ASX had a low volatility day today after three days of high volatility. XJO up +0.19% but well off session's high of +0.5%.
Today was the narrowest range of the past four days and an inside day. Notation for such an event is ID/NR4. This is an infrequent pattern. A break above or below from the high/low of today should involve an increase in volatility and provide short-term direction. Click here for more on this pattern.
Given that the XJO is oversold and showing a positive divergence on the MACD Histogram, I would think that the most likely direction is up.
Six Sectors were up today. Best was Materials (XMJ) +0.85%.
The five Sectors down today were: Staples -1.02%, Utilities -0.51%, Health -0.29%, Property -0.23% and Communications -0.2%. There's a bias in that group to Defensives. So we had some switching today out of Risk Off into Risk On. That's a positive sign.
Economic data out today showed a slowing in the economy. Manufacturing PMI down from 48.7 in September to 48 in October. Services PMI dropped from 51.8 in September to 47.6 in October. Numbers above 50 indicate expansion. Under 50 indicates contraction. That's good news for interest rates (going down) but bad news for the economy.
In early Tuesday trading in Europe, stocks are down a little, STOXX600 -0.17%. Dow Futures up +0.24%. That's not necessarily a great guide to what will happen today as we've seen in the past.
It will be a busy night (Oz Time) for company reports in the U.S. Some of the biggies coming Tues. are: Microsoft, Alphabet, Visa and Coca-Cola. Those reports could be market moving.
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