Evening Wrap: ASX 200 surges to record high as profit taking savages critical minerals stocks, LYC, ILU tumble

The S&P/ASX 200 closed 77.5 points higher, up 0.86%.

A big breather in critical minerals stocks generally today. Hey, you didn’t think they were all going to go up double-digit percentages every day forever, did you? 🤷

Nope, hot money stampedes in… and then it stampedes out 💨.

The bigs lost ground (like Iluka Resources (ILU) (-10.6%) and Lynas Rare Earths (LYC) (-5.7%)), but the smalls lost – um, what's bigger than "ground"? Let's go with "continents"!!!

Be sure to click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all the key economic data in tonight's Evening Wrap.

Also, I have detailed technical analysis on the S&P/ASX 200 in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 77.5 points higher at 9,068.4, 0.86% from its session low and 0.46% from its high. In the broader-based S&P/ASX 300 (XKO) advancers beat decliners by 169 to 113.

Fund Flows: The most risk-averse way possible

Not a great deal different from yesterday really. Obviously, there’s the record new high and record closing high. No Evening Wrap would overlook that, so I better not! But I don’t think that if you’re a long-time sufferer of my rantings here, it would be big news to you – we’ve been tracking improving technicals for over a week now.

It’s more about which sectors did the heavy lifting today. Apart from Real Estate (XPJ) (+2.8%), which was largely juiced by a big move in sector heavyweight Goodman Group (GMG) (+4.9%), it smacked once again of funds being forced to add risk (they can’t wait for a pullback any longer) – but doing so in the most risk-averse way possible. So, Health Care (XHJ) (+1.3%) and Financials (XFJ) (+1.2%) did the heavy lifting at index level again.

The Gold Sub-Index (XGD) (+2.2%) was good again, that’s not going to shock anyone, and the rest were ok-to-middling. I do note however, that two sectors we have identified here as serial underperformers were the only two losers today – Utilities (XUJ) (-0.4%) and Information Technology (XIJ) (-1.1%). Don’t fight the flows! 🏄

Stock Specifics: Situation critical

A big breather in critical minerals stocks generally today. Hey, you didn’t think they were all going to go up double-digit percentages every day forever, did you? Nope, hot money stampedes in… and then it stampedes out.

Today it was the later as the bigs like Iluka Resources (ILU) (-10.6%) and Lynas Rare Earths (LYC) (-5.7%) lost ground, and the smalls – well many of them dissolved… like Ionic Rare Earths (IXR) (-25.0%), Nova Minerals (NVA) (-19.6%) and Cobalt Blue Holdings (COB) (-16.4%). Those last three had each stacked on 100, 500, and 500 percent gains this month give or take – so it’s an example of how the market can, um, give or take!

Nova minerals loss today looks bad, unless you consider how much it’s soared this month!

Where to from here? In my experience – which dates back over 30 years of ASX mad-punter silliness – suggests this move isn’t done yet. But one clearly has to be nimble as the throng loses interest in one shiny new thing and moves to the next.

Today's best blue chip gainers

Today's worst blue chip losers

ChartWatch

S&P/ASX 200 (XJO)

S&P/ASX 200 chart (click here for full size image)

It made us work for it… really work for it… but the Old Tin Pot, ahem, Golden Le Creuset – has finally come through!

A new record high and closing high 🍾🥳🙌!

And a decent candle to boot. Yes, it could have been better – by closing on the high rather than that trepidatious upward pointing shadow that indicates a nagging sell the rally mentality among some fund managers – but we as beggars shan't be choosers.

The 3-Sep “that candle” supply event has officially been dispensed with. We now enter a new phase of the demand-supply environment – one of apparent strong demand-side control. I say this because I can see:

• Trends: Short and long term trend ribbons ⬆️/⬆️, widening (getting stronger), acting as a zone of dynamic excess demand ✅.

• Price action: Rising peaks and rising troughs (i.e., supply removal and demand reinforcement) ✅.

• Candles: Predominantly demand-side in nature (i.e., white-bodied candles and or downward pointing shadows) ✅.

✅✅✅ = Short and long term demand-side control.

View: Three ticks means only one thing for me (but Carl, a value investor told me stocks are crazily expensive, that they haven’t been this overvalued since…) Blah blah blah! It means only one thing for me: FRP (Full Risk Position = My personal allowable capital allocation limit for my investments in Australian stocks is 100%).

Key levels: 8843 is the closest key point of demand, the price should not close below here if the demand-side is in control of the XJO’s price. Ultimately though, 8731 remains the critical go-no-go zone for the XJO bull market = ⚠️.

Economy

Today

• AUS September Employment Change & Unemployment Rate

  • Employment Change: +14,900 vs +20,000 forecast and -5,400 in August (i.e., growth, but slow by last 12-month trend standards and worse than expected 👎)

  • Unemployment Rate: 4.5% vs 4.3% forecast and 4.2% in August (i.e., worse, and worse than expected 👎)

  • Expert Comment: "on these measures we think the labour market will deteriorate more, albeit very slightly. We have previously forecasted peak of the unemployment rate around 4.5%, which means that today’s level will become more entrenched, rather than just a one-month spike." –My Bui, AMP Economist

Later this week

Thursday

• 23:30 (Tentative due to shutdown) USA September Core PPI

• 23:30 (Tentative due to shutdown) USA September Retail Sales

Friday

23:30 (Tentative due to shutdown) USA September Building & Housing Permits

Latest News

Interesting Movers

Trading higher

• +57.1% American West Metals (AW1) - Placement to Advance America's Largest Indium Deposit.

• +42.6% Bougainville Copper 1 Kina (BOC) - Continued positive response to 15-Oct Quarterly Production & Strategic Partnering Report.

• +22.0% Firefly Metals (FFM) - High-grade intersections extend known mineralisation by 650m, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +20.3% Terracom (TER) - Continued positive response to 15-Oct Blair Athol JORC Code Update.

• +18.2% Lumos Diagnostics Holdings (LDX) - Lumos Agreement with WellStreet Urgent Care for FebriDx, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +17.4% Core Lithium (CXO) - Cleansing Notice - Share Placement.

• +17.1% Brazilian Critical Minerals (BCM) - No news, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +15.4% Tivan (TVN) - Tivan agrees strategic partnership with Exante Data, rise is consistent with prevailing short and long term uptrends 🔎📈

• +15.1% Clarity Pharmaceuticals (CU6) - Clarity signs copper-67 Supply Agreement with Nusano, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +14.3% Cygnus Metals (CY5) - No news, rise is consistent with prevailing short and long term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +13.6% Meeka Metals (MEK) - 22m @ 3.25g/t Au - Thick, High-Grade Gold, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +13.6% Jumbo Interactive (JIN) - Continued positive response to 15-Oct Investor Presentation - Acquisition of Dream Car Giveaways.

• +13.0% NH3 Clean Energy (NH3) - No news, rise is consistent with prevailing short and long term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +12.4% AI-Media Technologies (AIM) - No news, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +12.2% Haranga Resources (HAR) - Continued positive response to 15-Oct Oversubscribed Placement Cornered by Gold FundN, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +11.9% Aldoro Resources (ARN) - Phase II Drilling Program Commences at Kameelburg Project rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +11.5% Sun Silver (SS1) - Continued positive response to 15-Oct Drilling hits significant mineralisation at Maverick Springs, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +11.5% Vertex Minerals (VTX) - No news 🤔.

• +11.3% Mayne Pharma Group (MYX) - Outcome of litigation and update on Scheme and Update on FIRB approval.

• +10.6% Fenix Resources (FEX) - Quarterly Activities Report, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +10.5% Hub24 (HUB) - No news 🤔, rise is consistent with prevailing long term uptrend 🔎📈

Trading lower

• -25.0% Ionic Rare Earths (IXR) - IXRO Options Range of Units and Top 20 Holders, general weakness across the broader Critical Minerals sector today, pulled back in the wake of recent sharp rally.

• -24.6% Novonix (NVX) - No news, general weakness across the broader Critical Minerals sector today, pulled back in the wake of recent sharp rally.

• -21.9% Australian Rare Earths (AR3) - No news, general weakness across the broader Critical Minerals sector today, pulled back in the wake of recent sharp rally.

• -19.6% Nova Minerals (NVA) - Nova Undertakes Share Split of NASDAQ Listed ADSs, general weakness across the broader Critical Minerals sector today, pulled back in the wake of recent sharp rally.

• -17.6% American Rare Earths (ARR) - No news, general weakness across the broader Critical Minerals sector today, pulled back in the wake of recent sharp rally.

• -17.0% Metro Mining (MMI) - Quarterly Activities/Appendix 5B Cash Flow Report.

• -16.4% Cobalt Blue Holdings (COB) - No news, general weakness across the broader Critical Minerals sector today, pulled back in the wake of recent sharp rally.

• -14.1% Locksley Resources (LKY) - No news, general weakness across the broader Critical Minerals sector today, pulled back in the wake of recent sharp rally.

• -13.0% Australian Strategic Materials (ASM) - No news, general weakness across the broader Critical Minerals sector today, pulled back in the wake of recent sharp rally.

• -12.5% Dateline Resources (DTR) - Annual Report to shareholders, general weakness across the broader Critical Minerals sector today.

• -12.1% St George Mining (SGQ) - No news since 15-Oct First Diamond Hole Extends Araxa MRE to West, general weakness across the broader Critical Minerals sector today, pulled back in the wake of recent sharp rally.

• -11.7% Elsight (ELS) - No news, general weakness across the broader Defence sector today.

Broker Moves

29Metals (29M)

• Retained at sell at Canaccord Genuity; Price Target: $0.25 from $0.30

• Retained at underweight at Jarden; Price Target: $0.28 from $0.30

• Upgraded to hold from underperform at Jefferies; Price Target: $0.40

• Retained at neutral at Macquarie; Price Target: $0.45 from $0.50

• Retained at lighten at Ord Minnett; Price Target: $0.35 from $0.40

• Retained at sector perform at RBC Capital Markets; Price Target: $0.35 from $0.40

Astral Resources NL (AAR)

• Retained at buy at Shaw and Partners; Price Target: $0.45

Aussie Broadband (ABB)

• Retained at buy at UBS; Price Target: $6.50 from $6.00

ARB Corporation (ARB)

• Retained at buy at Citi; Price Target: $45.17

AUB Group (AUB)

• Retained at outperform at Macquarie; Price Target: $37.40

Beamtree Holdings (BMT)

• Retained at buy at Shaw and Partners; Price Target: $0.60

Bank of Queensland (BOQ)

• Retained at neutral at Citi; Price Target: $7.00 from $6.60

• Retained at hold at CLSA; Price Target: $7.20 from $7.90

• Retained at underweight at JPMorgan; Price Target: $6.10 from $6.20

• Retained at equal-weight at Morgan Stanley; Price Target: $6.80 from $6.70

• Upgraded to hold from trim at Morgans; Price Target: $6.87 from $6.20

• Retained at lighten at Ord Minnett; Price Target: $6.00

Catapult Sports (CAT)

• Retained at buy at UBS; Price Target: $8.50 from $7.00

Commonwealth Bank of Australia (CBA)

• Retained at sell at UBS; Price Target: $125.00

Computershare (CPU)

• Upgraded to neutral from sell at UBS; Price Target: $39.00 from $41.20

Elevra Lithium (ELV)

• Retained at outperform at Macquarie; Price Target: $5.50

Evolution Mining (EVN)

• Retained at hold at Canaccord Genuity; Price Target: $10.75 from $9.50

• Retained at neutral at Citi; Price Target: $11.00 from $10.50

• Retained at underweight at Jarden; Price Target: $6.70 from $6.05

• Retained at underperform at Jefferies; Price Target: $8.00

• Downgraded to neutral from overweight at JPMorgan; Price Target: $11.00

• Retained at underperform at Macquarie; Price Target: $7.60

• Retained at hold at Ord Minnett; Price Target: $10.50 from $10.20

GWA Group (GWA)

• Retained at outperform at Macquarie; Price Target: $3.05

IGO (IGO)

• Retained at outperform at Macquarie; Price Target: $5.75

Imugene (IMU)

• Retained at speculative buy at Bell Potter; Price Target: $0.82 from $3.40

James Hardie Industries Plc (JHX)

• Retained at outperform at Macquarie; Price Target: $37.20

Jumbo Interactive (JIN)

• Retained at hold at Bell Potter; Price Target: $11.85 from $11.50

• Retained at positive at E&P; Price Target: $17.85 from $15.09

• Upgraded to overweight from neutral at JPMorgan; Price Target: $14.00 from $11.50

• Retained at outperform at Macquarie; Price Target: $13.90

• Retained at overweight at Morgan Stanley; Price Target: $16.80 from $15.20

• Upgraded to buy from accumulate at Morgans; Price Target: $15.90 from $12.90

• Retained at hold at Ord Minnett; Price Target: $11.10 from $10.40

Liontown Resources (LTR)

• Retained at underperform at Macquarie; Price Target: $0.65

Orora (ORA)

• Retained at outperform at Macquarie; Price Target: $2.35 from $2.40

• Retained at hold at Ord Minnett; Price Target: $2.00 from $2.20

Orezone Gold Corporation (ORE)

• Retained at buy at Canaccord Genuity; Price Target: $3.00

Pilbara Minerals (PLS)

• Retained at outperform at Macquarie; Price Target: $2.75

Prospect Resources (PSC)

• Retained at speculative buy at Canaccord Genuity; Price Target: $0.45

Reece (REH)

• Retained at underperform at Macquarie; Price Target: $10.10

Regal Partners (RPL)

• Retained at buy at Bell Potter; Price Target: $4.40 from $4.10

• Retained at buy at Morgans; Price Target: $4.00 from $3.70

• Retained at buy at Ord Minnett; Price Target: $4.90 from $4.30

Reliance Worldwide Corporation (RWC)

• Retained at outperform at Macquarie; Price Target: $5.30

Sheffield Resources (SFX)

• Retained at hold at Ord Minnett; Price Target: $0.10 from $0.13

SGH (SGH)

• Retained at outperform at Macquarie; Price Target: $53.20

Santana Minerals (SMI)

• Retained at buy at Shaw and Partners; Price Target: $1.63

SRG Global (SRG)

• Retained at buy at Ord Minnett; Price Target: $3.15 from $2.00

Spirit Technology Solutions (ST1)

• Initiated at buy at Bell Potter; Price Target: $0.60

Scans