Finspiration Australia. Mid-afternoon update.

 RBA holds rates steady.  XJO currently up +0.8%, down -0.7% from its high today.

For Day Trading, exit time for bulls was around 1.00 p.m Eastern Summer Time.

Finspiration Australia. Mixed results in U.S. after last 30 min. surge in prices.

 Overnight:

Dow Jones -0.49%.  SP500 -0.24%.  Nasdaq +0.41%.  Small Caps +0.41%.  Banks -1.31%.

SP500.

Despite the small drop last night, the short-term up-trend remains in place.  The index still has plenty of overhead resistance, but the Supertrend (7,1.5) has turned bullish - that's a good short-term signal.

Commodities.

Commodities Index +1.7%.  Energy +1.13%.  Base Metals +0.87%.  Gold +1.04%.

After ninety minutes of trading this morning, XJO is play ing catch-up with the U.S. from last Friday.  XJO now up about +1.3%.

Finspiration Australia. XJO up strongly today.

 XJO up today +0.73% after nudging into negative territory at 11.15 a.m.  Around 11.00 is often a rebound time for the XJO intra-day.

In context, today's positive result was not impressive.

The XJO remains in bearish conditions.  This remains a "sell-the-rallies" market.

The best performing Oz sectors are Energy (XEJ +1.3%) and Materials (+3%).  

Finspiration Australia. Weekly Wrap, week ended 25/2/22

     XJO was down this week.  Worst performance since October, 2021.

XJO Monthly Chart.

XJO has been in a down-trend since September, 2021.  

In January, the monthly chart gave a long-term sell signal for both the Supertrend (1.5/7) and the 8-Month EMA.

At the end of February (one day to go), the February XJO candle remained below the 8-Month EMA and below the Supertrend.   

I'd like to see the Hull Moving Average turn positive (blue dashes change to yellow dashes) before taking buy action.  For long-term investors - stay defensive.

Weekly Chart.

XJO was down this week, -3.1%.   It remains below the 8-Week EMA, the 50-Week MA and Supertrend (1.5,7).  The Hull Moving Average remains negative (blue dashes).  

Trends are down on all time-frames.  Stay defensive.

Daily Chart.

XJO on Thursday broke down from its consolidation zone.  That took it down to a minor Support/Resistance Zone.  Tuesday saw an early warning of further downside when the Supertrend switched from yellow to blue (bearish).

Friday's action in the U.S. suggests we'll see a big upside move on Monday which should result in a test of the recent large consolidation zone.

That will look promising for the market, but the XJO still has very strong resistance levels above the current level.  Stay defensive.

Sector changes this week.

Only three sectors were up this week.  Two of those were defensives.  Best was Consumer Staples (XSJ) +3.39%.  Utilies (XUJ) up +1.67%.  Energy (XEJ) +0.72% benefitted from supply disruptions due to the Ukraine/Russia crisis.  XGD (Gold Miners) which is an industry sub-group within Materials (XMJ) performed positively, up 1%.

The worst three performers were Consumer Discretionary (XDJ) -6.09%, Materials (XMJ) -4.59%, and Financials (XXJ) -4.31%.  XMJ and XXJ are the two biggest sectors of the market making up about 40% of the ASX, so it's no wonder the XJO was down heavily.

CIMIC which has been in a steep down-trend received a take-over offer which sent its price up >33%.  Nice for those long-suffering investors who held on to Cimic.

New Highs - New Lows Cumulative.

NH-NL Cumulative this week fell clearly below its 10-Day Moving Average.  Until we see a decisive move back above the 10-Day MA, it is best to stay defensive.  This is a good indicator for long-term investors.

Weakness in the NH-NL Cum is confirmed by my weekly Strong-Weak Stocks Cumulative chart.

S-W Cum tends to act a little earlier than NH-NL Cum, but NH-NL Cum has an advantage in being compiled on daily data rather than weekly data.

Bonds versus Stocks.

The Stocks/Bonds Ratio chart shows a small advantage of stocks over bonds this week.  Remember this is a relativity indicator - it doesn't mean that stocks did well - just better than bonds.  But there's not much in it.  The chart finished above zero (stocks doing better than bonds), but below its 10-Day MA, so any advantage for stocks is disappearing

Stocks above key moving averages - last week and this week.

A look at the number of stocks in the ASX100 above key moving averages provides an idea of how bad thins are.

ASX100 stocks above 10-Day MA:  Last week 43%.  This week 38%.

ASX100 stocks above 50-Day MA: Last week 39%.  This week 32%.

ASX100 stocks above the 200-Day MA: Last week 52%.  This week 28%.

Until we see all of these above 50%, it's best to assume we are in bearish conditions.

Conclusion.

Stock markets are faced with several head-winds.  Inflation is on the lips of most analysts.  With Inflation at multi-year highs, it seems inevitable that Central Banks will be raising interest rates.  That's a negative for growth stocks in particular which tend to be highly leveraged.  The market is also faced with the uncertainty of the Ukraine/Russia situation which may be reaching a conclusion, with Russian forces encircling Kyiv.

I'm inclined to remain defensive, having reduced holdings in bonds and stocks this past week.  

Good luck and good investing.

Finspiration Australia. U.S. up strongly for second day.

 Yesterday in Australia.

XJO finished up just +0.1% yesterday.  It now needs to play catch-up after the SP500 was up >2% last night.  That suggests we could see an opening up on Monday of ~2%.  Events in Ukraine will still dominate the news, but the market now seems to be shrugging off the negativity present in the media. 

Overnight.

Dow Jones +2.51%.  SP500 +2.24%.  Nasdaq +1.64%.  Small Caps +2.23%.  Banks +4%.

SP500    

Positive divergence on the CCI has once again pointed to a reversal to the upside in the SP500.

Conditions overall remain bearish.  I'll consider this to be a counter-trend rally while bearish conditions remain.  But - enjoy the upside move while it happens.

Next Federal Reserve meeting is 15-16 March.  A little over two weeks away.  That could be the next big test for markets.

Commodities.

Commodities Index -1.51%.  Energy -1.21%.  Base Metals +0.04%.  Gold -0.33%.

VIX.

VIX (aka Fear Index) has fallen the past two days but remains elevated at 27.59.  It needs to fall below 20 to indicate a return to bullish conditions.

Finspiration Australia. Snap-back rally in the U.S.

 Overnight.

Dow Jones +0.28%.  SP500 +1.5%.  Nasdaq +3.34%.  Small Caps +1.72%. Banks -2.12%.

Nasdaq performed an extra-ordinary feat last night, down about -3% at the opening it finished up >3%.

SP500.

SP500 staged a great rebound last night but remains below major resistance at 4300 (round figures).

The may well be the start of a counter-trend rally, but overall bearish conditions remain.  I'll assume this is nothing more than a counter-trend rally until we see bullish conditions prevail.

Commodities.

Commodities saw a big upside opening bid but sold off during the session.  Commodities Index +0.42%.  Energy +0.29%.  Base Metals +1.81%.  Gold -0.65%.

Iron Ore -0.8%.

We should be positive today but I'm not expecting anything of the magnitude of the Nasdaq.

Finspiration Australia. ASX tumbles.

XJO fell heavily today -2.99%.  

 

At this stage, we just have to hold on and see where this ends.  XJO seems destined to reach the January low.

Today's result was magnified by ex-dividend stocks today.  BHP, the biggest stock in the ASX, fell -6.9% and WPL down -2.7%.  That was actually less than the general market fall, so a good result on the day for WPL.

Travel related stocks performed poorly today after issuing their reports.  Qantas down -5% and Flight Centre down -10.1%.  

Cimic was the surprise result after a take-over offer was announced.  Cimic up +33.4%.

European markets are all well down at this stage.  So there's not a lot of hope yet for a rebound.

Finspiration Australia. U.S. markets continue to slide.

 Overnight.

Dow Jones +1.38%.  SP500 -1.84%.  Nasdaq -2.57%.  Small Caps -1.46%.  Banks -2,52%.

SP500.

SP500 remains bearish on all time frames.

It is now down to the major support level of the January lows.  This becomes a crucial test for the SP500.

Commodities.

Commodities Index +0.94%.  Energy +1.48%.  Base Metals -0.79%.  Gold +0.45%.

Iron Ore +1%.

After 35 minutes of trading, XJO is down 140 points or -1.9%.

BHP went ex-dividend today.  It is the largest stock in the ASX, so that has exaggerated the fall in the XJO today.

Finspiration Australia. XJO rose today.

XJO up today +0.62%

This chart is about as ambiguous as it can be.

The current consolidation is sitting about mid-range of the recent downside movement.

It bounced today off a major horizontal support level.

It remains below the 50 and 200 Day MAs which are in close proximity.

It remains below the Supertrend 1.5,7.

This can go either way.  A break above the 50 & 200 Day MAs should see a solid move to the upside.

The ASX remains in the midst of reporting season.  Reports from major stocks were mixed today.

WOW up +1.4% after reporting an 8% increase in revenue.

Domino's Pizza slumped -14%.

WiseTech Global was up +4.3%.

Overseas markets are generally positive, shrugging off the Ukraine/Russia problem.

Germany currently up more than +1%.

U.K. currently up about +0.6%.

 

Finspiration Australia. Dow Jones falls to a four-week low.

 Overnight.

Dow Jones -1.42%.  SP500 -1.01%.  Nasdaq -1.23%.  Small Caps -1.45%.  Banks -0.14%.

SP500.

Conditions remain bearish on all time frames for the SP500.  

The index is approaching the January lows, we may get some indication around that zone if we are going to get a counter-trend rally.

Commodities.

Commodities Index +1.42%.  Energy +0.95%.  Base Metals +0.42%.  Gold +0.21%.

Energy seems close to exhaustion after gapping up at the opening then selling off intra-day.

Iron Ore -1.6%.

The Australian market opened flat this morning, then oscillated around the zero mark.  In the last few minutes (11.00 a.m. Summer time) it shot up to be up +0.24%.  That's looking promising for further rises.

Finspiration Australia. XJO finished lower today.

 There was no morning report today as we were hamstrung by an internet connection problem.  That has now been resolved.

XJO down heavily today -1%.

XJO has broken below the Supertrend (1.5,7) which is a negative.

It hasn't broken below the 20-Day MA and some intra-day buying is seen in today's candle.

Today in the Australian market, breadth was weak. Advances 289 Declines 1298.  A/D Ratio 0.22.   

This could have been a lot worse if the Ukraine situation is seen as a catalyst for a bear market.  

But, really, today's action wasn't too bad in the scheme of things.  (Think Iraq's invasion of Kuwait.)

There's no doubt that the Ukraine events are bearish, but today's action suggests that they will be absorbed.

It may depend on the Kremlin's next move.  Putin seems to be adopting an incremental strategy where Ukraine is concerned.  He annexed Crimea, now he's sending "peacekeeping troops" into Donbas.

He's a great chess player.  

But ... what's the next move?  Will he focus next on an overwhelming power-play to engulf Ukraine?

  Probably not.  This seems to be following the same game plan which occurred in Georgia in 2008-9.  Take over part of the country and that deters any action by the targeted state to move out of the Russian sphere of influence.

 

Finspiration Australia. Australian market up a little today.

 XJO up +0.16% after being down strongly in the first hour of trading.

We can see the long lower wick on today's candle which indicates strong intra-day buying.

XJO remains within its trading range after bouncing today off the lower support level of the current range.

Despite the intra-day surge, breadth was weak.  Advancing issues 530, declining issues 930.

XJO remains in a state of hiatus.  Not going anywhere in particular.  Wait.

Finspiration Australia. Weekly Wrap, week ended 18/2/22.

    XJO was flat this week.  Bearish conditions remain.

XJO Monthly Chart.

XJO has been in a down-trend since September, 2021.  

In January, the monthly chart showed a sell signal for both the Supertrend (1.5/7) and the 8-Month EMA.

After three weeks of February, the February XJO candle has risen marginally above the 8-Month EMA but not above the Supertrend.   On this chart, XJO is about 20 points above the 8MEMA.  That's not much of a buffer.

If it can hold above the 8-MEMA, the XJO could be OK.  We have one week left in the month.

I'd like to see the Hull Moving Average turn positive (blue dashes change to yellow dashes) before taking action  Wait.

Weekly Chart.

XJO was flat this week, +0.06%.  The long upper wick on this week's candle indicates intra-week selling.  Not a great sign for the market.  It remains below both the 8-Week EMA, the 50-Week MA and Supertrend (1.5,7).  The Hull Moving Average remains negative (blue dashes).  

Daily Chart.

XJO continues to fail at the resistance of the50 and 200 Day MAs which lie in close proximity.  XJO is marginally below the 8-Day EMA.  It remains above the Supertrend (1.5,7) and a major support level.   

Watch for a break one way or the other above resistance or support.

On Friday night, the major American stock market indices were down for the second day in a row.  So we will probably follow suit on Monday.  

Deteriorating conditions in the Ukraine on Saturday will probably unsettle markets further on Monday.

Sector changes this week.

Sector changes this week tell a story of a market afraid of more downside.  XGD (Gold Miners) which is an industry sub-group within Materials (XMJ) performed exceptionally well this week, up more than +9% as we saw a flight to safety in Gold.  

The other best performers this week were all defensives.  Health (XHJ +3.95%, Consumer Staples (XSJ +2.2%) and Property (XPJ +3.04%)

Six sectors were up, while five were down.  Financials (XXJ +0.33%) helped to keep the broad market on an even keel.

We are in the middle of Reporting Season and that is seeing many marked changes in the price of particular stocks this week.  Among big changes in top 20 stocks this week were: Wesfarmers down -4.53%.  CSL up +6.87%.  FMG down -13.05%.  NCM +7.22%.  XERO down -6.91%.  

Ouside the Top 20 but still a blue chip stock, we saw QBE fall -8.48%.

Reporting season can be a hazardous time to be in particular stocks especially when bearish conditions prevail.

New Highs - New Lows Cumulative.

NH-NL Cumulative this week dipped below its 10-Day Moving Average.  Until we see a decisive move back above the 10-Day MA, it is best to stay defensive.

Weakness in the NH-NL Cum is confirmed by my weekly Strong-Weak Stocks Cumulative chart.

S-W Cum tends to act a little earlier than NH-NL Cum, but NH-NL Cum has an advantage in being compiled on daily data rather than weekly data.

Bonds versus Stocks.

The Stocks/Bonds Ratio chart shows a clear advantage of stocks over bonds this week.  Remember this is a relativity indicator - it doesn't mean that stocks did well - just better than bonds.

The chart has reached the upper level of its range set back in November, 2021.  So we can expect a reversion to the mean, where bonds do better relatively than stocks.  Given the bearish conditions that prevail, neither will do particularly well

Stocks above key moving averages - last week and this week.

A look at the number of stocks in the ASX100 above key moving averages provides an idea of how bad thins are.

ASX100 stocks above 10-Day MA:  Last week 49%.  This week 52%.

ASX100 stocks above 50-Day MA: Last week 36%.  This week 39%.

ASX100 stocks above the 200-Day MA: Last week 40%.  This week 43%.

Those are marginal improvements over the course of this week.  Until we see all of these above 50%, it's best to assume we are in bearish conditions.

Conclusion.

Stock markets are faced with several head-winds.  Inflation is on the lips of most analysts.  With Inflation at multi-year highs, it seems inevitable that Central Banks will be raising interest rates.  That's a negative for growth stocks in particular which tend to be highly leveraged.  The market is also faced with the uncertainty of the Ukraine/Russia situation which seemed to ratchet up a notch this week-end.

I'm inclined to reduce holdings in both stocks and bonds, and perhaps take a small position in Gold Miners and the XJO Inverse ETF BEAR.

Good luck and good investing.

Finspiration Australia. U.S. stocks fall to 3-week low. Bonds rise. XJO falls.

 XJO Yesterday.

XJO fell heavily yesterday -1.02%.  It remains in a consolidation pattern below the key moving averages 50 and 200 Day MAs.  Given overnight events, we will probably see a break downwards from the consolidation pattern.  Wait until we can see more bullish conditions apply.  

Overnight.

Dow Jones -0.68%.  SP500 -0.72%.  Nasdaq -1.23%.  Small Caps -0.5%.  Banks -0.43%

20-Year Treasury Bonds +1.05%.

SP500.

Bearish pressure continues on the SP500.  This seems likely to once again test major support from the Sept-Oct Low.  Wait.

Commodities.

Commodities Index +0.39%.  Energy +0.8%.  Base Metals +0.21%.  Gold -0.07%.

VIX.

Vix(27.75) remains stubbornly above the 20 level which is usually taken as the dividing line between bearish and bullish.

Finspiration Australia. U.S. markets fall heavily

 Overnight.

Dow Jones -1.76%.  SP500 -2.12%.  Nasdaq -2.88%.  Small Caps -1.89%.  Banks -3.65%.

SP500.

Sp500 has once again dropped below the 200-Day MA.  Conditions continue to favour the bears.  Wait.

Commodities.

Commodities Index +0.83%.  Energy +1.02%.  Base Metals +0.08%.  Gold +1.37%.

Iron Ore -6.9%

XJO after 30 minutes down -0.82%.

Finspiration Australia. Late selling curtails earlier rises in the XJO.

 XJO finished up +0.16%.

Today, XJO tried to rise above the 5/200 Day Moving Averages.  That failed as last hour selling took down the XJO.  Selling like that at key resistance is bearish.

Until XJO can climb above those two important resistances and the Ichimoku Cloud, it's best to wait.

Selling came in late in the day, around 2.50 p.m. (Eastern Summer Time).  That seemed to coincide with reports about shelling by Ukraine of separatist forces in Eastern Ukraine.  That could provide a pretext for Russia to invade those areas.  Ukraine continues to be an unknown for markets.

Reporting season continues and today saw a couple of negative results which impacted the market.  Wesfarmers (WES) was down -7.5%.  Telstra down -4.2%.  Those are two heavy-weight stocks in the ASX.

NewHighs-NewLows Cumulative still favours a bearish scenario:

While NH-NL Cum stays below its 10-Day Moving Average, it's best for long-term investors to stay defensive.

At the Beijing Winter Olympics, Canada defeated the U.S. for the gold medal in ice hockey.  That may not mean much to Australians, but that rivalry is akin to the Ashes Cricket rivalry between Australia and England.  Disclaimer.  I have an affection for the Canadian team as my two children were born in Canada.  

Finspiration Australia. U.S. markets finish flat.

 Overnight.

Dow Jones -0.16%.  SP500 +0.09%.  Nasdaq -0.11%.  Small Caps +0.26%.  Banks +0.25%.

Major indices were well down for most of the trading session.  A last hour rush to the upside erased most of the earlier losses.

SP500.

Last night's action was better than a big down day, but did little to change the technical picture.  SP500 is stuck around major moving averages (20/200 DMAs) and well below the 50-DMA and the Ichimoku Cloud.  Until it can clear those, this remains a "sell the rallies" scenario.

Commodities.

Commodities Index +0.13%.  Energy -0.51%.  Base Metals +0.72%.  Gold +1.03%.

Iron Ore up +3%.

Overnight Oz Futures were up just three points which equates to no movement 0.00%.

In the U.S. last night, BHP up +1.79% and Rio up +1.85% despite both falling yesterday in Australia.  So the big miners might do well today in Australia.