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.