1/10/23. Weekly Finspiration Report.

 September was crook.  XJO down -3.5% for the month.  September is usually down, so nothing unusual there.  Only - it was unusual, unusually bad.  September averages about -1% down, so it was much worse than usual.

What about October?  October gets a bad rap for big, big declines.  Nobody who lived through it can forget 19 October, 1987 when the Dow Jones dropped 22.6%, in one day.   But - that's the exception to the rule, O is usually up about +1%.  So we've got September behind us.  we can look forward to better times.

XJO Monthly Chart 

 

I've been banging on about this for a long time, the monthly chart of XJO has been range bound since Nov. 2022 - no trend.  That's coming up towards a year.  Rarely do we see such a long-term range bound market. 

The range is conveniently marked by two Supertrend Lines.  Supertrend 2/11 1s the upper limit and it sits at 7554.  The lower limit is Supertrend 1/10 which sits at 6922.

History shows we are coming into the best six months of the year, so this current long-term sideways consolidation is likely to break to the upside.

This week, the RBA meets for its Interest Rate decision.  That could be market moving.  I doubt it will be enough to result in a break in the market through the restraining Supertrend,

XJO Weekly Chart.  

This week, the ASX fell modestly, down -0.29%.  A welcome reprieve from the volatility of the previous week.

Horizontal support held which is a big positive.

XJO Daily Chart.

 Horizontal support is shown by the dotted line from early July.  That held this week after being tested.  Friday saw a move to the upside which is a positive.

Positive divergence onMACD Histogram suggests the next major move will be to the upside.

Sector Performances this week.

Best performing sector this week was Energy +1.98%.  Financials were flat +0.07%.  Financials are the largest sector in the ASX and that helped to keep falls in the broad market relatively small this week.

Defensives did realtively well.  Health +0.15%, Staples +0.22%.  Telecommunications -0.12%.

The worst performer was IT -1.45%.  Over the long term, IT tends to be a strong performer but jerks around a lot.  If we're looking at better times ahead, I'd expect IT to out-perform.

Property -1.26% was the next worst performer.  It is currently a basket case.  Since late August, XPJ has lost -9.13%.  An easing of interest rates would do wonders for XPJ but that may be a long wait.

 

100 Leader Stocks above their 200-Day, 50-Day and 10-Day Moving Averages.

• Above their 200-DMA:  last week 37%, this week 36%.
• Above their 50-DMA:  last week 25%, this week 27%
• Above their 10-DMA:  last week 24%, this week 30%.

The Stocks above 50DMA are at 27% - we don't often see figures that low without a rebound coming soon.

The last time was in late June and early July. 

SP500 - American Market.

Here's the SP500 Chart:

DZ Stochastic has crossed above its lower Band, which provides a "buy" signal.  It's fairly reliable as seen back on mid-August.  When occurring with other indicators, that adds strength to the signal.  MACD Histogram shows a +ve Divergence to price, giving added weight to the DZ Stochastic "buy" signal.
 

Conclusion.

September was, predictably, poor - but worse than usual.

We're coming into October, usually a better month than September.  There are plenty of signs to suggest that the worst may now be past and we could be looking at some upside from here.

Good Luck

Be aware that there are no guarantees on the stock market.  The old adage must be remembered:  past performance is no guarantee of future performance.

If the market breaks decisively below support - then all bets are off.

30/9/23. Saturday Finspiration Report.

 ASX up moderately yesterday, while overnight the U.S. was ambivalent, Dow down, Nasdaq up.

XJO CHART     

Yesterday, XJO broke a three-day losing streak, up modestly +0.34%.

In the longer time frame, XJO seems to have completed an ABCD down trend with a positive divergence showing on the MACD Histogram. The ABCD pattern has taken two months to evolve.  In those two months, XJO has fallen -6.25%.

This looks like the end of the two-month down-trend.

Materials +1.22% was the best performing sector, while Energy -0.63% was the worst.

Overnight in America.

Dow Jones -0.47%.  SP500 -0.27%.  Nasdaq +0.14%.  Small Caps -0.68%.  Banks +0.14%.

Intra-day selling knocked the top off a positive start.

SP500.

 I think last night was the last hurrah of the bears.  Positive divergence on the MACD Histogram suggests more upside.

A controversial theory suggests that stock market returns are lower round a full moon and higher on a new moon.  Last night was a full moon.  (See here for evidence.)

Dynamic Zone Stochastic has moved up above its lower band - that's a short-term buy signal.

Commodities.

 Commodities Index down, -1.07% after Energy fell heavily -1.31%

Weird session on Base Metals, huge gap up then a bunjee jump down and back up.  Base metals finished +1.32%.  Agriculture down heavily -1.79%.  Gold -1.03%.

September is usually the worst month of the year.  We've now got that behind us.

October is often bi-polar, down early then up later in the month.  So we could see some more fluffing about before we see some definite upside moves.
 

 

29/9/23. Friday Morning Finspiration Report.

 Nice rebound in the American market last night.  Nothing startling but coming at the low end of a down trend it is promising.  Dow Jones +0.35%.   SP500 +0.59%.  Nasdaq +0.83%.  Copper up +2.08%.  Gold -0.49%.  WTI Oil -2%.  10 out of 11 sectors were up.  Energy was only just positive.  The one negative was Utilities.

Wednesday's "hanging man" candle (bullish) has morphed into a bullish candle on Thursday.  Expect more upside.

This morning. Sydney Futures are pointing to a positive start, up +0.64%.

Good Luck.

Thurs. Evening Finspiration Report.

 Action was choppy on the ASX today, with the XJO finished down marginally.  XJO -0.08%.

 XJO continues to hover above a major support level.  Today's candle was a "spinner" with a narrow body and long wicks above and below the body.  This indicates indecision.

Despite today's flat finish, breadth was poor with only two sectors up, Energy +2.96% and Materials +0.29%.  Financials had a modest fall, down -0.25%.  

Worst sector today was Discretionary -1.18%.  

In early trading tonight, Euro STOXX600 is down modestly -0.38%.  Dow Futures down marginally -0.1%.

Yesterday in Australia, XJO finished down marginally after testing support and rebounding.  XJO -0.11%.

Last night in America, indices pulled the same Oz trick.  Down heavily just before 2.00 p.m. American time, indices finished down a little, or up a little.

Dow Jones -0.2%.  SP500 +0.02%.  Nasdaq +0.22%.

SP500

 Coming at the low end of a down trend and a Hang-man candle, I think that will be the  end of this trend.  Look for follow-through buying.

Last night's action, plus the intra-day rebound in Australia, makes for a positive day to day in Oz, although our market will probably start on the downside.

Wednesday Morning Finspiration Report. 27/9/23.

The ASX is set to open on the downside this morning, with Sydney Futures -0.34% after the American market fell last night.  Dow Jones -1.14%, SP500 -1.47%, Nasdaq -1.57%, Copper -0.65% and Gold -0.91%.

Overnight, BHP -2%, Rio -1.68%.

SP500.

 SP500 is in the second wave down of its down-trend that started on 27 July. 

The index is now oversold with an RSI almost at 30.

The positive divergence on MACD Histogram suggests that the Index is close to a reversal point.  Major horizontal support and 200-Day MA are, however, still some distance away.

Stay with the trend until it has clearly ended.

RIO Tinto in America.

Rio is close to the Point of Control - the zone where the heaviest trading volume has occurred, so a reversal may not be far away.  Major horizontal support lies at 61.21.  Rio finished at 62.01.

U.S, VIX (Fear Index).

VIX, which trades inversely to stocks, is at the top of its range and showed a big intra-day reversal, so to a contrarian that suggests the fall in U.S. stocks is coming to an end.

Tuesday Evening Finspiration Post 26/9/23

 ASX falls today.  XJO down -0.54%.

XJO is having a hard time getting above the first of my Supertrend Lines (1/10).  It also remains below my 4EMA which is a very short term market.

But it remains above the critical horizontal support line at 7000 (round figures).

So the market remains in limbo.

Continue to wait and watch.

Monday Evening Finspiration Report. 25/9/23.

 Another fascination day on the Ozzie Market.  After falls in New York on Friday night, predictably, the ASX fell at the opening today - but intraday buying pushed the XJO up to a small positive gain.  XJO +0.11%.  The range today was not as dramatic as Friday's, but still impressive.

Only two sectors were negative today - but they were the Biggies, Materials -0.73% and Financials -0.21%.  So, although the gain was relatively small, breadth was good.

IT was the best performer today +1.92%.  Some of the big names in IT performed well today, XRO +2%, Wisetech +1.6% and Technology One +4%.

In early trading in Europe, stocks have fallen following the pattern in Australian today.  STOXX600 currently down -0.78%.  Dow Jones Futures currently down -0.15%.

Weekly Finspiration Report. 24/9/2

 

XJO Monthly Chart 

 

The long term chart of XJO has been range bound since Nov. 2022 - no trend.

So far in September, XJO has fallen -3.24%.  It is now almost back down to the lower edge of the sideways channel.

There's no reason to expect that this sideways channel will collapse.  

The sideways channel has persisted despite stready increases in interest rates by the Federal Reserve in America and the Reserve Bank in Australia.

In November 2022, the RBA's cash rate was at 2.85%.  The RBA held rates steady in Sept. 2023 and is now at 4.1%.  (The RBA began raising interest rates in May, 2022.  Its cash rate has gone up 4% during that time.)

The ASX stock market has been resilient in the face of steady increases in rates.

Long term investors have been frustrated by the lack of movement in the XJO - but that is better than a full-blown bear market which many were expecting in the face of interest rate rises.

Generally, an inverse correlation exists between interest rates and stock markets.  When interest rates go up, stock markets go down.  So it has been a bit surprising that the Australian market has been resilient in the face of interest rate rises.

XJO Weekly Chart.  

This week, the ASX fell heavily, down -2.89%.

The MACD Histogram in the bottom panel shows little sign of varying from the zero line, i.e., the Index remains range bound.

This type of market is best tackled by traders using "support and resistance" strategies. 

The stock market is always dynamic - one strategy will not suit all conditions - but invariably - the market changes and another strategy needs to be used.   Some common types of trading strategies are:  support and resistance, mean reverting, trend trading, break-out trading, momentum trading.  It's not a case of one style for every type of market.  

Contingently, the current market is best suited to "support and resistance" strategies.   Buy at a low support level and sell at a high resistance level.  We saw a dramatic example this week.

XJO Daily Chart.

Friday was a dramatic day on the Ozzie market.  It coincided with Options Settlement Day which always resutls in a big increase in volume.  Not how wide is Friday's candle - an indication of heavy volume.

The market started with a confident break below the support zone shown on the chart, but wise heads so "No" and the market rose steadily all day to which above the support zone.  I'd expect a test of that support zone before further upside which will need to overcome the next minor resistance level at the 24 August high.

Sector Performances this week.

 

 All sectors were down this week.  The best performer was Utilities -0.15% followed by Staples -1.53% and Discretionary -1.93%.

 

The worst performers were interest-rate sensitive sectors, spooked by a hawkish tone from the Federal Reserve despite on rise in interest rates.  IT -4.78%, Health -4.48%and Property -4.44%.

 

Property Daily Chart

 Property has been trading within a range of about 1100 points or 7.5%.  If things go according to Hoyle, we should see a move back to the upside from here.

100 Leader Stocks above their 200-Day, 50-Day and 10-Day Moving Averages.

• Above their 200-DMA:  last week 45%, this week 37%.
• Above their 50-DMA:  last week 46%, this week 25%
• Above their 10-DMA:  last week 51%, this week 24%.

The Stocks above 50DMA are at 25% - we don't often see figures that low within a rebound coming soon.

The last time was in late June and early July. 

SP500 - American Market.

Here's the SP500 Chart:

 

 On Friday, SP500 broke marginally below an importan horizontal support level.  Expect a move back to th upside.

 

Conclusion.

The Australian stock market has been range bound for many weeks.  It broke below major support on Friday and then rebounded solidly.  Expect more upside.

Be aware that there are no guarantees on the stock market.  The old adage must be remembered:  past performance is no guarantee of future performance.

If the market breaks decisively below support - then all bets are off.

Saturday Finspiration Report 23/9/23. Second for the day.

 Keeping it simple.  Renko Chart for XJO.

Draw your own conclusions.

(Renko Charts explained here,)

Saturday Finspiration Report. 23/9/23.

 Unbelievable day on the XJO Yesterday.  U.S. remains weak.  And - my computer behaves itself this morning after I gave it a good flogging.

XJO Chart.

 XJO finished up +0.05%.  Intraday Low to High +1.6%

Best sectors were Utilities +0.79%, Energy +0.72%, Materials +0.56%.  (Fortescue +1.46%, Pilbara +6.78%).

Worst sectors were ones impacted most by interest rates:  IT -0.67%, Health -1.02%, Property -1.41%.

Overnight In the U.S.

 Dow Jones -0.31%.  SP500 -0.23%.  Nasdaq -0.09%.  Small Caps -0.31%.  Banks -1.26%.

SP500.

 Indicators are at or close to oversold levels.  A positive divergence on MACD Histogram hints at a possible rebound.

Look for positive action in America on Monday.

Commodities.

 Commodities Index flat +0.08%.  Energy -0.3%.  Base Metals +1.03%.  Agriculture -0.18%.  Gold +0.32%.

For the Gold Bugs

 Gold was up a little last night, but bouncing off the lower trend line of the Andrews Pitchfork.  That suggests more upside.

 

 

Friday Morning Finspiration Report. 22/9/23

 I've been trying to pick a low all week for the Ozzie market - with dismal results.

Below is a weekly chart of XJO showing two big round number horizontal support levels.  (The market loves big round numbers.)

No - there is a no chart below - because my computer has decided its old and wants a pension.

Well - I'm willing to do that - but I'm hanging out for a new iMac with the M3 chip coming out at the end of the year.

Anyways - big number support levels for today's XJO are:

7000 and 6900

Good luck. 

Thursday Evening Finspiration Report. 21/9/23.

 Are we there?

XJO down heavily -1.37% today.

Chart for STW ETF for XJO

STW reached the Point of Control (zone of heaviest volume) today and stopped after being down heavily.

That level also coincided with the lower edge of the Value Zone and the middle of a congestion zone.

That looks like a lot of confluence to me.  I doubt it will fall further.  Especially after such a big down day I'd expect a better day tomorrow.

Information Technology was the best performer today, down just -0.05%.  That was a bit surprising after big falls in the Tech heavy Nasdaq last night in America.
 

Thur. Morning Finspiration Report. 21/9/23.

Yesterday, XJO Down -0.46%

In America, Interest Rate announcement nixed the U.S. market.

Chart for STW - ETF for XJO

 STW is down for three days in a row and likely to be down today.  It is close to an important support level and the lower end of the Value Zone.  Fourth day down is likely to be it. Today is options expiry day in Australia - so we can expect shenanigans.

SP500.

 Most of that long blue candle on today's chart was a result of the swoon coming after the Fed interest rate announcement.  Interest rates were put on hold - but expected to stay high for longer, perhaps one more rise.

Here's how the market reacted after the Fed announcement.

SP500 was in positive territory at 2.30 p.m. (Fed. announcement time) then fell more than 90 point.

A lot of that was due to bigger falls in the Nasdaq, down -1.53%.  Dow Jones Industrial was only down -0.22%.  That's a very wide divergence - which I think will narrow considerably in coming days.

Nasdaq with lots of Tech stocks is interest rate sensitive, that's the reason for the much bigger fall in the Nasdaq over the Industrials.

Commodities.

Commodities Index -0.82%.  Energy -1.61%.  Base Metals +0.7%.  Agriculture -0.27%. Gold -0.07%.

I suggested yesterday that Energy was looking at a fall - and that was confirmed today.

Gold also felt the impact of the Fed announcement.  Gold is negatively correlated to the U.S.$.  Higher interest rates mean a higher dollar and a lower Gold price.  The long upper tail on the Gold candle stick is indicative of the selling which occurred after the Fed. announcement.

After fifteen minutes of trading this morning, XJO is down -0.5%.
 

 

Wed. Morning Finspiration Report. 20/9/23.

 Major U.S. indices down a little overnight.  Fed. interest rate decision tonight.

Dow Jones -0.31%.  SP500 -0.22%.  Nasdaq -0.23%.  Small caps -0.26%.  Banks -0.42%.

SP500

 Last night's candle shows a long lower tail - plenty of intra-day buying.

That suggests to me that the "big boys" are preparing for some good news tonight from Fed Head Powell.

The intra-day bounce occurred at the lower edge of the Value Zone of the Volume Profile (horizontal bars at the left of the chart).  The Value Zone often acts as support/resistance.

Commodities.

 Commodities Index flat +0.08%.  Energy +0.04%.  Base Metals -0.8%.  Agriculture +0.41%.  Gold -0.09%.

Energy is consolidating at the top of a long up trend.  There's not a lot of oomph left in this rally.  I think some downside is looming.

Overnight Sydney Futures are down -0.22%.  That suggests a weak opening today in line with falls in the U.S.

Tuesday Morning Finspiration Report. 29/9/34

 Yesterday ASX down, last night U.S. flat.

STW (tracking ETF for XJO) down yesterday -0.65%.

20/50/200 Day MAs are all more or less aligned just below the finish of yesterday's downside movement.

Yesterday brings the STW down almost to the Point of Control on the Volume Profile (horizontal bars to the left of the chart.  A congestion zone exists just below the PoC.  STW (and XJO) will likely bounce there.  There's just too much support around that area to be ignored.

SP500

 SP500 is in non-trending mode which favours support/resistance traders.  (MACD Histogram almost flat.)

Last night was a narrow range event after heavy volume machinations on Options Expiry day on Friday.

20/50 Day MAs are aligned - non trending.

The chart is at the lower edge of the Value Zone for the Volume Zone - that favours a move back to the upside.

Commodities.

 Commodities Index -0.04%.  Energy +0.12%.  Base Metals +0.65%.  Agriculture -0.72%.  Gold +0.59%.

That's a bearish candle on the Ag. chart - coming high up in the trend suggests this upside move is coming to an end.

Gold is behaving favourably.

With Base Metals up, we might see some good moves in the miners today - but not reflected in last night's prices.  BHP -0.34%, RIO -0.88%.

Overnight Oz Futures -0.29%.  That suggests the ASX will open moderately lower today.

XJO Monthly Chart 

 

The long term chart of XJO has been range bound for the past year - no trend.

So far in September, XJO has fallen -0.36%.

This is a market for traders - long term investors wait.

XJO Weekly Chart.  

This week, the ASX was up +1.71%, more or less reversing the previous week's loss of -1.67%

The MACD Histogram in the bottom panel shows little sign of varying from the zero line, i.e., the Index remains range bound.

This type of market is best tackled by traders using "support and resistance" strategies. 

The stock market is always dynamic - one strategy will suit one set of conditions - but invariably - the market changes and another strategy needs to be used.   Some common types of trading strategies are:  support and resistance, mean reverting, trend trading, break-out trading, momentum trading.  It's not a case of one style for every type of market.  Contingency should be a mind-set for the successful trader.

STW Daily Chart.  (STW is a tracking ETF for the XJO)

 

Resistance is shown by the long dark rectangle on the chart.  

STW is close to that level now.  Friday's action shows a "shooting star" candle-stick which often comes at the top of a trend.  Notice now a similar candle-stick occurred on 4 September which resulted in a pull-back to support from 24 August.

The non-trending nature of the market is shown here by the fact that 50-Day MA and 200-Day MA are virtually locked together.

We can expect a pull-back.

Sector Performances this week.

 Only two sectors were down this week, Property -0.98% and Health -0.87%. 

Nine out of eleven sectors were up this week.  The best were Materials +3.88% and Financials +2.52%.

 

XMJ Weekly Chart.

 

XMJ has been in a trading range for most of this year.  Buy at support and sell at resistance has paid dividends throughout this year.

This week, XMJ bounced off support and may be heading higher - counter to the XJO. 

If the lower support is broken to the downside - we may see much lower prices.  As we are headed into the most dangerous time of the year (September/October), that should be something for traders to keep in mind.
 

100 Leader Stocks above their 200-Day, 50-Day and 10-Day Moving Averages.

Above their 200-DMA:  last week 43%, this week 46%.

Above their 50-DMA:  last week 40%, this week 46%

Above their 10-DMA:  last week 25%, this week 51%.

These figures reflect the rise in the Oz market this week.  All three figures are hovering in mid-range - consistent with a range bound market.

SP500 - American Market.

It was options expiry day on Friday in America, and, as often happens, fireworks exploded with the SP500 down -1.22%.  Options Expiry Day is notorious for such movements as Market Makers attempt to keep the market in a spot where most options expire worthless.  This is known as "Max Pain"

Here's the SP500 Chart:

 Notice how SP500 was forced down to the middle of its recent range (20-Day MA).  I think we can safely discard Friday night's action as an artefact of Max Pain manipulation.

Monday night's action might show which way the American market is going to go.

Despite all that - our market is likely to have a knee-jerk reaction Monday - to the down-side.  That might be a catalyst for further selling in the XJO taking it back down to support.  We shall see.

 

Conclusion.

The Australian stock market has been range bound for many weeks. 

XJO is now close to the top of its range - so, if recent history repeats - it will likely fall to the bottom of its range.  No guarantees - just a likelihood.

Not everything in the market follows the same road-map - as we saw in the Materials Chart above.  Opportunities will offer themselves to astute traders.

16/9/23 Saturday Finspiration Report.

 Oz up.  Europe up, U.S. down.

Chart for STW - tracking ETF for ASX200.

Huge upside movement by the Australian market yesterday, following on from a big move in the U.S. on Thursday.  But the U.S. market reversed last night - and our market will surely follow on Monday.

U.S. Indices.

 It was options expiry day in the U.S. on Friday, which explains the huge volumes seen on the major indices.  That may explain, at least in part, some of the big drop last night as the Market Makers weave their magic to inflict the greatest loss on expiring options.  We'll know more in Monday night's trading when "normal" conditions return.

SP500.

 Last night's action brings the SP500 back to the middle of the Bollinger Bands.  That's about the middle of the price distribution over the past 20-Days - which looks like the area the Market Makers might have been aiming for in their manipulations.

Commodities.

 Commodities Index -0.23%.  Energy -0.41%.  Base Metals -1.07%.  Agriculture -0.59%.  Gold +0.66%.

Overnight Sydney Futures were down, -0.56% which ensures the Oz market will open on the negative side on Monday.