Finspiration Australia.

 1.5.23.  Monday Evening Finspiration Report.

ASX up modestly today after being well up early in the session.  XJO +0.35%.

XJO remains above its 8-Day EMA which is a positive, but remains under key horizontal resistance and triple bearish Supertrend lines.

eight out of eleven sectors were up.  Best Sector was Utilities +1.3%, followed by Energy +1%, Health +0.9% and Financials 0.8%.  Worst was Info Tech -1.4%, followed by Materials. -0.4%

Not much happening overseas. Europe shut for May Day and pre-market futures in America are also flat.

Finspiration Australia

 18/4/23.  Tuesday Morning Finspiration Report.

Modest gains in the U.S. overnight.

Dow Jones +0.3%.  SP500 +0.33%.  Nasdaq +0.28%.  Mid Caps +0.76%.  Small Caps +0.59%.  Banks +1.4%.

SP500.

The up-trend in the SP500 remains bullish.

DZ Stochastic continues to flirt with its "sell" line - last night it lifted just above the upper line of its Dynamic Zones.  RSI remains clear of its "sell" line - the 20-Day MA.  Both must confirm

Commodities.

Commodities Index -0.41%.  Energy -1%.  Base Metals -0.55%.  Agriculture +1.39%.  Gold -0.45%.

ASX Futures down -0.2% - that suggests the Oz market will have a weak opening.

Bitcoin.

Bitcoin was down heavily overnight, -2.88%.

Lots of bearish signals:

• Three doji candlesticks in a row (lots of indecision) followed by a big bearish candle (indecision eradicated).  
• Last night also fell below a major support/resistance line set back in May 2022.
• The first Supertrend line has turned bearish.
• Last night's candle fell below the 8-Day EMA.
• RSI has fallen below its mid-line (20-Day MA).  That's a sell signal.
• Dynamic Zone Stochastic has confirmed the RSI sell signal by falling below the upper line of the Dynamic Zones.

Stay Safe.

Finspiration Australia.

 4/4/23.  Tuesday Evening Finspiration Report.

Reserve Bank Interest Rate Day - A Fizzer?

XJO finished higher today - up just +0.18%.

Interest Rate Day often produces some sharp movements in the market - but not today.  After the "No Change" announcement, XJO did move higher but not much, up 14 points or +0.19%.  That's not a lot compared to what it can do on IRD.

Notice how the XJO moved up in the five minutes before the interest rate announcement.  Somebody (or somebodies) seems to have pre-empted the IR announcement.  I suspect it occurred while there was some unseen selling going on in the background - two bob each way.  If it goes down, the punter/s exits the buy side and let the sell side cascade down.  If it goes up - exit the sell side and enjoy the ride.  Remember that HFT Algorithms react in a milli-second, and large institutions act within one second.  No retail trader can hope to compete in these sudden changes in direction.

Nine out of eleven sectors were up today.  A big hit was taken by XMJ (Materials), down -0.9%.  BHP, the largest stock in that sector, was down -2.2% today.

Best sector was Energy, up +1.3%.  It got a push higher from oil price rises overnight - as a result of cuts by OPEC to their output.

Here's the XMJ Chart:

XMJ finished the day below the Short-Term Line (3-DEMA) but remains above the 8DEMA (dashed line).  A finish below that would be short-term bearish.

    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.

 1/3/23.  Finspiration Wednesday Night Report.

XJO was flat today.

The chart candles show two "inside babies".  Two small candles well within the range of Monday's wide range candle.  That's usually a bullish sign but needs confirmation of a big upside day.

Stochastic (bottom panel) has been in the oversold section below 20 for over three weeks.  That's plenty of time to elapse before a move to the upside.

Despite the flat finish there was plenty of action today.  The market was well down by 11.00 a.m. but then the GDP figures came out - which were disappointing.  Bad news was good news - so the market rebounded - hoping for some easing of interest rate rises.

Energy was up +1.6% today, but that was eclipsed by Materials, up +2.3%.

They were the only two sectors positive today.  Telecoms was worst -2.3%.  Financials didn't fare well, down -1%.

Let's see if we get a good upside move tomorrow.

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. Chart Analysis for Australian and International Stock Markets.

Weekly Wrap, Week ended 14 October, 2022.  Is the Bear finished?

XJO Monthly Chart.

This chart is almost identical to the one shown last week.  XJO made a good start to the month, but this is only Week One of October.  Week Two has been flat.  The chart remains in a down trend.

XJO Weekly Chart.

 

This week's candle is a "dragonfly doji" - which means the XJO finished almost where it started after having a big dip down during the week.  XJO finished down just -0.06%, essentially flat.

This week's candle remains marginally above the 8-Week EMA.  One of the two Supertrend lines has switched from blue (bearish) to yellow (bullish).  That suggests the XJO is in non-trending mode.  Hull MA13 remains headed down.  This chart is more bearish than bullish. has run into the resistance of the other Supertrend lines.

XJO has, however, bounced off horizontal support - so it may be headed higher to again test the 50-Week MA as resistance.

XJO Daily Chart.

 XJO was down strongly on Monday, waffled around on Tue-Thur, then surged higher on Friday.  

The Index remains within the confines of the descending broadening wedge shown on the chart.  A break to the upside of that wedge would be bullish, but then it faces the resistance of the 200-Day MA.  As a general rule, it is best not to enter long-term positions while the chart is below the 200-Day MA.

This week saw the XJO test the 50% retracement of the previous rally, and then bounced.  That could be the start of another test of the oblique restraining line of the descending wedge.  A break above that should see the continuation of the counter trend rally

Action on Friday raises the possibility that Tue-Thur is a higher low.  We need to see a higher high to call this a bull rally, i.e., XJO must rise above 4 October.

SP500 Daily.

 This is a fascinating study in chart analysis.  From the high in August, the chart has made lower highs and lower lows - the definition of a down trend.  The lower highs have all occurred after counter-trend rallies up to the descending 20-Day MA.  Each time, the chart has declined to form a lower low.

Momentum is slowing as shown by the MACD Histogram.  It shows a positive divergence from the chart.  This suggests the possibility of a trend change.

Thursday saw one of the biggest reversal days on the SP500 for the past 50 years.  That produced a lot of euphoria - to be dampened by a big down day on Friday.  Volatility like this often occurs at the end of trends as the bulls/bears battle for supremacy.

It will mean down day on the XJO on Monday.

ASX Sector Results for this week.

 Three out of eleven sectors were up this week, two of those (Consumer Staples and Consumer Discretionary) were only up marginally.  XJO finished flat for the week, but it was largely the good performance of Financials (XXJ) which kept the XJO more or less on an even keel.  XXJ up +3.61%.   

Relative Strength of Sectors.

RSI (Relative Strength Index) is calculated using the default setting of 14 days - almost three weeks of trading.  It provides a more reliable guide to changes in sectors than the one-week results which can jerk around quite a lot and, thus, RSI is probably a more reliable guide to recent strength in the sectors. (Click here for a description of RSI.)

 Four sectors out of eleven are above 50:  Financials (XXJ), Materials (XMJ), Energy (XEJ) and Industrials (XNJ).  That's the same as the previous week.  Leadership has now shifted from Energy to Financials.  Energy and Materials were weak this week, but a return to the upside should lead to an improvement in the XJO as a whole.

NewHighs-NewLows Cumulative.

  

This is a metric for the long-term investor.  While NH-NL Cumulative remains below its 10-Day Moving Average, it is best for long term investors to remain cautious and defensive regarding the market.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 76%, This Week 54%.  

2.  % of stocks above 50-Day Moving Average, Last Week 26%, This Week 27%.  This remains bearish.

3.  % of stocks above 200-Day Moving Average, Last Week 21%, This Week 29%.  That's an improvement but still bearish.

The long term metric (% Stocks below 200-Day MA) remains very bearish but above its 5-Week MA.  That's promising. I'd like to see this above at least 40% before feeling comfortable.

Conclusion.

 

Overall, our market remains bearish, but we may be seeing a nascent counter-trend rally.

Remember that bear markets tend to reverse quickly.  Just because the market is bearish doesn't mean it can't change to the upside in the blink of an eye.  The stock market tends to be forward thinking - and can reverse when everything looks bleak.  While the Federal Reserve keeps chanting their mantra of higher rates, that is capturing the thinking of many investors.  Irristible forces in the stock market might have other ideas.

I'll leave you with the same thought I gave you last week.

Interestingly, the stock market in 2022 has generally followed the downward path typical for a midterm election year since 1962, according to Dan Clifton at Strategas. The S&P 500 is down slightly more than the typical 19% intra-year decline, but the news improves if stocks stick to the script. Stocks have historically bottomed in October and rallied by an average of almost 32% in the next twelve months. Clifton notes that stocks have been positive in the year after every midterm election since 1942!

Stay Safe.

  

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.

27/7/22.  Overnight U.S. stocks fall.

 

Dow Jones -0.71%.  SP500 -1.15%.  Nasdaq -1.87%.  Small Caps -0.55%.  Banks -2.18%.

A slew of reports came out after the market closed including Alphabet, Microsoft, McDonald's, Coca-Cola, Chipotle.  U.S. Stock futures have rise after the bell, about +0.2%.

SP500

SP500 has fallen back to its 50-Day MA which may provide support.  

Federal Reserve gives its interest-rate decision tonight, which might provide market moving information.

Commodities. 

Commodities Index +0.2%.  Energy -0.28%.  Base Metals +1.14%.  Agriculture +1.23%.  Gold -0.12%.

Iron Ore +1.3%.  Thermal Coal +0.9%.

XJO started this morning to the downside, but has since jerked back up.  After 20 minutes, XJO +0.24% with Defensives leading the way.

     Weekly Wrap - Week ending 10 June, 2022.

XJO Monthly Chart.

XJO is only ten days into a new month (June).

The monthly chart remains range bound 6930-7539, but now at the lower edge of that range.  XJO finished Friday at 6932

The chart is  is essentially sideways as indicated by the two flat Supertrend lines, one above and one below the monthly candles.  

The MACD Histogram has fallen this week to the down-side, indicating that momentum is to the downside.

Weekly Chart.

XJO This week, XJO has its worst week since April, 2020, down -4.24%.  That broke a three week positive run.

The chart is range bound, in concert with the monthly chart, but clearly at the lower end of the range  

Medium term, the chart remains bearish..  Hull MA13 is blue (bearish); two Supertrend lines are blue (bearish) and the chart is just below the 8-Week EMA (bearish).  RSI and CCI are below their mid-lines (bearish). MACD Histogram is falling - momentum to the downside is increasing.

The chart is, however, rising from the lower edge of the range

Last week XJO finished at 7239, this week it finished at 6932.  

Daily Chart.

Both Supertrend Lines are bearish, Hull MA13 is bearish; Chart is below the 8-DEMA which is bearish.

On the bright side, there is a double positive divergence on the MACD histogram and the MACD itself.

That has a reasonably reliable leading indicator.  It suggests that the Chart will move up in the coming week.  

ASX is closed on Monday, 13 June for Queen's Birthday celebrations in the southern states.  So our market might escape the catastrophic fall in the U.S. on Friday if the U.S. bounces on Monday.

The ASX this week was knee-capped by a huge fall in Financials, down -9.01% after the Reserve Bank raised interest rates by more than expected +0.5%.

I'm a bit perplexed by the fall in the Financial Sector.  Rising interest rates are supposedly good for Banks as they can increase margins.  So the "big boys" who control the market must be assuming that economic activity will be so poor that will impinge on banks, and, possibly, they are expecting a large number of customers to fail in their loan repayments.

In yesterday's post, I looked at ANZ, one of the four big banks which dominate the Financial Sector.  That examination was hopeful of a rebound in ANZ, which would be reflected in the other three big banks.  So we may have seen the worst of the falls in Financials, at least in the short-term

SP500.

On Friday night, SP500 gapped down at the opening and continued falling to finish down -2.91%.

That move takes the SP500 down into a support zone from which it has bounced several times in the past.  After such a big fall, it is likely that SP500 will bounce again.

Sector Changes - past week.

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

Two sectors up, one flat and eight down. The best was Energy XEJ +4.97%, followed by Utilities XUJ +0.46%.  Energy fell heavily on Friday, down -1.64%.  It's run up might be coming to an end.

Financials (XXJ -9.01%) is the biggest sector in the market and a major drain on the performance of the XJO this week.  Not far behind is Real Estate XPJ -7.67%.  XPJ is an interest rate sensitive sector, so the big fall in XPJ is understandable.  The other sector highly sensitive to interest rate movements is Information Technology -4.81%.

New Highs - New Lows Cumulative.

This is one of the important breadth indicators.  Unless breadth is solidly positive, the market is always under threat.

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.

This is another important indicator of breadth.

ASX Advance-Decline Line is also bearish, and in sync with NH-NL Cum.

 

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 53%, This Week 17%.

2.  % of stocks above 50-Day Moving Average, Last Week 31%, This Week 18%.

3.  % of stocks above 200-Day Moving Average, Last Week 38%, This Week 29%

This is another indicator of weak breadth.  

Once these instruments fall below 20, that's a contrarian signal that the market might bounce.  Two out of three instruments are below 20.  It would be even stronger if the third one was below 20, but we are looking at a very weak oversold market, so the chance of a bounce is good.

I don't think there's any point in jumping the gun, if we're reaching an inflection point in the market, there'll be plenty of time to hop on a new trend.

Seasonally, we often see a medium term up-trend in stock markets.  I'd wait and see how this pans out.

Conclusion.

1.  Monthly, Weekly and Daily Charts are at the lower end of their ranges.   I could speculate that we'll bounce here, and there is some evidence for such a view, but jumping the gun could be dangerous move.

2.  Breadth is poor, so poor that contrarians will be salivating at the prospect of new buying coming into the market.  Contrarian signs are not always reliable, and sometimes well ahead of what could happen.  

3.  We need to see a move up on the Stochastic Daily chart.

4.  Double positive divergence on MACD and its Histogram point to the possibility of a move to the upside.

     Weekly Wrap - Week ending 3 June, 2022.

XJO Monthly Chart.

XJO is only three days into a new month (June).

The monthly chart remains range bound 6970-7630.  

The chart is  is essentially sideways as indicated by the two flat Supertrend lines, one above and one below the monthly candles.  

The MACD Histogram also indicates a flat or sideways market, with the Histograms almost non-existent for the past four months - hugging the zero line.

Weekly Chart.

XJO was positive this week, +0.78%.  This is its third week in a row to the upside.

The chart is range bound, in concert with the monthly chart.  

Medium term, the chart remains bearish..  Hull MA13 is blue (bearish); two Supertrend lines are blue (bearish) and the chart is just below the 8-Week EMA (bearish).  RSI and CCI are below their mid-lines (bearish). MACD Histogram is flat - non-trending.

The chart is, however, rising from the lower edge of the range

The chart shows a trading range in round figures from 7630 to 6930.  This week XJO finished at 7239.  

Daily Chart.

The daily chart is in a three-week up-trend, and has broken upside on the Donchian Channel.

Both Supertrend Lines are bullish, Hull MA13 is bullish; Chart is above the 8-DEMA which is bullish.

All of that looks hunky-dory, except - it all might just be a counter-trend rally.  Looming just above are the 50-DMA, 200-DMA and horizontal resistance, all three lined up together.  

To prove its bullish condition, the chart has to surpass those three resistance levels.  Maybe in the coming week?

(Many successful trading strategies use the 200-DMA as a filter.  Take long entries only if the instrument is above the 200-DMA, take short entries only if the instrument is below the 200-DMA.)

Sector Changes - past week.

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

The Market is relatively well balanced, with five sectors up, two flat and four down.  Resources (Materials XMJ +3.83%. Energy XEJ +3.96%) were largely responsible for the positive ASX return this week.  They remain the two sectors best placed for long trades.

Financials (XXJ -1.3%) is the biggest sector in the market and a major drain on the performance of the XJO this week.

New Highs - New Lows Cumulative.

This is one of the important breadth indicators.  Unless breadth is solidly positive, the market is always under threat.

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.

This is another important indicator of breadth.

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

It is, however,  below its 10-DMA and its 20-DMA.  

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 52%, This Week 53%.

2.  % of stocks above 50-Day Moving Average, Last Week 30%, This Week 31%.

3.  % of stocks above 200-Day Moving Average, Last Week 37%, This Week 38%

This is another indicator of weak breadth.  Despite the rise in the XJO the %age of stocks above key Moving Averages was relatively flat.

Weak breadth is often a leading indicator for falls in the market.

We need to see each of these parameters above 50% to feel comfortable about the XJO.

Conclusion.

1.  Monthly, Weekly Charts are non-trending - Daily Chart is in a medium term (15-Day) up-trend.  We need to see all three Charts in sync.

2..  Breadth is poor, so the most likely direction is down.  If breadth continues to be poor, we can expect a break down from the ranges, and a continuation of the bear market.  Perhaps not this week, but its not far off.

3.  50/200 DMAs are almost connected - that's stiff resistance.  Any rise is likely to be short-term when the XJO hits dual resistance of those two major MAs.