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   26/3/23.  Weekend Report - The Week That Was.  Week Ended 24/3/23.

XJO Monthly Chart.

We've had over three weeks of trading so far in the Month of March.  So far, the month has been poor, with the XJO down -4.18%.  The index remains below the 8-Month EMA - bearish.

This chart gives very slow signals - as they only take relevance at the end of the month.  But currently, the chart is not looking flash hot.

  

Monthly RSI is at 49.74.  50 represents a dividing line between bullish and bearish.  

XJO Weekly Chart.

                                            

XJO finished the week below its 50-Week MA (equiv. to 250-Day MA), but it held support at the 6900 level (round figures).  That was set in the early days of January this year - so our market has gone nowhere in the ensuing three months.

In the past five days, XJO has fallen -0.57%.   We have now had seven weeks of weekly losses.  This week did show some buying during the week.  (See daily chart below)

Turmoil is largely due to fear about Bank solvency in the U.S. and Europe.

XJO Daily Chart.

This week, the XJO attempted to climb above the 200-Day MA, but retreated on Thursday.  Friday saw plenty of intra-day buying (see long lower wick on Friday's candle) so we may see another attempt at breaking above the 200-Day MA.

XJO remains oversold with an RSI at 35.31.  

Weekly Changes in Sectors.

Sectors were evenly split this week between positive and negative sectors.  Five sectors were positive and five sectors negative with one flat, XHJ.  The best performer was Discretionary +1.2%.  But that performance was smashed in the above chart by Gold Miners, +7.79%.  XGD is not a sector but an industry grouping within Materials (XMJ).  It is a good barometer of fear in the market, as Investors often see Gold (and Gold Miners) as a safe haven in times of turmoil.

The big damage this week was done by Financials -1.89%.  That's not a bad result given the turmoil in overseas markets.

NewHighs-NewLows.

This is a long-term indicator, but a good guide for long-term investors.

NH-NL Cumulative started falling on 9 Feb.  It crossed below its 10-Day MA on 13 February.  Until this (blue line) gets back above its 10-Day MA , its best for long-term investors to stay defensive.

Stocks v Bonds.  Relative performance.

On a relative basis, Bonds are currently outperforming Stocks, i.e., the chart is well below the zero level.  When Bonds are out-performing stocks its a sign to stay defensive.

The 5-Day MA and 21-Day MA provide a reasonable guide to the broad market.  When the 5-Day MA crosses below the 21-Day MA - stay defensive.  When the 5-Day MA crosses above the 21-Day go to offense.  The 5-Day MA crossed below the 21-Day MA on 9 February - sell signal.

The 5-Day MA crossed above the 21-Day MA on the 9 January - buy signal.

Here's the XJO with the cross-over dates pin-pointed:

The Bond Market is dominated almost exclusively by professionals while the Stock Market has a large proportion of retail investors (amateurs). 

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 19%, This Week 28%.  

2.  % of stocks above 50-Day Moving Average, Last Week 30%, This Week 29%.  

3.  % of stocks above 200-Day Moving Average, Last Week 50%, This Week 44%.

Stocks above the 10-Day MA showed a solid improvement this week.  That's often indicative of a possible change in trend.

 

Conclusion.

 

The market has been down for seven weeks in a row.  Market news has been dominated by dismal news among banks, small and large in the U.S. and Europe.

Our market is showing some signs of finding a bottom this week, but we need much more evidence before feeling comfortable about the Stock market.

The Stock/Bonds Ratio Chart might provide timely warning of a reversal to the upside.  So far, however, it is still saying, "Stay Defensive".

Stay Safe.