Finspiration Australia. U.S. equities down heavily.

Overnight.

 Dow Jones -1.56%.  SP500 -1.57%.  Nasdaq -1.54%.  Small Caps -1.04%.  Banks -3.09%.

SP500.

SP500 is in a short-term down-trend.  Let's see if it gets support at the 200-Day MA which is close by.

Commodities.

Commodities Index -1.85%.  Energy -2.62%.  Base Metals -1.26%.  Gold +0.04%.

Iron Ore was flat, down just four cents to $150.84 tonne.

After an hour of trading, XJO has rebounded from early big falls.  It is now down -0.09%.  That's a promising start to the day.

Finspiration Australia. XJO suffers an intra-day reversal.

 XJO finished down today -0.2%, breaking a surge of seven up days.  XJO was up early in the day, but an afternoon reversal cratered the index.

XJO has bad a great run recently so a pull-back is not to be unexpected.  The negative divergence on the CCI has been signalling the possibility of a pull-back.

XJO has plenty of down-side support.  So any pull-back is likely to be bought.

Nine sectors were down today.  The stalwart in the market was Materials, up +1.5%.

Finspiration Australia. U.S. equities down. Tech hard hit.

 Overnight.

Dow Jones -0.19%.  SP500 -0.63%.  Nasdaq -1.21%.  Small Caps -1.84%.  Banks -2.21%.

European stocks also fell, with STOXX600 down -0.4%.

SP500.

Last night's action looks like the start of a pull-back portended by the negative divergence on the CCI.  Traders will look to buy the dip - a likely support is the Ichimkoku Cloud and the 200-Day MA.

Commodities.

Commodities Index +1.8%.  Energy +1.91%.  Base Metals +2.23%.  Gold +0.8%.

Iron Ore +0.4%.

Those good Commodity and IO figures should give Ozzie resources a boost today.

Overnight Oz Futures are up a little, 10 points or +0.1%.

Overnight, BHP was up +3.1% in the U.S. after falling yesterday in Australia just a little -0.08%.

Finspiration Australia. XJO up again today.

XJO up today +0.67%.

XJO is in a strong up-trend.  The question is:  How much longer can this up-trend continue?

Today was the seventh day up in a row.  RSI is now pressing on overbought.  RSI now 69.83.  Overbought is considered above 70.

CCI continues to show a negative divergence.  It is often early, but rarely wrong.

This strong rally is close to an exhaustion point.
 

Finspiration Australia. U.S. equities rise strongly. 30/3/22.

 Overnight.

Dow Jones +0.97%.  SP500 +1.23%.  Nasdaq +1.94%.  Small Caps +2.39%.  Banks +0.9%.

SP500.

SP500 opened with a gap up and continued higher for most of the day.  Ichimoku Indicators are all bullish.

I'm no Elliott Wave expert, but this looks to me like Wave 5 (ending wave) of a five wave impulsive move.

CCI maintains a negative divergence, but RSI still hasn't hit oversold, so there could be more in this yet.

Commodities.

Commodities Index up +0.38% on the back of stronger Energy +1.73%.

Base Metals fell -1.8% but seems to be finding support at the 20-Day MA.  Gold +0.04%, rose intra-day after finding support at the 50-Day MA.

Iron Ore +0.2%.

After 40 minutes of trading this morning, XJO is up +0.7%.  Sector doing best is Information Technology +3.2%.

The market seems to have no concern about the impending interest rate rises.

Finspiration Australia. XJO up six days in a row. 29/3/22

 XJO up today +0.7%.

XJO continues its bullish rally and is clearly in a bullish PRT Zone.

RSI is getting close to overbought and a negative divergence on CCI portends a pull-back in the near future.

XJO is now at a major horizontal resistance level.  It may pause here, but another test of the early January high may be in the offing.

Stocks/Bonds Ratio chart continues to rise to levels not seen for many months.  So a pull-back in stocks is not far off.

Breadth continues to be bullish.

I'm concerned by this chart.  Although bullish, the chart is not particularly strong.  It appears to be in a sideways consolidation, not in keeping with the XJO chart.  That's a concern.

Finspiration Australia. U.S. Equities finish on the positive side again.

 Overnight.

Dow Jones +0.27%.  SP500 +0.71%.  Nasdaq +1.31%.  Small Caps -0.41%.  Banks -1.16%.

SP500.

SP500 continues to push above the 200-DMA and the Ichimoku Cloud.  

Negative divergence on the CCI suggests we're in for a pull-back.  Given the overall bullish character of the SP500, any pull-back is likely to be bought.

Commodities.

Commodities Index -4.34%.  Energy -6.55%.  Base Metals +0.31%.  Gold -1.82%.

Iron Ore -0.1%.

XJO should have another positive day today but the oil producers won't be happy.

Overnight Oz Futures +0.5%.

Yield Curve.

The yield curve is flattening out and likely to invert.  Investors are getting about the same return on a 30-Year Government Bond as a 2-Year return.  

An inverted yield curve often predicts a coming recession.

For a recent analysis of this feature see this article from CNBC:  https://www.cnbc.com/2022/03/28/bond-market-is-flashing-a-warning-sign-that-a-recession-may-be-coming.html

Finspiration Australia. XJO suffers intra-day selling to erase early gains. 28/3/22

 XJO finished flat today +0.08%.

Today's candle is a narrow-range tombstone candle.  Coming at the top of the rally, that suggests we'll see some downside.  XJO has plenty of downside support, so any pull-back is likely to be bought.

Breadth today was poor.  Despite the flat finish, Advances 592, Declines 880.

The market was kept up today by Materials +1.29% and Financials +0.58%.  Given that those two sectors make up about 40% of our market, the rest must have been sick.  Unbalanced markets usually fall to the downside.

Finspiration Australia. Weekly Wrap, week ended 25/3/22.

         XJO up strongly this week.  Is this a return of the Bull?

XJO Monthly Chart.

XJO has been in a down-trend since September, 2021 as indicated by the Hull MA 13 (blue dashes) and the reversal candle which occurred in September.     

In January, the monthly chart gave a long-term sell signal on both the Supertrend (1.5/7) and the 8-Month EMA.  January was brutal for the XJO.  A long standing adage of stock market pundits is:  As goes January, so goes the year.

Now, after the fourth week of March, the March candle is well above the 8-Month EMA but below the Supertrend.   

We have four days of trading left in March.  The 8 Month EMA is usually a reliable indicator of long term trend changes.  I'd like to see confirmation by the Hull Moving Average changing to positive (yellow dashes instead of blue dashes).  Let's be sure that March finishes bullish.

Weekly Chart.

XJO was positive this week, +1.53%, building on the previous week's +3.27%   

The chart is unequivocally bullish.  It has moved above the 8-Week EMA, Supertrend (1.5/7) has flipped to bullish and the Hull Moving Average has also flipped to bullish (yellow dashes)

Daily Chart.

In the past twelve days of trading, since 8 March, XJO has been up more than +6.5%. 

This week it broke above the key moving average 200DMA and continued higher.  

CCI is beginning to show some negative divergence, so a pull-back may be coming soon.  A drop back to test the 200DMA and then bounce would be very bullish.  

Sector changes this week.

Seven sectors were up this week, one flat and three negative.

Resources again dominated the Australian market this week,  Materials +5.53% and Energy +5.13%.  Utilities was the best performer, up +5.67%, but it is a relatively small sector and movements in XUJ are often related to movements in Energy.  With Utilities and Energy both climbing higher, it's no wonder Australian families are feeling it in the hip pocket.

XXJ (Financials) was relatively flat this week, up just 0.1%.

Defensive sectors are seeing a shifty into risk-on sectors.  Telecoms down -0.89%, Health down -2.53%.  Consumer Staples +0.46%, although positive, was one of the weaker sectors this week.  Defensive stocks such as Bear -2.04% and IAF (Composite Bonds) -1.28% complete a picture of switching out of defensives and into risk-on stocks.

New Highs - New Lows Cumulative.

NH-NL Cumulative this week is testing its 10-Day Moving Average.  A positive cross-over appears to be imminent.  This is a good indicator for long-term investors.

Strengthening in the NH-NL Cum is confirmed by my weekly Strong-Weak Stocks Cumulative chart.  It has broken above its 5-Week Moving Average - bullish.

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.  Watch for a break by the NH-NL line above its 10-Day MA.

Advances-Declines Cumulative.

A-D Cumulative has risen above both its 10-Day and 20-Day Moving Averages.  That's a bullish development.  That complements the view from the Weekly XJO chart - and confirms the bullish bias of our market.

Bonds versus Stocks.

At the end of the week, Stocks had a clear advantage over Bonds.  That's consistent with the strong rally we've had the past two weeks.   

This can act as a contrarian signal.  If stocks are acting too strongly compared to bonds, we may see some change in the relativities between stocks and bonds.  The ratio is now the highest it's been since November, 2021.  It can, of course, go higher, but the higher it goes brings it closer to a reversal.  Given the negative divergence on the CCI (see XJO Daily Chart above), we're getting clear messages that we could see a pull-back.

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/good things are.

ASX100 stocks above 10-Day MA:  Last week 81%.  This week 79%.  

ASX100 stocks above 50-Day MA: Last week 59%.  This week 54%.

ASX100 stocks above the 200-Day MA: Last week 41%.  This week 41%.

Despite this week's strong rally the above three data sets are stalling, with evidence of some dipping.  That evidence is stronger when I look at data from stocks positive/negative on the Hull MA13.  Last week, the number of stocks positive on the Hull MA 13 stood at 82%, this week 53%.  So breadth seems to be narrowing.

Conclusion.

We've had two weeks of strong gains.  The weekly and daily charts are unequivocally positive.  Of course, if it's that positive we're likely to see a change in sentiment.  That's already being signalled by contrarian indicators such as the CCI, Stocks/Bonds Ratio and short-term breadth measured by stocks above key moving averages.  Contrarian signals should be taken as warning signals, watch market action for confirmation one way or the other.

Any pull-back is likely to be bought as the XJO is now above the 200-Day MA.

Good luck and good investing.

Finspiration Australia. Friday markets: Australia rose and U.S. Markets mixed.

 Yesterday in Australia.

XJO is in a strong up-trend and seems likely to head to a major horizontal resistance level at 7472.  XJO finished at 7406.  That's only 0.9% higher.  We could make that in one or two days.

A negative divergence is beginning to show up on the CCI which means we can expect a pull-back in the near future.

Overnight.

Dow Jones +0.44%.  SP500 +0.51%.  Nasdaq -0.16%.  Small Caps +0.63%.  Banks +1.53%

SP500.

 

SP500 is also in a strong up-trend and has finally risen above the Ichimoku Cloud.  Next horizontal resistance is at 4580.  SP500 finished at 4530.6.  That's 1.1% away.

CCI is showing a negative divergence so a pull-back is likely in the near future.

Commodities.

Commodities Index +0.74%.  Energy +0.83%.  Base Metals +0.66%.  Gold -0.41%

Commodities Index, Energy and Base Metals all appear to be in consolidation patterns.  Watch which way these break.  I suspect it will be to the downside, trapping a lot of people who are currently long.

Overnight Action in Equities and Commodities is bullish for the Australian market on Monday.

New York Advance-Decline Line.

NY A-D Line is trending to the upside, but appears to be consolidating.  A downside reversal would be bearish.  Watch.

Finspiration Australia. U.S. market up again last night.

Overnight.

 Dow Jones +1.02%.  SP500 +1.43%.  Nasdaq +1.93%.  Small Caps +0.82%.  Banks +0.65%.

SP500.

SP500 is consolidating in the "Cloud", that's no-man's land.  A push higher would be bullish.  A push lower would be bearish.  Wait.

Commodities.

Commodities Index -0.99%.  Energy -1.18%.  Base Metals -2.64%.  Gold +0.73%.

That could be the end for this counter-trend rally in Energy.

Iron Ore. +0.1%.

After an hour of trading this morning, XJO is up about +0.3%.  Despite the fall in Base Metals and a flat Iron Ore price, XMJ (Materials) has been the best performing sector this morning, up about +0.9%.

Finspiration Australia. Oz Market rises modestly after early losses.

 XJO up just +0.12% today.

XJO has now been up nine out of the past eleven days.

Breadth was poor today. Advances 638, Declines 789.  Advances-Declines Cumulative remains positive.

Volatility is dropping off which suggests the current up-trend is likely to continue.

Finspiration Australia. U.S. markets fall overnight.

 Overnight.

Dow Jones -1.29%.  SP500 -1.23%.  Nasdaq -1.32%.  Small Caps -1.83%.  Banks -2.79%.

SP500.

SP500 has failed at the Ichimoku Cloud and fallen back below its key 200-Day MA.  

The short-term trend remains up but may be reverting to the downside.  We may see a moderate pull-back and then another attempt to rise above the 200-Day MA and the Cloud.

Commodities.

Commodities Index +2.48%.  Energy +3.64%.  Base Metals +4.04%.  Gold +1.37%.

Iron Ore +0.3%.

Those good commodity prices should mitigate any falls on our market today.

Finspiration Australia. Another good upside day for the XJO.

 XJO up today +0.5%.

XJO finished marginally above the 200-Day MA but retreated from a minor horizontal resistance level.

All sectors except Materials (XMJ) were up today.  So breadth was good.  Information Technology (XIJ) was up strongly today +3.5%.  That's a good sign that the market is risk-on.

XJO has been up the last seven of ten days.  That's a good run.

I wouldn't be surprised to see consolidation here, but the market is looking bullish.

All sectors except Materials (XMJ) were up today.  So breadth was good.

Finspiration Australia. U.S. markets finish lower.

 Overnight.

Dow Jones -0.58%.  SP500 flat -0.04%.  Nasdaq -0.4%.  Small Caps -0.67%.  Banks -0.52%.

SP500.

SP500 has stalled at the 200-Day MA after four days up last week.  This is a critical point.  Wait.

Commodities.

Commodities continue their counter-trend rally.  Commodities Index +3.74%.  Energy +4.71%.  Base Metals +2.41%.  Gold +0.76%.

Iron Ore -0.7%.

Overnight Oz Futures are up strongly +1.1%.

Finspiration Australia. Intra-day reversal on XJO

 XJO finished down today -0.22% after being up in early trading.

This is "deja vu all over again".  (Yogi Berra).

Here we are at horizontal resistance, and we have a reversal day just like we saw in February.  We need to see a downside candle tomorrow to confirm.

XJO started on the positive side after good results in the U.S. But after 30 minutes of trading it started to fall for most of the day.

Usually, intra-day reversals at the top of a trend are bearish.

Finspiration Australia. Weekly Wrap, week ended 18/3/22.

        XJO up strongly this week.  We may be seeing a bullish trend change.

XJO Monthly Chart.

 

XJO has been in a down-trend since September, 2021 as indicated by the Hull MA 13 (blue dashes) and the reversal candle which occurred in September.     

In January, the monthly chart gave a long-term sell signal on both the Supertrend (1.5/7) and the 8-Month EMA.  January was brutal for the XJO.  A long standing adage of stock market pundits is:  As goes January, so goes the year.

Now, after the third week of March, the March candle is above the 8-Month EMA but 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.

We still have nearly two weeks left in March

Weekly Chart.

XJO was positive this week, +3.27%; the best week since early November, 2020.   It has moved above the 8-Week EMA, Supertrend (1.5/7) has flipped to bullish and the Hull Moving Average has also flipped to bullish (yellow dashes)

As seen in the Daily Chart below, XJO is facing stiff overhead resistance but may now have the momentum to overcome that.

Daily Chart.

XJO is short-term bullish.  It is now close to horizontal resistance and the 200-Day MA.  It failed twice at the 200-Day MA in February.

Some indicators are now into overbought territory, although RSI isn't there yet.  RSI typically reverses around the 60 level in bearish markets.  We are almost there now.  The next few days should be crucial for the XJO's longer term future.

Sector changes this week.

Eight sectors were up this week, two flat and one negative.

Materials (XMJ -1.15%) continued its pull-back this week.  Energy (XEJ +0.04%) finished more or less flat.  XMJ and XEJ, until a couple of weeks ago, were the back-bone of the XJO.  Their pull-back might now be ending.

Best performer this week was Information Technology (XIJ +7.81%), which is an important development as it is a good indicator of risk-on sentiment.  Second best performer was Financials (XXJ +6.07%).  XXJ is the largest sector in the ASX, and often determines the direction of the over-all market.  Banks tend to benefit from rising interest rates as that increases their margins.  So that could sustain further upside.

New Highs - New Lows Cumulative.

NH-NL Cumulative this week remains 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 isn't confirmed by my weekly Strong-Weak Stocks Cumulative chart.  It is sitting at its 5-Week Moving Average - indecisive.

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.

Advances-Declines Cumulative.

A-D Cumulative has risen above both its 10-Day and 20-Day Moving Averages.  That's a bullish development.

Bonds versus Stocks.

At the end of the week, Stocks had a clear advantage over Stocks.  That's consistent with the strong rally we've had this week.   

The rally may have been too strong.

This is an esoteric indicator showing the Rate of Change in IAF (Composite Bonds) and STW (ETF tracking the XJO).  It is often a good indicator of reversion to the mean.  If Stocks swing too far one way compared to Bonds, then we often find switching from Stocks back to Bonds - particularly if Stocks are coming up to a resistance level.

At the most recent low before the current one, that low occurred in 9 February, just as XJO came up to the 200-Day MA resistance level.  We now have a similar situation.  An extremely low level on the chart as the XJO comes up to the 200-Day MA.  Expect some change in the relativities between Bonds and Stocks - favouring Bonds.

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/good things are.

ASX100 stocks above 10-Day MA:  Last week 41%.  This week 81%.  That's into the Over-bought region (above 80)

ASX100 stocks above 50-Day MA: Last week 35%.  This week 59%.

ASX100 stocks above the 200-Day MA: Last week 37%.  This week 41%.

This week's strong rally has had a positive effect on all three measures of strength in the market.  In the short-term it may have been a little too strong.

Conclusion.

Measures of breadth are indecisive.  NH-NL Cum remains negative.  S-W Cum is indecisive.  Advances-Declines Cum is now positive.  

The market is showing some signs of being overbought.  For long-term investors, I'd like to see NH-NL Cum turn positive before committing significant new funds to the market.

Good luck and good investing.