Across the pond, we see the FTSE 1.62%, CAC 2.06%, DAX 1.98%

As of 8:20 AM EST, S&P Futures are trading +8.50 to 1103.25. Nasdaq futures are +13.25 to 1780.75.

A Look at Commodities

Over in commodities, crude oil is +0.66 to 77.94 while gold is +9.300 to 1191.60 this morning. Silver is +20.5 to 1870.0 and copper +2.350 to 317.20.

The dollar Index is -0.3350 to 74.6000.

On the Radar


10:00 Construction Spending -0.4 cons.
10:00 ISM Index 54.8 cons.
10:00 Pending Home Sales -0.3 cons.

Click here for the full trading radar.

Good luck today!
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No positions in stocks mentioned.

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