30/4/23. Weekend Report -Week Ended 14/3523.
The Australian market eased back this week with the XJO down -0.29%. In America, their market was strong. Dow Jones up +0.86%. SP500 +0.87%. Nasdaq +1.88%. Why? Simple. This past week saw some of the big American tech companies report (e.g. META, Amazon, Microsoft, Alphabet). Their reports were received enthusiastically. Australia, unlike America, doesn't have a big tech sector in its market, so we didn't follow the Americans to the upside.
OK - Let's get into it.
Long-Term View. XJO Monthly Chart.
In April,XJO finished up +1.83%.
The index finished above its 8-Month EMA. Hull MA13 is bullish and Supertrend (10/1) is bullish.
RSI is above 50 - bullish.
DZ Stochastic is above its buy line, but turned down just a little.
Double MACD is trending sideways.
On Balance, the XJO finished bullish for the month.
Medium-Term View - XJO Weekly Chart.
XJO lost a little ground in the past two weeks (-0.48% and -0.29% after a strong second week (up +1.98%).
RSI is its 20-Day MA - that's bullish. DZ stochastic remains bullish but into its overbought zone.
The chart finished above its 8-Week EMA. Hull MA13 remains bullish and Supertrend (10,1) is bullish.
Again, the only blemish on the chart is the Double MACD which hasn't had a positive cross-over. It tends to lag bit.
Short-term View - XJO Daily Chart.
The short-term view turned bearish this week. The index was under pressure the previous week when Hull MA13 turned down. This week, the chart finished below its 8-Day EMA, Supertrend turned bearish and Hull MA13 remained bearish.
RSI finished below its 20-Day MA and DZ Stochastic has given a sell signal. Double MACD has had a bearish x-0ver and CCI has closed below its 8-Day EMA.
With both Weekly and Monthly charts both bullish - we are probably looking at a short-term pull-back in the ASX. Wait to see if this turns bullish before re-entry.
Daily Chart with Standard Error Channel.
XJO shows at the bottom edge of the Standard Error Channel. This is a statistical representation of normal distribution of an Index or Stock. As XJO is at the lower edge - we can expect a move back up to the upside. It won't necessarily happen - but the probability is high.
SP500 Daily
SP500 has turned bullish - and that will probably drag the XJO back into bullish territory.
Weekly Changes in Sectors.
This week, ups and downs in the sectors were fairly even with a slight lean to the bearish side.
Four sectors were clearly up, Property +2.07%m Telecommunications Services +1.7%, Information Technology +1.07%, Industrials +0.42%. Financials finished just marginally on the positive side, +0.02%.
Five sectors were clearly down. Materials -1.68%, Utilities -0.95%, Health -0.58%, Energy -0.48%. Discretionary fell marginally on the negative side, -004%.
Financials make up 25.8% of the ASX, Materials make up 23.6%. Almost half the ASX is made up of those two sectors. Extreme weakness in one or the other means the ASX will fall. That happened this week with Materials down -1.68% while Financials was flat.
Sector Momentum.
All three columns sloping up - bullish trend. XIJ, XTJ, XPJ, XNJ.
All three columns sloping down - bearish trend. XMJ, XUJ.
Down then up - counter trend bullish rally. XXJ, XEJ,
Up then down - counter trend bearish pull-back. XDJ, XHJ, XSJ, Gold, Composite Bonds (IAF).
Daily over-bought Momentum shows up in Telecoms - so it may not pay to go chasing strong stocks in that sector (e.g., Telstra).
NewHighs-NewLows.
NH-NL Cumulative is above all its MAs (5,10,21). This is giving it a positive diversion from the ASX chart. That's a positive development and suggests more upside in the XJO.
Stocks/Bonds Ratio.
The past two weeks have favoured bonds over stocks - the ratio chart is falling.
A negative x-over of the 5-Day MA below the 21-Day MA is usually a good sign of a return to bear market conditions. That hasn't happened yet - but could happen if bonds continue to be favoured over stocks.
% of Stocks above key moving averages.
1. % of stocks above 10-Day Moving Average: Last Week 56%, This Week 46%.
2. % of stocks above 50-Day Moving Average, Last Week 65%, This Week 69%.
3. % of stocks above 200-Day Moving Average, Last Week 68%, This Week 61%.
4. % of stocks above Hull MA13, Last week 43%, This Week 42%
We're seeing a mixed picture this week with long-term indicators remain in bullish territory while the shorter term indicators are in bearish territory.
The chart for stocks above the 200-Day MA has fallen back below its 5-Week MA but remains above its mid-line (50%). That's in keeping with the pull-back we've seen so far this past couple of weeks.
Conclusion.
The past two weeks appear to be a pull-back in an on-going bullish market. Watch for a resumption of the short-term upside trend this week. No guarantees, but the probabilities lie to the upside.
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