ASX200 higher despite concerns over new COVID scare and rebalancing

A week out from the start of the school holidays and the Easter Long weekend, a new locally transmitted case of COVID-19 has been detected in north Brisbane.


How the new case, a 26-year-old man contracted the virus is unknown. However, after being infectious within the community since the 19th of March, health alerts have now been issued across 100’s of suburbs.

Given the State Premiers' very low tolerance of new locally transmitted cases with unknown sources, it has revived memories of the pre-Christmas “Northern Beaches” outbreak in Sydney that saw State borders slam shut, throwing the plans of holidaymakers into tatters.

Testing over the next three to four days is likely to determine whether a repeat will occur. The uncertainty that this creates is likely to weigh on the mind of local traders, already nervous ahead of the rumoured large end of month and end of quarter rebalancing flows in equities and bonds.

The Goldman Sachs pension model predicts around $US60bn of US equities need to be sold for month/quarter-end, the 4th largest over the past three years. JP Morgan has in a note to clients highlighted the risks of the large selling rebalancing flows not eventuating and the risks of the market moving higher in the near term.

When two big giants of Wall Street can’t agree on something like this it doesn’t make it easy for the rest of us!

This suggests that once the uncertainly created by the situation in Brisbane and month-end is in the rear vision mirror, it would pay to focus on the levels the ASX200 needs to break to end to the sideways trading, viewed since the beginning of March.

Specifically, should the ASX200 break and close above recent highs 6860ish it is likely to result in a test of the February 6938 high, with scope towards the top of the trend channel currently near 7050.

Aware that should the ASX200 break/close below recent lows 6670/50 it would negate the short-term bullish bias and result in a test of the year-to-date low, near 6500.

Learn more about trading indices

ASX200 higher despite concerns over new COVID scare and rebalancing

Source Tradingview. The figures stated areas of the 26th of March 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.