2/4/23.  Weekend Report - The Week That Was.  Week Ended 31/3/23.

XJO Monthly Chart.

The month of March finished with a flurry.  After being solidly down for three weeks, the final week of the month brought a rally.  XJO finished -1.11% for the month, but the long lower wick on this month's candle shows the extent of the rally in the past week.

The index finished above the 8-Month EMA.  Supertrend remains bullish and Hull MA13 remains bullish.  

  

Dynamic Zone Stochastic is on a "buy" signal from Dec. 22 and DZ RSI is on a "buy" signals from Nov. 22.  (These signals are advisory only, and can give false signals.)

XJO Weekly Chart.

                                            

XJO finished the week above its 50-Week MA (equiv. to 250-Day MA), and has bounced off support at the 6900 level (round figures).  

The last three candles are in a bullish configuration:  big down week, doji, big up week.

This week, the chart finished marginally above the 8-Week EMA but remains below the Supertrend and Hull MA13 remains bearish.  So, the market is not out of the woods yet.

DZ Stochastic still hasn't given a weekly "buy" signal.  DZ RSI has given a "buy" signal this week, that follows its "sell" signal back in early February.

XJO Daily Chart.

This week, XJO is up every day of the week.  It has finished above the 200-DMA and 8-DEMA. Supertrend is bullish and Hull MA13 is bullish.

Now for a cautionary note.  DZ Stochastic and DZ RSI are both in over-bought conditions.  A down-turn below the upper zones would be a short-term "sell" signal.  

Monthly and Daily Charts are in sync (bullish).  Weekly Chart is still a little hesitant with DZ Stochastic still not showing a "buy" signal, but DZ RSI is bullish.

Weekly Changes in Sectors.

All eleven sectors (plus Gold Miners) were positive this week.  This week's rally was broad based.  

Composite Bonds (a safe haven) saw it lose a little ground, down -0.39%.

Best sector, by far, was XMJ (Materials) up a massive +7.01%.  XXJ (Financials), the largest sector in the market, was up strongly, +2.49%.  The two weakest sectors (relatively) were XHJ (Health) +1.08% and XPJ (Property) +1.02%.  

Sector Momentum.

The above chart shows Monthly, Weekly and Daily RSI's for eleven sectors plus Gold Miners and Composite Bonds.

All three columns sloping up - bullish trend.  XDJ, XIJ, XTJ, XSJ, XNJ, XGD, IAF.

All three columns sloping down - bearish trend.  XPJ

Down then up - counter trend bullish rally.  XXJ, XMJ, XEJ, XHJ, XUJ.

Up then down - counter trend bearish rally.  No sectors.

This is a picture of a very strong market with only one sector showing bearish momentum - Property.

All other sectors, plus Gold Miners and Composite Bonds (IAF) are either in a bullish trend or a bullish counter trend rally.

NewHighs-NewLows.

This is a long-term indicator, but a good guide for long-term investors.

NH-NL Cumulative started falling on 9 Feb.  It has remained below its 10-Day MA since 13 February.  On Friday, it had its first up day since 9 Feb.

Until this (blue line) gets back above its 10-Day MA , it's best for long-term investors to stay defensive.

A momentum chart for NewHighs-NewLows provides a more bullish picture:

This chart shows that the difference between New Highs and New Lows has been narrow since 21 March. The 5-Day MA crosses above the 21-DMA on 22 March - which provides a "buy"signal.  

X-Overs of the 5DMA of the 21DMA have provided good medium term "buy" and "sell" signals.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 28%, This Week 77%.  

2.  % of stocks above 50-Day Moving Average, Last Week 29%, This Week 40%.  

3.  % of stocks above 200-Day Moving Average, Last Week 44%, This Week 50%.

Stocks above the 10-Day MA showed a solid improvement this week, it is now well into bullish territory.

Conclusion.

 

This week, the ASX was up breaking a series of seven down weeks in a row.  This week's rise was emphatic and suggests a phase shift in the market from bearish to bullish.  

Stay safe.

Finspiration Australia.

   26/3/23.  Weekend Report - The Week That Was.  Week Ended 24/3/23.

XJO Monthly Chart.

We've had over three weeks of trading so far in the Month of March.  So far, the month has been poor, with the XJO down -4.18%.  The index remains below the 8-Month EMA - bearish.

This chart gives very slow signals - as they only take relevance at the end of the month.  But currently, the chart is not looking flash hot.

  

Monthly RSI is at 49.74.  50 represents a dividing line between bullish and bearish.  

XJO Weekly Chart.

                                            

XJO finished the week below its 50-Week MA (equiv. to 250-Day MA), but it held support at the 6900 level (round figures).  That was set in the early days of January this year - so our market has gone nowhere in the ensuing three months.

In the past five days, XJO has fallen -0.57%.   We have now had seven weeks of weekly losses.  This week did show some buying during the week.  (See daily chart below)

Turmoil is largely due to fear about Bank solvency in the U.S. and Europe.

XJO Daily Chart.

This week, the XJO attempted to climb above the 200-Day MA, but retreated on Thursday.  Friday saw plenty of intra-day buying (see long lower wick on Friday's candle) so we may see another attempt at breaking above the 200-Day MA.

XJO remains oversold with an RSI at 35.31.  

Weekly Changes in Sectors.

Sectors were evenly split this week between positive and negative sectors.  Five sectors were positive and five sectors negative with one flat, XHJ.  The best performer was Discretionary +1.2%.  But that performance was smashed in the above chart by Gold Miners, +7.79%.  XGD is not a sector but an industry grouping within Materials (XMJ).  It is a good barometer of fear in the market, as Investors often see Gold (and Gold Miners) as a safe haven in times of turmoil.

The big damage this week was done by Financials -1.89%.  That's not a bad result given the turmoil in overseas markets.

NewHighs-NewLows.

This is a long-term indicator, but a good guide for long-term investors.

NH-NL Cumulative started falling on 9 Feb.  It crossed below its 10-Day MA on 13 February.  Until this (blue line) gets back above its 10-Day MA , its best for long-term investors to stay defensive.

Stocks v Bonds.  Relative performance.

On a relative basis, Bonds are currently outperforming Stocks, i.e., the chart is well below the zero level.  When Bonds are out-performing stocks its a sign to stay defensive.

The 5-Day MA and 21-Day MA provide a reasonable guide to the broad market.  When the 5-Day MA crosses below the 21-Day MA - stay defensive.  When the 5-Day MA crosses above the 21-Day go to offense.  The 5-Day MA crossed below the 21-Day MA on 9 February - sell signal.

The 5-Day MA crossed above the 21-Day MA on the 9 January - buy signal.

Here's the XJO with the cross-over dates pin-pointed:

The Bond Market is dominated almost exclusively by professionals while the Stock Market has a large proportion of retail investors (amateurs). 

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 19%, This Week 28%.  

2.  % of stocks above 50-Day Moving Average, Last Week 30%, This Week 29%.  

3.  % of stocks above 200-Day Moving Average, Last Week 50%, This Week 44%.

Stocks above the 10-Day MA showed a solid improvement this week.  That's often indicative of a possible change in trend.

 

Conclusion.

 

The market has been down for seven weeks in a row.  Market news has been dominated by dismal news among banks, small and large in the U.S. and Europe.

Our market is showing some signs of finding a bottom this week, but we need much more evidence before feeling comfortable about the Stock market.

The Stock/Bonds Ratio Chart might provide timely warning of a reversal to the upside.  So far, however, it is still saying, "Stay Defensive".

Stay Safe.

Finspiration Australia.

     26/2/23.  Weekend Report - The Week That Was.  Week Ended 24/2/23.

XJO Monthly Chart.

After almost four weeks, XJO down so far -2.27% after stalling at the top of the strong January candle.  XJO has also reached a zone where it has failed in the past.

So far, the Index is above the 8-MEMA, Hull MA13, 50-MMA, 200MMA, Supertrend (7/1.5).  Not much damage done yet.

  

Monthly RSI is at 54.68.  50 represents the dividing line between bullish and bearish.

XJO Weekly Chart.

                                            

XJO remains in an up-trend, with higher highs and higher lows.  In the past five days, XJO fallen -0.54%.

XJO began to fall three weeks ago at a major resistance level.  

8-Week EMA and Hull MA13 turned turned down, which is bearish. Supertrend is providing support at this moment.  Events overnight in America could see a break to the downside of Supertrend.

Weekly RSI is at 55.2 - bullish but falling.  

CCI remains above its zero line (but falling).  It's been above its zero line since 24 Oct. 2022.  That marked the start of this bull market.

XJO Daily Chart.

XJO was in a strong up-trend in January.  It is currently in a short-term down-trend.

Daily RSI has fallen below its mid-line of 50.  That's bearish

XJO may be finding support at the 50-Day MA.   As stated previously, events on Friday in America could see a decisive break below that support level.

Weekly Changes in Sectors.

Despite the fall in the XJO this week of -0.54%, breadth was quite healthy.  Only two sectors fell this week, XMJ (Materials) -2.96% and XDJ (Discretionary) -1.23%.  XSJ (Staples) was flat, +0.09%

A couple of sectors showed quite healthy gains, XUJ (Utilities) +6.05% and XPJ (Property) also +6.05%.

The damage to the XJO was mainly done by XMJ (Materials) after both BHP and RIO presented gloomy reports to the market.  That's largely a result of events in China, where the country was in lock-down for the second half of 2022 - the time covered by the reports from BHP and Rio.  (The biggest markets for those two countries are in China.)

Monthly, Weekly and Daily RSIs. - Sectors + XJO + Gold + Composite Bonds.

This week's chart:

Each sector has three bars representing the RSI on Monthly, Weekly and Daily bases.

The following is a rough guide to interpreting the chart.

Bullish:  Rising bars.

Bearish:  Falling bars.

Counter trend rally:  Falling then rising.

Pull-back:  Rising then falling.

Bullish Sectors: XIJ, XNJ.

Bearish Sectors:  XXJ, XMJ, XEJ.

Counter trend Rally:  XUJ, XPJ.

Pull-back:  XDJ, XTJ, XHJ, XSJ.

XJO is in pull-back mode.  Composite Bonds (IAF) and Gold (XGD) are also in pull-back mode.

NewHighs-NewLows.

This is a long-term indicator, but a good guide for long-term investors.

NH-NL have been pulling back since the end of January.  That's a warning sign to long-term investors to stay defensive,

Stocks v Bonds.  Relative performance.

On a relative basis, Bonds are currently outperforming Stocks, i.e., the chart is below the zero level.

This is a reasonable picture of bullish and bearish status of the market.  It's probably a good idea to remain bearish on stocks while this chart remains below zero.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 42%, This Week 44%.  

2.  % of stocks above 50-Day Moving Average, Last Week 61%, This Week 56%.  

3.  % of stocks above 200-Day Moving Average, Last Week 70%, This Week 65%.

In the short-term, breadth, as measured by stocks above the 10-Day MA, improved a little this week as indicated by the Sector changes shown above.

The longer term measures remain above the 50% mark.  So the market is not in bad shape.

SP500.

I mentioned early in this report, the poor results in America on Friday.  Here's the SP500 chart.

SP500 began a steep decline six days ago and has fallen five of the past six days.  Friday saw a fall of >1%.  That could result in a follow-on fall in the XJO on Monday.

But a lot of strange things are happening in this chart.  Three of the candles show "hang-man" candles.  A small body at the top of the candle and a very long lower wick.  That indicates plenty of intra-day buying.

Although the bears have been dominant in the past six days, bulls have been fighting good rear-guard actions on three of the days, pushing back against the bulls.

The chart is now down to a crucial level.  It bounced strongly off the 200-Day MA on Friday despite the initial big fall.  Such action could spell the end of this push down by the bears.  We need to see a big upside candle on the SP500 on Monday to be confident that this fall is over - at least in the short-term.

It would be very interesting on Monday if the XJO pre-empts the SP500 by rising, or at least showing good strength in intra-day trading

 

Conclusion.

 

February has been a poor month for the XJO.  Although the past week showed a net loss for the XJO, internal strength wasn't nearly as pessimistic as suggested by the -0.54% fall in the XJO.

The long-term trend for the XJO is still bullish with higher highs and higher lows. 

Markets here and in the U.S. are now at a crucial stage.  Watch carefully for events on Monday.

Finspiration Australia

         11/2/2023.  Finspiration Saturday Report.

XJO down, U.S. stocks mixed, Energy up, Base Metals down, Gold up.

Yesterday in Australia.

XJO was down -0.76% on Friday.  It closed below both the Conversion Line and Supertrend and is now in a short-term down-trend.  Yesterday's big fall will probably be followed by a much narrower range day on Monday.

Overnight in the U.S.

Dow Jones +0.5%.  SP500 +0.22%.  Nasdaq -0.61%.  Small Caps +0.24%.  Banks -0.12%.

SP500.

SP500 has finished below the Conversion Line but found support at the Supertrend.  That's in a no-man's land between short-term support and resistance.  Let's see which way this breaks.

Commodities.

Commodities Index +1.42%.  Energy +2.74%.  Base Metals -1.97%.  Agriculture +0.95%.  Gold +0.19%.

Bitcoin.

Bitcoin was down -1.43% overnight.

BTC is now down to a support zone. and remains above the 200-DMA.  RSI is sitting on the mid-line (50) which often acts as the dividing line between bull and bear.

Stochastic is oversold.  I'm thinking we'll see an upside move from here.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 13/9/22.  Overnight in America, stocks continue to run higher for fourth day.

Dow Jones +0.71%.  SP500 +1.05%.  Nasdaq +1.27%.  Small Caps +1.28%.  Banks +0.83%.

European stocks also rose strongly, with European STOXX 600 up +1.8%.

SP500.

Short-term, SP500 continues to be bullish, but now facing some resistance from a congestion zone to its left and the Base Line of the Ichimoku system.  Expect some consolidation here.

Commodities.

Commodities Index +1.38%.  Energy +1.47%.  Base Metals +1.05%.  Agriculture +0.69%.  Gold +0.51%.

Iron Ore -0.6%.  Thermal Coal +0.5%.

Overnight Oz Futures +0.7%.  

Expect another solid day for the ASX today on the back of higher overseas stocks and commodities.

BITCOIN.

Since early June, 2022, Bitcoin has been in a long sideways consolidation within a longer down trend.

It remains below the Kumo Cloud and well below its 200-Day MA.  Until resistance of those two indicators, it is best to consider any rally to be a counter-trend rally in an ongoing bear market.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets

2/9/22.  Overnight in America, results were mixed.

Dow Jones +0.46%.  SP500 +0.3%.  Nasdaq -0.26%.  Small Caps -1.22%.  Banks -0.17%.

SP500.

Strong intra-day buying pushed the SP500 into positive territory, eliminating early losses.

The Index has found support at the Kumo Cloud.  That's promising, this could be the bottom of this pull-back.  We need to see further upside before being confident.

Commodities.

Commodities fell heavily overnight.  Commodities Index -2.14%.  Energy -2.15%. Base Metals -3.79%.  Agriculture -1.55%.  Gold continues in its bear market, -0.88%.

Iron Ore -8%.  

Those resource prices are going to put a dent in today's ASX numbers.

Overnight Oz Futures are up +0.3% which suggests a positive opening to today's ASX trading.  I think that might be a bit optimistic.


 

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

23/7/22.  Yesterday in Australia.

XJO chart shows a doji candlestick which indicates indecision.  The index finished flat -0.04%.  That comes at a major horizontal resistance level, so the next move may be to the downside.

The market is in a short-term up-trend but a long-term down-trend.  So we can count the current rally as a counter-trend rally.

Stochastic is overbought.  It can remain overbought for lengthy periods of time, but in a bear market the period of time is usually brief.  Watch for a break below 80 for an end to this rally.

Overnight in America.

Dow Jones -0.43%.  SP500 -0.93%.  Nasdaq -1.87%.  Small Caps -0.94%.  Banks -1.52%.

Earnings season produced some big falls yesterday, particularly among social media stocks.  META (Facebook) was down -7%.  Pinterest -13%, SNAP -39% and Alphabet -5%.

Eight out of eleven sectors were down.  The only positive sectors were Consumer Staples +0.66%, Utilities +1.37% and Real Estate +0.76%.  Real Estate got a boost from lower bond yields.  They usually also provide a boost to Technology, but that was weighed down by poor earnings.

SP500.

SP500 is now into the Kumo Cloud - that's a "no trade" zone, so we might see a more turbulent market here.  A break back below the Cloud would be a bearish event.

The Cloud is quite wide here, which means resistance is strong.  The most likely movement, medium term, is back to the downside.  But the market will remain captive to earnings reports.

Commodities.

Mixed results in Commodities.  Commodities Index -1.19%.  Energy -0.81%.  Base Metals -0.6%.  Agriculture -1.53%.  Gold +0.25%.

The lower bond yields in America and good metals prices might help the XJO to some extent on Monday, but I'm not expecting a positive day.

 

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 18/6/22.  Yesterday in Australia.

Yesterday, the ASX200 (XJO) was down -1.8%.

Below is the chart for STW - ETF for the ASX200.  I've chosen the STW chart today rather than the XJO chart because STW chart is somewhat more realistic in showing the market than the XJO.  XJO always starts where the previous day leaves off - so it is always continuous.  STW opens either up or down from the previous day's close.  Those gaps are often small, or, as in recent days quite large.  It also allows us to see more clearly the intra-day action in the market.

Friday's candle shows an opening gap down of >2%.  It then fell more (long lower wick) then recovered somewhat to finish above its opening quote.  So we did see some intra-day buying, which didn't occur on Thursday when the candle was basically all blue, i.e., it fell from its opening quote and didn't recover.

I've also shown on this chart the clear Head/n/Shoulders pattern which formed from late February into early June, with the Head forming in early April.

The fall from the Head to the  Base Line is >8%.  The fall from the Base Line to the low of yesterday's candle is ~7%.  So, if the Standard Measure Rule (SMR) is followed, STW still has about -1% to fall before we get a rebound.  SMR is never 100% accurate, but provides a guide to investors watching for a Point of Interest, give or take a bit, where a rebound might occur.

Are we there yet?  Maybe, start looking for a rebound now.  Any rebound will, however, probably be a counter-trend rally while Central Banks around the world continue to turn the interest rate screws to counter inflation.

Overnight.

Dow Jones flat -0.13%.  SP500 +0.22%.  Nasdaq +1.43%.  Small Caps +0.7%.  Banks +0.88%.

Yesterday in America was Options Expiry Day, which leads to much higher volumes.

SP500.

SP500 is now down -24.5% since its high in early January.

The Options Expiry Week shows a statistical bias to the positive side.  It certainly didn't happen this week with the SP500 down -6%.  Bear Markets ruin every edge that statistics provide to the trader.

Here's a weekly chart for SP500:

This chart provides clues to a possible "bottom" in this bear market.  

The 50% retracement level is shown from the bear market low of March 2020 to the high of the rally in early January 2022.  That level is at 3502.6.  SP500 finished Friday at 3666.8

The 50% retracement level more or less coincides with the 200-Week Moving Average and horizontal support/resistance from August-November 2020.

So, we have triple alliances occurring around the 50% retracement level.  That's powerful stuff.

I've also calculated a turn date (using Gann measure principles) of 26 June, give or take a couple of days.  Another week of down time would bring the SP500 down to about that triple alliance.

Look for a rebound around that level, i.e., in round numbers 3500. 

Good luck.

Finspiration Australia. Chart Analysis of Australian and International Stock Markets.

Overnight.  The Bear Rages.

 Dow Jones -2.79%.  SP500 -3.88%.  Nasdaq -4.68%.  Small Caps -4.46%.  Banks -3.41%.

SP500.

SP500 has hit a new 52-week low.

SP500 stock chart shows positive divergences on Stochastic, MACD and Histogram.  The market is probably not far off a bottom.

Commodities.

Commodities Index -1.12%.  Energy -0.83%.  Base Metals -1.9%.  Agriculture -1.14%.  Gold -2.64%.

After 30 minutes of trading, XJO is down about -5%.  The descent has just begun to slow down.

Finspiration Australia. Chart Analysis of Australian and International Stock Marke

   Weekly Wrap - Week ending 20 May, 2022.

XJO Monthly Chart.

After three weeks of May, the monthly chart is range bound 6970-7630.  

The chart is currently below the 8-month EMA but it is essentially sideways.  

We need about another week of data to see how the Monthly chart is travelling

Weekly Chart.

XJO was positive this week, +1%, breaking four weeks in a row to the downside.

The chart is range bound, in concert with the monthly chart.  Medium term, the chart the chart remains bearish..  Hull MA13 is blue (bearish); Supertrend (1.5/7) is blue (bearish) and the chart is below the 8-Week EMA is heading down (bearish).  RSI and CCI are below their mid-lines (bearish) and Stochastic has fallen below its signal line (bearish).

The chart is, however, at the lower end of the range so we'll probably see a move to the upside in the coming week.

The chart shows a trading range in round figures from 7630 to 6930.  This week XJO finished at 7075.  

Daily Chart.

In the short-term, this chart is looking positive.  Indicators in the lower panels have turned up; Hull MA13 and Supertrend (1.5/7) in the top chart are also bullish.

The chart has now formed a higher low, that's half-way to concluding a new up-trend.  We still need to see a higher high to complete the criteria for an up-trend.

The daily chart is, thus, out of sync with the weekly chart - that's typical in a range-bound market.

Sector Changes - past week.

This chart shows the performance of each sector (plus Gold Miners, XJO, BEAR and IAF) over the past week.  

Pluses and minuses for sectors were evenly spread with six sectors up and five sectors down.  Materials (XMJ +3.65%) had a return to form as did Information Technology (XIJ +5.04%).  

Consumer Staples (XSJ -3.45%) was the worst after a poor report from Woolworths (WOW -6.08%) and a big fall in URW -7.87% after a big sale of stock under market value.

New Highs - New Lows Cumulative.

NH-NL Cumulative continues to fall and is now well under its 10-Day Moving Average, that's a big red danger sign for long-term investors.  

ASX Advance-Decline Line.

Like NH-NL Cum, ASX Advance-Decline Line is also bearish, but not as bleak as NH-NL Cum.

It is nudging on its 5-Week Moving Average and another good week would take it over that metric.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 20%, This Week 74%.

2.  % of stocks above 50-Day Moving Average, Last Week 36%, This Week 38%.

3.  % of stocks above 200-Day Moving Average, Last Week 33%, This Week 40%

Two out of three are below 50% level - which confirms the bearish status of the ASX.  This week's bounce has resulted in a bounce in the shortest term metric.  That could be the start of a medium-term trend reversal.

Last week I noted:   This is the second week in a row where %Stocks above 10-DMA has been 20% or below.  That's another contrarian signal for a short-term bounce.  We got that bounce this week.

The above chart compares the performance of XSJ Consumer Staples (yellow and blue candles) with XDJ Consumer Discretionary (blue and grey candles).  

If consumers are confident about the economy, they are usually happy to splurge on big ticket, discretionary items - companies such as Harvey Norman, JB Hi-Fi and car retailers.  If consumers are not so confident about the economy, consumers tend to delay buying big ticket items.  

Conclusion.

1.  Weekly and daily charts out of sync - typical of a range-bound market.  Traders will play the ranges.

2..  Short to medium term is looking good for further upside.  We've probably seen a bottom in the medium-term.

I gave three beaten down stocks as tips last week ALL, REH, JHX.  

     ALL:  Buy at or above 33.06.  Stop Loss at 31.64.

     REH:  Buy at or above 16.00.  Stop Loss at 15.02.

     JHX:  Buy at or above 40.64.  Stop Loss at 39.06

ALL triggered a buy on Thursday when it hit 33.06.  It finished Friday at 35.17.  That's a gain of +6.4% so far.  Move stop up to break even at 33.06.  Continue to move the stop up if ALL continues rising.

REH triggered a buy stop on Monday at 16.00, but continued to fall the rest of the week.  Stop Loss still not triggered.  REH is currently sitting on a loss of -3.4%.

JHX didn't trigger a buy stop.  No trade.  Forget about JHX,

From the two trades, we're sitting on a gain of +3%.