Sat. 15/1/22. Oz down, U.S. Mixed.
Yesterday in Australia.
XJO was down heavily -1.08%. The short-term trend is down, but lies in an upsloping channel. It is currently testing support of the lower supporting line of the channel and the 50-Day Moving Average. That suggests hat the next move will be to the upside, but, until horizontal resistance at 7471 is broken to the upside, it is best to remain cautious.
Since early September, XJO has basically traded sideways in a broad range with a false break to the upside produced by the Santa Rally. That's a long time for a sideways trend and frustrating for medium to long-term traders. This type of cautious markets occurs from time to time, but this has been a particularly long period of sideways action. See tomorrow's Weekly Wrap for more on this.
Overnight in the U.S.
Dow Jones -0.56%. SP500 flat +0.08%. Nasdaq +0.59%. Small Caps +0.45%. Banks -0.31%.
Although the U.S. results are mixed, intra-day trading was consistent with strong buying coming into the market in the afternoon session. That's usually a sign that institutions are buying - and confident that further upside will be seen.
SP500.
The short-term trend is to the down-side, but, like the Oz market, SP500 is in a medium-term up-sloping channel. It is currently close to the lower supporting line of that channel. There could be a bit more downside in this but probably not much, with the potential of a double bottom forming. Next move will probably be to the upside.
The intra-day buying last night can be seen in the current candle, with a long lower wick topped by a yellow body. That means that the SP500 opened lower, then fell, followed by strong intra-day buying which took the Index well above its opening price. That's a positive. We need to see follow-through buying in the next day to confirm.
Commodities.
Commodities Index +1.3%. Energy +2.05%. Base Metals -0.22%. Gold -0.29%.
U.S. Banks.
The U.S. Bank Index has been tearing high (see above $bkx) for the past month. Three big banks reported last night and would have needed outstanding results to continue the push higher. The negative divergence on the CCI once again proved to be a leading indicator, and BKX fell last night -0.31%.
It wasn't all bad news. Wells Fargo rose +3.7% last might, but JP Morgan fell more than -6% and Citigroup down -1.3%. Morgan Stanley and Goldman Sachs report next week.
Conclusion.
As indicated above, I'm expecting are market to be up on Monday, but no change in the technical picture.
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