Finspiration Australia. Weekly Wrap - week ended 4/3/22.

      XJO was up this week - not enough to be long-term bullish.

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.  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 first week of March, the March candle remains 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 positive this week, +1.61%.   It remains below the 8-Week EMA, the 50-Week MA and Supertrend (1.5,7).  The Hull Moving Average remains negative (blue dashes).  

Stay defensive.

Daily Chart.

XJO had a good week this week.  Up four days in a row, but it ran out of puff on Friday.  Friday was not all negative, as strong intra-day buying restricted losses to -0.57%.  Resources had a particularly good week with Materials +8.14% and Energy +8.85%.  But that means the XJO was in an unbalanced state.  Unbalanced markets are easy to knock to the down-side.  That's unlikely to happen on Monday as Energy and Base Metals were both very strong on Friday night.  While the war in Ukraine remains unresolved, we can expect resources to continue doing well.  That might be enough to sustain our market from severe downside pressure and may result in gains.   

The short-term trend remains bullish but up against strong resistance.  Stay defensive - but stock picking might pay off.

Sector changes this week.

Only four sectors were up this week, and one of those (XNJ +0.13%) was essentially flat.  The outsized gains in Energy (XEJ) and Materials (XMJ) are clear in the above chart.

The worst three performers were Consumer Staples (XSJ) --1.64%), Financials (XXJ) -1.52%, and Property (XPJ) -1.77%.  

New Highs - New Lows Cumulative.

NH-NL Cumulative this week remains 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.  It remains below its 5-Week Moving Average.

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.

The dashed line in the above chart is the 20-Day Moving Average.  It shows a distinct down-trend.  Until this down-trend ends, stay defensive.

Bonds versus Stocks.

Despite the positive week in stocks, the Stocks/Bonds Ratio chart shows a small advantage for bonds over stocks at the end of this week.  But there's not much in it.  The chart finished just below zero (bonds doing better than stocks).  That sends a clear message to stay defensive.

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 28%.  This week 38%.

ASX100 stocks above 50-Day MA: Last week 32%.  This week 37%.

ASX100 stocks above the 200-Day MA: Last week 38%.  This week 37%.

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

Conclusion.

Despite the solid gains this week, the Australian market looks weak.  Measures of breadth are all indicating weakness in the broad market, it was only strength mainly in Energy and Mining that resulted in a positive week this week.  While the Ukraine war continues, Energy and Mining are likely to sustain our market, or, at least, prevent severe losses.

While internal measures of breadth remain weak, stay defensive.  

Good luck and good investing.