1/8/23. Tuesday Morning Finspiration Report.

 RBA rate decision later today.

After an hour's trading this morning, XJO has held in a narrow range and is up about +0.25%.  The range was set in the first thirty minutes of trading:  high 7440.3, low 7410.4.  A breakout of that range should see further rises or falls - depending on direction.

Best sectors are in the resources:  Materials +1.44%, Energy +0.91%.

Overnight in the U.S., major indices were up modestly.  Dow Jones +0.29%, SP500 +0.15%, Nasdaq +0.21%.

Chart for the SP500:

 SP500 remains in its long-term up-trend, but divergences on indicators suggest a pull-back is not far away.

Stay with the trend until clear weakness is seen in the chart.

Commities:  Energy +0.86%.  Base Metals +2.51%.  Gold was up +0.27% but showed intra-day selling.  Gold remains in a short-term down-trend.

From an Australian perspective, those good Energy and Base Metals are driving the Oz market today.

 

31/7/23. Monday Evening Finspiration Report.

 ASX started off well today but petered out as the day progressed.  XJO finished flat, up just +0.09%.  Energy was flat +0.00%.  Financials flat +0.02%.  Materials up a little +0.1%.

Best sector was Health, up 0.63%.   Worst sector was Staples -0.75%.

Here's the chart for STW, that's a tracking ETF for the XJO:

The chart remains in an up-trend but showing a lot of indecision with today's candle a "spinner".  Long wicks above a small body - that's indecisive - neither bulls nor bears winning the battle today.

Dynamic Zone Stochastic broke a little below its upper band today which suggests more downside. 

European Stocks in early trading are up a little, Euro Stoxx600 up just +0.09%,  Dow Futures up a little +0.07%.  Not much movement so far in overseas markets.

Tomorrow we head into August which historically been flat, average up +0.18%.  That, of course, leads into the worst month of the year - September.  So we can't expect much joy in the next couple of months - unless Central Banks decide to do a back-flip on interest rates.

30/7/23. Weekly Finspiration Report.

 

XJO Daily Chart.

 

On Thursday, XJO broke clearly above resistance.  Friday was a wide-range day with intra-day testing of the old resistance level - which has now become support.

XJO was up +1.23% for the week.  A good result for the week.  That upside surge looked shaky on Friday, but it held above support.

Weekly XJO Chart.

The old resistance level, broken to the upside on Thursday, had plenty of history going back to 2022.  Now that it's been broken, I'll be looking for a test of resistance at 7565.  XJO finished on Friday at 7404.  That's about +2.2% upside.   No guaranteed - it's just indicating a possibility.  A break below support (old Resistance level) and all upside bets are off.

How is the American SP500 doing?

January, 2023 was a strong month for the SP500, and it traded within that range until May, 2023.  Since then it has gone up an equal amount.  The range from March to May is about equal to the range from May to July.  That suggests that the current rally could be coming to an end. 

 

Below is a weekly chart of SPX with an Andrews' Pitchfork overlay.

 

SP500 has been in a strong up-trend from mid-March to the end of July.  SPX has been finding resistance at the Median Line of the Andrews' Pitchfork.  The short-term possibilities lie to the downside in an longer term up-trend.

I

should note that the ASX hasn't broken to the upside of its January range and is currently at an important Fibonacci resistance level.  The range from mid-March to mid-April is also more or less equal to the range from early July to the end of July.

So the hypothesis above that XJO might test horizontal resistance at 7565 is looking shaky.

Sector Performance this past week.

The strong result for the XJO was broad based, with ten out of eleven sectors providing positive results.  The only negative sector was Staples -0.32%.  That's a defensive sector.  The other two defensive sectors Utilities and Health.  Both were positive but relatively weaker than other sectors.  XUJ +0.82% and Health +0.52%.

 

The best three sectors were Energy +3.42%, Information Technology +2.96% and Telecommunications +2.91%. 

 

XGD (Gold Miners) which is an industry group within XMJ fell again -1.37% after falling the previous week.  Savvy traders using Technical Analysis can make good money in the Gold Miners, but it is not for the faint hearted.

The same can be said for XIJ (Information Technology) which did well this week.

From its low in June 2022, XIJ has been up 55%.  So it's had a great run for over a year.

NewHighs-NewLows Cumulative.

 

 

NH-NL Cum bottomed at the beginning of July and is now in an ABCD bullish rally.  Longer term investors should remain invested while the chart is above its 10-Day MA

 

This is my favoured chart for getting into and out of the market.  This is not for day-trading or swing trading, but more for position trading.  It does tend to lag, but is fairly good at showing the swings in the market for longer term traders.

 

% of 100 Leader Stocks above 200/50/10 Day Moving Averages.

% of Stocks above the 200-Day MA:  Last week 62%, this week 68%. 

% of Stocks above the 50-Day MA: Last week 60%, this week 75%. 

% of Stocks above the 10-Day MA: Last week 60%, this week 73%.  

 

% of Stocks positive on the Hull MA13:  Last week 45%, this week 76%.

Internals are strong and pushing up close to the 80% mark (but not the Stocks above 200DMA).

It woouldn't take much to push the market into reverse from these levels.

Conclusion.

 

XJO has had a good run-up into the end of July.  It might be looking at the end of that run looking at ranges and Fibonacci retracement levels.

Stay with the trend until we see definite signs of weakness.

 

29/7/23. Saturday Finspiration Report.

 Yesterday in Australia, ASX was down heavily, XJO down -0.7%.  Overnight Oz Futures up +0.26%

XJO had a wide-range day on Friday, with evidence of intra-day buying (long lower wick on Friday's candle).  The intra-day buying bounced off horizontal support plus the Ichimokue Conversion Line and the Supertrend Line.  Powerful triple support.  Overnight Futures suggest the rebound will continue on Monday.

   Overnight in the U.S., Dow Jones went on its winning ways, up +0.5%.

 Friday night's candle was an "inside day" - completely within the range of the previous day.  That indicates indecision.  Plenty of support exists below the current set-up, so, at this stage, I'll presume that any pull-back will be bought.

27/7/23. Thursday Evening Finspiration Report.

 XJO up strongly today, +0.73%.  Why?  Beats me - tune in to the ABC tonight - Alan Kohler usually has all the answers. 

 

The trend is up - stay with the trend until otherwise indicated.

Nine out of eleven sectors were up today.  The only negatives were the resources, Materials -1.04% and Energy -0.53%.

The best was Property - a whopping big +3.33%. and therein probably lies the answer to my Why?  Property is an interest rate sensitive sector, so the market seems to think interest rates are on hold or going to go down.  (Until tomorrow that is.  The market is a fickle beast.)

Tech stocks were second best - XIJ up +2.19%.

NH-NL Cumulative.

This is my favourite chart for staying in the market.  While it remains above the 10-Day MA - stay long.

The big question now is:  What will the Dow do tonight.  14 in a row?  Dow Futures are currently up +0.16%.  So that's saying:  Probably.

Good luck.

27/7/23. Thursday Morning Finspiration Report.27/7/23,

 After 30 minutes of trading this morning, XJO is up +0.5%.  Reporting season in Australia is in full swing.  Notable this morning were Macquarie Bank and Rio Tinto.  Both are on the downside, MQG -4.4% and RIO -2%.

Overnight in the U.S., Federal Reserve raised interest rates +0.25% (as expected).  For the stock market it was a non-event.  At the time of the announcement the SP500 jerked higher but then settled back to where it was.

Dow Jones up for the 13th day in a row.  That's the best since 1987 - and we all know what happened that year.  If it is up for 14 days in a row - best since 1897 - that's the year the Great Depression of 1893-97 ended.  Draw your own conclusions, good or bad.

Overnight in the U.S.

Dow Jones +0.23%.  SP500 -0.02%.  Nasdaq -0.12%.  Mid Caps +0.5%.  Small Caps +0.69%.  Banks +1.88%.

Dow Jones is seriously overbought (no surprise) with an RSI at 75.2. 

SP500.

 

SP500 remains in consolidation.  The trend remains up - stay with it until otherwise indicated.

Since the low of mid-March, SP500 is up +19.9%.  During the same time, Australian XJO is up +7.3%. 

Commodities.

 Commodities Index -0.49%.  Energy -0.04%.  Base Metals -0.69%.  Agriculture -0.22%.  Gold continues its rebound off the 50-Day MA, +0.49%.

26/7/23. Wednesday Evening Finspiration Report.

 XJO finished well up today after lower than expected inflation figures came out at 11.30 a.m.  XJO finished up +0.85%.

XJO broke above an important horizontal resistance level today where it has failed on several recent attempts.

NewHighs-NewLows Cumulative.

This chart remains above its 10-Day MA.  This is a good guide for medium to long term investors.

Looking at the tea leaves suggests this move to the upside may not have too far to go.

A negative divergence is forming on the NH/(NH+NL),  That's had a good record of predicting changes in trend.

XJO/IAF is shown in the lower panel.  IAF is the ETF for Composite Government Bonds.

A divergence in XJO/IAF often precedes a change in the XJO.  Currently there's a negative divergence on XJO/IAF.  Watch for a fall in the XJO.

26/7/23. Wednesday Morning Finspiration Report.

 This morning after one hour of trading, XJO is up modestly +0.25%.  Trading is jerky ahead of the inflation data out later today.  Miners are leading again.  Lithium miners are rebounding from their sell-off and iron ore miners are also doing well.  The market remains unbalanced with three sectors up and eight down.

Overnight in the U.S., the Dow was up for its 12th day in a row.

 Dow Jones only just made it into positive territory +0.08%.  SP500 +0.28%.  Nasdaq +0.61%.  Mid Caps +0.19%.  Small Caps -0.07%.  Banks -1.61%.

The recent rise of the Dow has seen rotation out of Tech. and into Industrials.  That now seems to be switching the other way with the Nasdaq now taking over leadership.

SP500.

 

SP500 is in a short-term consolidation.  The trend remains up.  Stay with the trend.

Commodities.

 Commodities Index +0.37%.  Energy +0.28%.  Base Metals +2.18%.  Agriculture +0.04%.  Golda +0.56%.

CCI on the Energy (DBE) shows a clear negative divergence suggesting that the Energy market will fall.

Inflation figures due at 11.30 a.m.  XJO jumped at the news and is now up +0.7% (11.50),  Seven out of eleven sectors are now up.  Healthy.  Looks like the RBA will be on hold at its meeting next week.

25/7/23. Tuesday Evening Finspiration Report.

 XJO up moderately +0.46, breadth was poor.

 XJO remains in consolidation.

Three indices up today (XMJ, XEJ, XTJ) and one flat XNJ +0.03%.  That's not the picture of a healthy market.

 

25/7/23. Tuesday Morning Finspiration Report.

 Dow up 11 days in a row.  Best run in six years.  

Dow Jones +0.52%.  SP500 +0.4%.  Nasdaq +0.19%.  Mid Caps +0.11%.  Small Caps +0.61%.  Banks +1.71%.

SP500.

 SP500 is a broader market index than the Dow Jones which contains only 30 stocks.

SP500 is currently in consolidation and the trend may continue to the upside.  

The trend remains up - enjoy it will it continues.  Prepare for a pull-back.

Commodities.

Commodities Index +1.79%.  Energy +1.88%.  Base Metals +0.71%.  Agriculture +1.54%.  Gold -0.43%.

Strong commodity prices will sustain the ASX today.  

 

24/7/23. Monday Evening Finspiration Report.

 XJO  down marginally today. -0.1%.  Woodside at record high, up +2.34%.

The chart now shows a cluster of doji candlesticks at the top of the trend.

Hull MA13 has turned down.  That's the shortest term MA that I use.  It's about equal to a 5-Day MA.

No other indicators have turned down yet - but it only seems a matter of time.

Here's the chart for Woodside:

Woodside had a very strong day taking it up to an all-time high.  All-time highs usually get followed by more upside.

While Woodside was going higher, Lithium stocks were slaughtered.  Core Lithium was down more than -17%.  That took other Lithium stocks down, e.g., Latin Resources -13.8%, Sayona -11.8%.

Energy pushed up by Woodside was the best sector today +2.2%.  But Materials balanced that out with a fall of -1.41%.  BHP down -1.51%.

23/7/23. Weekly Finspiration Report

 

From Market Index: 

• Every US bear market of the past 73 years ended when the S&P 500 retook and held above its 200-day moving average for at least 18 days, according to Sentiment Trader.

  • As of 19th July, the S&P 500 has been above the 200-DMA since 23 March (that’s around 80 trading days ago). 

• “Whenever this phenomenon has occurred, the market always rallied over the next three, six, and 12 months, with average 12-month returns of about 20%,” writes InvestorPlace.

 

XJO Daily Chart.

 

On Thursday, XJO printed a very tall Gravestone Doji Candlestick.  That's a bearish signal.  It came at a major horizontal resistance, which gives the signal added significance.  XJO retreated a little on Friday, down -0.15%.  The Index can expect more downside.  Watch for a break by the Dynamic Stochastic below its upper band to signal more downside.

Horizontal support exists at 7279.  XJO finished at 7314 on Friday.  So that first level of support is not far away.  If that fails, the next level of support seems to be the Kumo Cloud.  That's a dynamic support level but currently sits around 7234.  That is also not far away but could provide support - watch what happens around that level.

XJO was up +0.15% for the week.  Basically flat.

How is the American SP500 doing?

SPX has been doing much better than the Australian XJO.  

 

Below is a weekly chart of SPX with an Andrews' Pitchfork overlay.

SPX has been finding resistance at the Median Line of the Andrews' Pitchfork.  The possibilities lie to the downside.

Dynamic Zone Stochastic is showing a negative divergence and has fallen below its upper-band which reinforces the view that SPX will probably break to the downside.

 

The chart shows the 40-Week Moving Average which is equivalent to the 200-Day Moving Average referenced in the Introduction above.  That gives us a long-term bullish picture.

Below is a Daily Chart for SPX with a Standard Error Channel overlay.  The Channel starts at the major low of October, 2022.

The daily chart of SPX is now at the top of the Standard Error Channel.  Expect a pullback.  

The narrow range Doji Candlestick on Wednesday, coming at the top of a rally, probably indicated the end of the rally, at least in the short-term.

Sector Performance this past week.

XXJ (Financials) was the best performing sector, up +2.68% followed by XEJ (Energy) +1.16% and XHJ (Health) +1.14%.  

 

XGD (Gold Miners) which is an industry group within XMJ fell heavily -6.49% after rising the previous week a massive +9.84%.  Savvy traders using Technical Analysis can make good money in the Gold Miners, but it is not for the faint hearted.

The same can be said for XIJ (Inormation Technology) which was the worst performing Sector, down -2.45%.  XIJ fell heavily on Friday, down -2.73%, wiping out all of the previous four days' gains.  The quality of the fall in XIJ on Friday suggests that its up-trend has finished for the time being.

From its low in June 2022, XIJ has been up 55%.  So it's had a great run for over a year.

52-Day Mansfield Relative Strength.

 

The best performing Sector over the past 52 Days have been XIJ (Information Technology), but, as I mentioned above, its run may have ended.  Look to XXJ (Financials) to take over market leadership.

Here's the daily chart for XXJ with a possible scenario:

 

NewHighs-NewLows Cumulative.

 

 

NH-NL Cum bottomed at the beginning of July and is now in an ABCD bullish rally.  Longer term investors should remain invested while the chart is above its 10-Day MA.

 

%100 Leader Stocks above 200/50/10 Day Moving Averages.

% of Stocks above the 200-Day MA:  Last week 461%, this week 62%. 

% of Stocks above the 50-Day MA: Last week 67%, this week 60%. 

% of Stocks above the 10-Day MA: Last week 81%, this week 60%.  

 

% of Stocks positive on the Hull MA13:  Last week 67%, this week 45%.

Internals have weakened this week while the XJO made a small advance.

Conclusion.

 

XJO is at a major inflection point with a bearish tomb-stone doji candlestick appearing on Thursday right at a major horizontal resistance zone.  This may provide a buy-the-dip opportunity. 

SP500 may also be at an inflection point with the Index sitting at the median line of its Andrews' Pitchfork.

I am confident of a pull-back here which will likely be bought leading to another strong up-leg.  

Remember that September is historically a weak month.

 

22/7/23. Saturday Finspiration Report.

 Dow Jones only just made a positive session, +0.01%, but, up for 10 days in a row.  Best run since 2017.  SP500 just positive, Nasdaq down.

 Dow Jones +0.01%.  SP500 +0.03%.  Nasdaq -0.22%.  Mid Caps -0.22%.  Small Caps -0.33%.  Banks -0.97%.

SP500.

 SP500 remains in an uptrend but pulling back a little.  More downside is likely - with solid support at 4462.  SP500 finished this session are 4536.  So, about another 74 points downside seems likely.  That's only -1.6% from the current level.

Commodities.

Commodities Index +0.54%.  Energy +1.36%.  Base Metals saw plenty of intra-day buying, finished up +0.16%.  Agriculture -0.18%.  Gold -0.31%.

Gold has pulled back to the 50-Day MA - look for a bounce off that line.

ASX Futures are up +0.4%, so it looks like the Oz market will open on the high side on Monday off the back of improving resources.
 

21/7/23. Friday Morning Finspiration Report.

 Dow Jones is indestructible - up for nine days in a row.  Nasdaq crumbles. Commodities up modestly.

Dow Jones +0.47%.  SP500 -0.68%.  Nasdaq -2.05%.  Mid Caps -0.52%.  Small Caps -0.79%.  Banks +0.69%.

SP500

This is the pull-back the market had to have - but Dow Jones didn't get the memo.

SPX remains in an up-trend.  The chart remains bullish - look to buy the dip.

Commodities.

Commodities Index +0.29%.  Energy +0.64%.  Base Metals +0.22%.  Agriculture +0.23%.  Gold -0.51%.

After fifteen minutes of trading, XJO is down -0.37%.  Health and Staples (defensives) are doing best while Information Technology is following the Nasdaq down.  XIJ -1.75%.
 
 

20/7/23. Thursday Evening Finspiration Report.

Big intra-day sell-off on the ASX today - probable end of the up-trend.

And now, for some reason I cannot fathom - I cannot load any charts to my blog.  Which means that any moment I shall throw my iMac through the window.  hmmm.  Settle down petal.

Today's candle, if you could see it, is a huge pipe-stack.  Or maybe, also described as a hypodemic needle.

It means that at the beginning of the day the XJO shot way up high, then spent the rest of the day going back to where it started.  Not a good sign.

That also occurred at horizontal resistance.  Not a good sign.

And it also occurred at the top of a lovely up-trend.  Another not good sign.

I guess you've got it now.  The market is going to go down.

Given that the Dow Jones has been up eight days in a row and its RSI is suffering vertigo from being up in the stratosphere (i.e., above 70) and you can conclude that the XJO is pre-empting a sell-off tonight in America.

Anyhow - that's how I see it.

And I still can't load a chart.  Damn.

 

20/7/23. Thursday Morning Finspiration Report

 Dow Jones up again - eight days in a row.

Dow Jones +0.31%.  SP500 +0.24%.  Nasdaq +0.03%.  Mid Caps +0.36%.  Small Caps +0.59%.  Another big day for the Banks +2.62%.

Intra-day selling is evident in today's candle for the Dow, so bears are becoming active in the market.

SP500.

 

SP500 remains in a strong up-trend.  

RSI is at 75 which is a bit too stretched to the upside.  Of course, it can go higher.

Plenty of support lies nearby - so any pull-back is likely to be bought.

Commodities.

 Commodities Index +0.55%.  Energy +0.08%.  Base Metals -0.49%.  Agriculture +1.2%.  Gold +0.02%.

XJO this morning, at 10.45, is up strongly, +0.73%.

 

19/7/23. Wednesday Finspiration Report.

 ASX had another good day today.  XJO up +0.55%.

XJO continued its bullish rally today after two days of consolidation.

The index how has a higher high and a higher low - the definition of an up-trend.

XJO finished at 7323.7 today.  That's not far off a major horizontal resistance line at 7367.2.  That could cause the Index some difficulties.

Nine out of eleven sectors were up today, but one of the negative sectors was XMJ (Materials) down -0.56%.  That was more than balanced by the four big banks which were all up more than +1% today.

In early trading in Europe, UK FTSE is up +1.53% after inflation came in lower than expected.  Dow Futures are up +0.19%.

Let's see what tomorrow brings.

19/7/23. Wednesday Morning Finspiration Report.

 Unbelievable, Dow Jones up seven days in a row.  And, banks are going berserk.  (Did someone mention recession?  Daft fool.  It's Earning Season!  Let's party.)

Dow Jones +1/05%.  SP500 +0.71%.  Nasdaq +0.76%.  Mid Caps +0.94%.  Small Caps +1.4%.  Banks +3.03%.

SP500.

 

Blue skies above.  Nothing to worry about here.  Ignore the negative divergence on the CCI.  Ignore the RSI overbought at 74.  Ignore that big candle in the last session that went up on low, low volume.

Just buy, buy, buy.  (Not.)

Commodities.

Commodities Index +1.32%.  Energy +1.42%.  Base Metals -1.08%.  Agriculture +1.4%.  Gold +1.15%.

XJO today, after 45 mins. of trading, is up +0.68%.  Enjoy the party - don't worry about the coming hangover.