Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 1/11/22.  Morning Report.

Overnight in America, stocks weaken ahead of Fed. decision.

Dow Jones -0.39%.  SP500 -0.75%.  Nasdaq -1.03%.  Small Caps -0.11%.  Banks -0.49%.

SP500.

Today's action shows a narrow-range, inside day - a sure sign of indecision ahead of the Fed. decision.

The pause has come at horizontal resistance - again, a natural place for an indecisive mood.  It will depend on how the market reacts after the Fed. decision, tomorrow night Oz time.

Commodities.

Commodities Index -0.71%.  Energy -1.19%.  Base Metals -2.44%.  Agriculture +1.07%.  Gold -0.82%.

That looks like a bottom is in for Agriculture.

After 90 minutes of trading this morning, XJO is up modestly after opening higher.  XJO +0.3%.

  23/10/22.  Weekly Wrap - Week ended 21/10/22.

XJO Monthly Chart.

XJO continues to hold at support of the 50-Month Moving Average.

It remains in a down-trend, below the 8-Month Exponential Moving Average and below both Supertrend Line.  This down-trend started a year ago.

The average bear market is 289 days - or about nine months.  We're beyond that now - so we could see a rebound soon.  It may have started this week.  A week ago, the monthly candle was blue, this week it has switched to yellow (bullish).

XJO Weekly Chart.

XJO had a good week this week with the index up +1.63%.  The two Supertrend Lines on this chart are opposing colours - one blue, one yellow, i.e., indecision or non-trending.

XJO Daily Chart.

XJO is in a short-term up trend, with both Supertrend Lines bullish.  The chart finished above the 50-Day MA.  A bounce on Monday (likely) should result in a bullish upside move confirming the 50-DMA as support.  Next trip might see a test of the 200-Day MA.

The XJO in three time frames (monthly, weekly, daily) are now out of sync.  Monthly - bearish, weekly - indecisive, daily - bullish.  

SP500 Daily.

SP500 had a big move on Friday night, up +2.46%.  That took the index up above the 50-Day MA after a two-day bull flag.  That should flow on to Australia on Monday.

ASX Sector Results for this week.

It was a good week for the XJO with eight out of eleven sectors up.   The two resource sectors were poor this week, Materials -0.87% and Energy -0.37%.  Best sectors were Property +6.84% and Utilities +5.56%.  

Relative Strength of Sectors.

RSI (Relative Strength Index) is calculated using the default setting of 14 days - almost three weeks of trading.  It provides a more reliable guide to changes in sectors than the one-week results which can jerk around quite a lot and, thus, RSI is probably a more reliable guide to recent strength in the sectors. (Click here for a description of RSI.)

 Seven sectors out of eleven are above the 50 level - that represents a bullish line.  That's a dramatic improvement over the previous week when only two sectors out of eleven were above 50.  Leadership is held by Financials (XXJ) - that's the largest sector in the ASX so that's positive result.

This week saw XXJ move clearly above the 200-DMA - this the line between bullish and bearish - that's a positive development from the largest sector in the ASX.

NewHighs-NewLows Cumulative.

  

This is a metric for the long-term investor.  While NH-NL Cumulative remains below its 10-Day Moving Average, it is best for long term investors to remain cautious and defensive regarding the market.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 35%, This Week 64%.  

2.  % of stocks above 50-Day Moving Average, Last Week 22%, This Week 43%.  

3.  % of stocks above 200-Day Moving Average, Last Week 21%, This Week 33%.  

Those metrics reflect the good rally we saw in the XJO this week.  It would be nice to see No.3 above 40%.  The short-term metric (No.1) is still below oversold - so we can expect more upside.

This week, the long-term metric (stocks above the 200-DMA) broke up above its 5-week moving average.  It is now in an up trend.

Conclusion.

 

Overall, the three time frames for the XJO are out of sync.  Short-term we are bullish - and above the 50-Day MA.

I'm expecting more upside in the near-term.

Coming up this week are a couple of market moving events, both the RBA and Federal Reserve (U.S.) hand down interest rate decisions.

Reporting season in the U.S. and Australia also continues.  Reports from major companies can jerk the market around.

Stay Safe

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 29/10/22.  Morning Report.

Overnight, U.S. stocks surge higher, Apple up >7%.  Commodities fall.

Dow Jones +2.59%.  SP500 +2.46%.  Nasdaq +2.87%.  Small Caps +2.16%.  Banks +1.84%.

SP500.

Friday produced a bullish engulfing candle which took the SP500 above resistance of the 50-Day MA.  Next stop - the Ichimoku Cloud.  Stay with the up-trend until it has clearly ended.

Commodities.

Commodities Index -1.17%.  Energy -1.22%.  Base Metals -2.75%.  Agriculture -0.51%.  Gold -1.02%.

From an Australian perspective, overnight results are a mixed bag.  Clearly, resource stocks will continue to be under threat, while banks and technology stocks might prosper.

Yesterday in Australia.

Yesterday, the XJO suffered a down day, -0.87%.  It was not alone in that with Japan, Shanghai and Hong Kong also falling.

Yesterday's action came back to test the 50-Day MA as support.  Last night's action in the U.S. suggests the ASX could break above the Kumo Cloud which would be a bullish event.

XJO had a weak "buy" signal on 17 October when the Conversion Line crossed above the Base Line of the Ichimoku system.  A break above the Kumo Cloud would strengthen that signal.

Next trip looks like a test of the 200-Day MA.

Bitcoin.

Bitcoin continues to hold above the 50-Day MA and the downtrend line from mid-August.

It is now facing resistance of the Kumo Cloud.

It's recent long consolidation period does, however, appear to be ending.  Look to more upside.

Finspiration Australia. Chart Analysis for Australian and Internatinal Stock Markets.

 28/10/22.  Morning Report.

Overnight:  Mixed results in America with Tech down again.

Dow Jones +0.61%.  SP500 -0.61%.  Nasdaq -1.63%.  Small Caps +0.35%.  Banks 0.00%.

Tech stocks were affected by a plunge in Meta, down -24.6%

SP500.

SP500 has stalled at the 50-Day MA.  Watch for a test of the Supertrend Line (yellow) and the 20-Day MA.

Commodities.

Commodities Index +0.16%.  Energy +0.59%.  Base Metals -0.86%.  Agriculture -0.6%.  Gold -0.15%.

Iron Ore Futures collapsed, down -12.2%.

That's going to affect our big iron ore miners.  At 10.55 a.m., BHP is down -3.42%, Rio down -3.02% and FMG down -5.19%.

XJO down -0.5%.  Financials doing the heavy lifting, up +0.53%.

Bitcoin.

Bitcoin was down modestly overnight -0.39%.  It remains in a bullish profile.

Finspiration Australia. Chart Analysis for the Australian and International Stock Markets.

27/10/22.  Evening Report.

ASX moves higher today.

 XJO finished up +0.5% today and above the 50-Day MA.  This is looking increasingly bullish.

Seven sectors were higher today with one flat.  Energy was the stand-out, up +2.4% with Woodside up +3.2%.  The other large cap doing well today was Newcrest also up +3.2%.

Gold Miners rose +3.7% today and finished above the 50-Day MA with the 20-DMA close to a bullish cross above the 50-Day MA.

Gold Miners might finally be taken on a bullish rally.  The chart pattern is close to completing an inverse head and shoulders bottom pattern.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets. + Bitcoin.

 27/10/22.  Morning Report.

Dow Jones flat, Tech down after strong intra-day selling.

Dow Jones +0.01%.  SP500 -0.74%.  Nasdaq -2.04%.  Small Caps +0.35%.  Banks +0.41%.

META plunged -19% in after-market trading which doesn't augur well for the Nasdaq tonight.

SP500.

SP500 ran into resistance of the 50-Day MA.  Expect a pull-back to the 20-Day MA or the Supertrend Line (7,1.5).

Commodities.

Commodities Index +1.87%.  Energy +2.33%.  Base Metals +3.37%.  Agriculture -0.4%.  Gold +0.64%.

Those good Energy and Metals prices should keep the ASX alive today.

After one hour of trading this morning, XJO up +0.46%.

Bitcoin.

Bitcoin rallied +2.3% overnight adding to the previous gains.  This is looking good for further upside.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 26/10/22.  Evening report.

Post Budget - ASX remains steady.

XJO was up just +0.18%.

The biggest influence on our market day was, not the budget, but reports from stocks both in Australia and overseas.

If anything, the budget was a positive for the share market with fiscal sobriety to the fore.

Overseas last night, the U.S. market was up strongly but aftermarket moves by Alphabet and Microsoft (both down) ameliorated the positive impetus of the U.S. overnight results.  A further drag on our market today was a poor report from Coles which also affected Woolworths, both down about -3%.

Another drag on our market was Medibank Private which suffered from a privacy hack, down -18%.

All the big banks, however, rose moderately which helped to stabilise the ASX.

Eight out of eleven sectors were up today, with one flat - Info Tech (XIJ).  The stand-out performer today was Property (XPJ) up +2.5%.

Tonight in America, META, Facebook's parent, announces results.  That again could be market moving.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets + Bitcoin

 26/10/22.  Morning Report.

American stocks continue to rise.  Alphabet and Microsoft reported after hours.

SP500 +1.07%.  SP500 +1.63%.  Nasdaq +2.25%.  Small Caps +2.32%.  Banks +1.73%.

Alphabet and Microsoft reported after hours and the market responded poorly.  Those closing figures above overstate the current position.

SP500.

SP500 is now testing the 50-Day MA as resistance.  It may now pull back to test the 20-Day MA as support.  

The index is now between a rock and a hard place - Wait.

Commodities.

Commodities Index +0.56%.  Energy +0.87%.  Base Metals -0.44%.  Agriculture -0.3%.  Gold +0.23%.

After 20 minutes of trading, XJO is up +0.4%.  Coles reported before the market opened and is now down -2.53% - taking WOW down with it.  WOW now down -1.4%.  

Bitcoin.

Bitcoin had a sharp rise last night.  It is now above the 50-Day MA and the Supertrend Line has turned bullish.  A cross-over of the 20-DMA above the 50-DMA would provide a "silver cross" - that's a solid medium-term go long signal.

Finspiration Australia. Chart Analysis for Australian and International

 25/10/22.  Evening report.

XJO was up strongly in early trade (up +0.8%) but suffered intra-day selling.

XJO finished up +0.28%.

It remains within its sideways consolidation so the next move is probably to the downside.

Despite the positive finish,  breadth was slightly negative Advance/Declines = 649/749.

We are in reporting season.  Two stocks got slammed today after reporting.  ALD (Ampol) down -12.6%.  Reliance Worldwide -13.4%.  

Energy -1.6% and Materials -1.2% were the only sectors down today.

Tonight in Australia, the new Labor government issues its first budget.

In America, two big companies report, Google and Microsoft.  Those reports are likely to be market moving.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets + Bitcoin

 25/10/22.  Morning Report.

Yesterday In Australia.

XJO was up strongly yesterday +1.54%.  It remains in a sideways consolidation with two yellow Supertrend Lines and one Blue.  Yesterday it hit the 50-Day MA.  Today it has a chance to break out of the sideways consolidation and rise above the 50-DMA.

Last Night in America.

The American market saw follow-through buying after Friday's big surge.  That's always a good sign.

Dow Jones +1.34%.  SP500 +1.19%.  Nasdaq +0.86%.  Small Caps +0.84%.  Banks +1.76%.

SP500.

SP500 gave a triple Supertrend " buy" signal on Friday.  That has followed with a bullish Heiken Ashi candle on Monday.  This looks set to test the 50-Day MA.

Commodities.

Commodities Index +0.28%.  Energy +0.91%.  Base Metals -0.82%.  Agriculture -0.35%.  Gold -0.32%.

After 15 minutes of trading this morning, XJO is up +0.6%.  That could be the high for the day.

Bitcoin.

Bitcoin remains below three bearish Supertrend lines (blue).  I'd wait till I see more positive action.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 23/10/22.  Weekly Wrap - Week ended 21/10/22.

XJO Monthly Chart.

XJO continues to hold at support of the 50-Month Moving Average.

It remains in a down-trend, below the 8-Month Exponential Moving Average and below the Supertrend Line (7.1.5).  This down-trend started a year ago.

The average bear market is 289 days - or about nine months.  We're beyond that now - so we could see a rebound soon.  But - you know what they say about averages?  

Plans based on the assumption that average conditions will occur are wrong on average. A humorous example involves the statistician who drowned while fording a river that was, on average, only three feet deep.

Only take action on this chart at the end of the month - one week to go.

XJO Weekly Chart.

In this chart we can see the importance of the 200-Week Moving Average.  It's been support since mid-June this year.  There's been a nice tradable rally since then, but XJO has been revisiting that level for the past 5 weeks without breaking decisively below.

Resistance is being provided by the weekly Supertrend Line (7,1.5).  A break above that would be bullish.

XJO Daily Chart.

XJO in the short-term remains in a sideways consolidation pattern.

It remains in a down-trend (lower highs and lower lows).

If it can get above the 50-Day MA (likely next week) we could see a test of the 200-Day MA.

For now, monthly, weekly, and daily charts are in sync - bearish.

Dow Jones Industrial Average Daily.

Dow Jones has formed a double bottom - usually a reliable precursor to a sustainable rally.

The chart is now finding resistance at the 50-Day MA.  A break above that would be bullish and should see a test of the 200-Day MA.

On Friday night, Dow Jones was up +2.47% - and the ASX should follow suit - but not of the same magnitude.

ASX Sector Results for this week.

It was a poor week for the XJO which was down -1.21%.  Only one sector was up - Energy +1.58%.  Worst were Utilities -3.39%, Materials -2.99% and Health -2.97%.   Financials was flat 0.00%. 

Relative Strength of Sectors.

RSI (Relative Strength Index) is calculated using the default setting of 14 days - almost three weeks of trading.  It provides a more reliable guide to changes in sectors than the one-week results which can jerk around quite a lot and, thus, RSI is probably a more reliable guide to recent strength in the sectors. (Click here for a description of RSI.)

 Two sectors out of eleven are above 50.  The previous week we saw four sectors above 50 - so breadth is wearing.    Leadership is shared by Energy and Financials - the only two sectors above 50.

NewHighs-NewLows Cumulative.

  

This is a metric for the long-term investor.  While NH-NL Cumulative remains below its 10-Day Moving Average, it is best for long term investors to remain cautious and defensive regarding the market.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 54%, This Week 35%.  

2.  % of stocks above 50-Day Moving Average, Last Week 27%, This Week 22%.  

3.  % of stocks above 200-Day Moving Average, Last Week 29%, This Week 21%.  

Those three metrics remain bearish.

The long term metric (% Stocks below 200-Day MA) remains bearish.  It is sitting at its 5-Week MA which it was above last week.  The chart remains above the low of three weeks ago.  That's promising. I'd like to see this above at least 40% before feeling comfortable.

Conclusion.

 

Overall, our market remains bearish, but we may be seeing a nascent counter-trend rally.

Remember that bear markets tend to reverse quickly.  Just because the market is bearish doesn't mean it can't change to the upside in the blink of an eye.  The stock market tends to be forward thinking - and can reverse when everything looks bleak.  While the Federal Reserve keeps chanting their mantra of higher rates, that is capturing the thinking of many investors.  Irristible forces in the stock market might have other ideas.

I'll leave you with the same thought I gave you last week.

Interestingly, the stock market in 2022 has generally followed the downward path typical for a midterm election year since 1962, according to Dan Clifton at Strategas. The S&P 500 is down slightly more than the typical 19% intra-year decline, but the news improves if stocks stick to the script. Stocks have historically bottomed in October and rallied by an average of almost 32% in the next twelve months. Clifton notes that stocks have been positive in the year after every midterm election since 1942!

Stay Safe.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets + Bitcoin

 20/10/22. Overnight in America:  Bond yields up, stocks go down.

Dow Jones -0.33%.  SP500 -0.67%.  Nasdaq -0.85%.  Small Caps -1.51%.  Banks -3.6%.

SP500.

SP500 has dipped to test the 20-Day MA as support.  It has previously acted as resistance.

If that support holds, we should see a major counter trend rally.

Commodities.

Commodities Index flat -0.04%.  Energy +0.25%.  Base Metals +0.39%.  Agriculture -0.2%.  Gold -1.34%.

After 90 minutes of trading this morning, XJO is down -0.8% and searching for a bottom of the current fall.

Bitcoin.

Bitcoin remains bearish and currently in a sideways consolidation zone.  Wait.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 19/10/22.  XJO up modestly today.

XJO was up +0.31% today.  It has stalled at an important horizontal support/resistance line where it has paused or reversed several times in the past couple of months.

I see no reason to suspect any difference going forward.

The chart is in a short-term up-trend, but still well below the 200-Day MA - the line between bull/bear markets.

The difference between NH-NL has improved but still favouring New Lows.

Until we can see a clear advantage for New Highs over New Lows - long term investors should remain cautious and defensive.

Stay Safe.