24/6/23. Saturday Finspiration Report.

 Friday - felt like Armageddon.  XJO down,  Dow down, Nasdaq down, Europe down, Commodities down.

Armageddon - that is - if you're a normal person - but those dark villains on the "short" side (and I'm not talking about Friends of Snow White or Santa's Little Helpers) were chugging Dom Perignon out of crystal slippers previously worn by Princess Beatrice, who is by now sleeping rough in Piccadilly Circus.

XJO down -1.34%.

That takes the XJO down to just below the 200-Day MA - where it's been a couple of times recently - and then recovered.  

Well - anything is possible in this crazy stock market world, but this looks very different from those two previous efforts of flirting with the 200-Day MA.  

In the U.S. last night:

Dow Jones -0.65%.  SP500 -0.77%.  Nasdaq -1.01%.  Mid Caps -1.16%.  Small Caps -1.65%.  Banks -1.08%.

SP500.

SP500 is nowhere near as dire as the XJO.  It is way above the 200-Day MA.

As I've noted in the past, XJO decoupled from the American market a long time ago - that's due to the out-sized influence of Technology on the U.S. market - whereas, the Australian Tech sector has a small impact on our market.  The Oz market is more influenced by the resources sector which depend on China and Japan for markets.

Still, SP500 is showing weekness.  The three indicators in the lower panels are all on sell signals.

Two out of three super-trend lines have turned bearish.  But, the SP500 is back to the mid-line of the Andrew's Pitchfork, which suggests it might find support at that level.  We shall see.

Commodities.

Commodities Index -1.08%.  Energy -0.26%.  Base Metals -1.96%.  Agriculture -1.91%.  Gold +0.28%.

Those Energy and Base Metals prices provide little joy for our resources sectors.

In Sydney, SFE Futures for ASX200 is down -0.23%, which suggests a weak opening on Monday.

Finspiration Australia.

 13/5/23.  Saturday Morning Finspiration Report.

Australia was flat on Friday, in the U.S. major indices down a little.

XJO

XJO was up just +0.07% on Friday - the fourth day of little movement in the indices.

The Supertrend Lines (two yellow and one blue) indicate a non-trending market.

Daunt DZ Stochastic is bullish, but Daily RSI remains below its 20-Day MA.  Again this is typical of a non-trending market.

A move in the Supertrends to all yellow and a move by the RSI above its 20-Day MA would be bullish.

Time to be patient.

Overnight in the U.S.

Dow Jones -0.03%.  SP500 -0.16%.  Nasdaq -0.35%.  Mid Caps -0.02%.  Small Caps -0.29%.  Banks -0.79%.

Not much happening in the U.S. where the regional banks are still cause for some concern.

SP500.

The SP500, like the XJO, shows a non-trending market.

Wait.

Commodities.

The Commodities don't hold much joy for Australian stocks, although Base Metals seems to be stabilising after Thursday's big drop.

Commodities Index -0.79%.  Energy -1.6%.  Base Metals +0.66%.  Agriculture +0.24%.  Gold -0.17%.

It looks like more of nothing much for our market on Monday.

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.

15/4/23.  Saturday Finspiration Report. 

XJO up on Friday.  Dow Jones down on Friday night.

XJO, after starting on the down-side on Friday, finished on the high-side, up +0.51%.  It remains stalled at horizontal resistance where it's been for the past three days.

The trend remains up - so stay with the trend until we see definite signs of a pull-back.

Overnight in America.

Dow Jones -0.42%.  SP500 -0.21%.  Nasdaq -0.36%.  Mid Caps -0.52%.  Small Caps -0.79%.  Banks +1.09%.

SP500.

Last night's candle was a "doji" indicating indecision.

SP500 is stalling at horizontal resistance and CCI is showing negative divergence.

DZ Stochastic has marginally broken below its upper Zone line - the first suggestion of a "sell" signal.  This needs confirmation by a move by RSI below its middle line - its 20-Day MA.

Commodities.

Not much movement in Commodities except for Gold.

Commodities Index +0.12%.  Energy +0.09%.  Base Metals +0.1%.  Agriculture +0.19%.  Gold -1.77%.

The Gold chart has left and "evening star" doji candle-stick from Thursday night.  That's often a sign of a pull-back.  But the chart has been left sitting on the 20-Day MA - so it could bounce here.

Overnight in the U.S., BHP was down -1.79% and Rio was down -1.89%.

Bitcoin.

Bitcoin in USD was up +0.63% last night and remains bullish.

(I don't have an up-to-date chart yet, but will put one up when it becomes availble.)

Finspiration Australia.

 12/4/23.  Wednesday Evening Finspiration Report.

XJO was up moderately today, +0.47%.

XJO is in a strong up-trend.  Today it reached a horizontal resistance level and encountered some intra-day selling.

The Index remains above the 50-Day Moving Average so we might see the Index come  back and test that as support.  If that test is successful and the index bounces - we should see more upside.

RSI and DZ Stock are both strong and in no danger at this stage of giving a sell signal.

Stay with the trend.

Finspiration Australia.

 12/3/23.  Tuesday Morning Finspiration Report.

U.S markets mixed overnight.  Rio up >5% in London.

Dow Jones +0.29%.  SP500 -0.00%.  Nasdaq -40%.  The front-line troops of the market (Mid Caps and Small Caps) were both positive.  Mid Caps +0.89%.  Small Caps +0.73%.  Banks were also positive, +1.28%.

SP500.

SP500 has bounced off the 8-Day EMA, - that's a positive.  In the very short-term, however, Hull MA13 has turned down.  Watch for direction in the next session as today's candle was a doji - indecision.

U.S. is coming up to important inflation data which will likely be market moving.

SP500 remains in an up-trend - above the 8-Day EMA and Supertrend.

Commodities.

Commodities Index +0.54%.  Energy +0.87%.  Base Metals -0.31%.  Agriculture +0.68%.  Gold +0.63%.

ASX Futures point to a positive opening this morning, +0.25%.

We should have another positive day today.

Finspiration Australia.

 11/4/23  Tuesday Evening Inspiration Report.

XJO is in a strong upside trend.  Today, XJO was up +1.26% despite a lack lustre lead from the U.S. last night.

XJO jumped up this morning away from its recent short-term consolidation.  It finished well above its 50-Day MA.  

The three Supertrend lines are all strongly bullish.

After such a strong day we might see some settling back tomorrow.  

Next resistance level is at 7365, support at 7226.  XJO finished today at 7310.

Both DZ Stochastic and RSI confirm the uptrend.  RSI is at 62.32 - so there's more room to move before it gets into overbought territory.

Until otherwise indicated stay with the trend.

Stay safe.

     9/4/23.  Weekend Report - The Week That Was.  Week Ended 6/3523.

XJO Monthly Chart.

We've had only one week so far in April.  XJO is up, so far, +0.57% and remains within the range of the month of March.

The three Supertrend lines are showing a non-trending long term index, one Supertrend line above the chart and two Supertrend lines below the chart.  All three Suprertrend lines are horizontal - indicative of a sideways trend.

PPO is above 0 - that suggests a bullish trend.  It's been that way since Dec. 2020.

DZ Stochastic is above its buy line, but turned down - indecisive.

Schaff Trend Cycle is just below its "buy" line.  It wouldn't take much to turn that bullish.

This is only at the beginning of the month, so no decisions made on this chart.

XJO Weekly Chart.

                                            

The weekly chart shows the XJO in a counter-trend rally against the big fall from early February to late March.  We need to see all three Supertrend Lines to turn yellow to presume that we have a new upside trend.  

DZ Stochastic has turned up but hasn't crossed above its "buy" line.  Schaff Trend Cycle remains under  its "do not buy" line.

PPO is marginally above its zero line.  We need to see it turn up from there to be confident of a new bullish trend.  

XJO Daily Chart.

XJO was up +0.57% this week.

XJO was up eight days in a row until the negative day on Thursday. That's an unusually strong short-term rally, and it appears to be faltering with three narrow-range doji candlesticks in a row.  That's occurring at a support-resistance line at 7226.  XJO finished the week at 7219 - marginally below horizontal resistance.

That Horizontal Resistance Line also coincides with the 50% retracement of the fall from early Feb. to late March.  Reversal of trends often occur at the 50% level.

DZ Stochastic has turned down but remains above its "sell" line.  Schaff Trend Cycle also remains above its "sell" line.  PPO is marginally above its zero line.

All that suggests that the coming week could be crucial to the future of the XJO.  

Weekly Changes in Sectors.

XMJ (Materials) was the dog in the major this week.  (Not quite an appropriate metaphor in the Easter Week).

XMJ was the only negative sector - down -2,72%,

Defensive Sectors were fairly strong this week:  XHJ +3.83%, XSJ +1.78%, XUJ + 1.78%, XTJ +1.68%.  

That suggests we've seen a rotation into defense against the usually strong XMJ.  It should be kept in mind that XMJ was up +7.01% in the previous week.  So it's not surprising that it had a fall this week.

Sector Momentum.

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

All three columns sloping down - bearish trend.  XMJ, XPJ

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

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

Some sectors were affected this week, XHJ moved into the bullish section.  Materials moved from "bullish counter trend rally" to "bearish".  Again - this emphasises the shift into defense from offence.

Gold Miners and Composite Bonds (IAF) are bullish - both of those tend to be safe havens.

XJO remains in a "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.  This week it moved back above its 10-Day MA.   That's a promising sign for long-term investors.

Stocks/Bonds Ratio.

The recent strong 8-Day bullish rally took the Stocks/Bonds Ratio into an upside movement.

Then, the past couple of days has seen it equivocate.  It nudged above the zero line, then fell back below the zero line.  The zero line is the demarcation between medium tern bullish and bearish.

Historical and Implied Volatility.

When Historical Volatility falls below Implied Volatility - the market is usually in a short-term bullish trend.  (HV is based on historical data of the XJO.  Implied Volatility is based on data from the VIX Index.)

When HV gets down to around the 5 level, a reversal in the XJO trend usually occurs.  HV is not far off that level.

(This is often a leading or co-incident indicator.)

% of Stocks above key moving averages.

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

2.  % of stocks above 50-Day Moving Average, Last Week 40%, This Week 51%.  

3.  % of stocks above 200-Day Moving Average, Last Week 50%, This Week 60%.

Stocks above the 10-Day MA has stalled this week at 77%.  Medium term and long term the market improved.

Conclusion.

 

XJO has had a strong counter-trend rally but appears to be stalling at Horizontal Resistance.

I've outlined plenty of pluses and minuses, and maybes about the market this week.  Nothing convincing one way or the other.

The coming week may be crucial for the near-term future of the XJO.

XJO resumes trading on Tuesday.  America will resume on Monday so that could provide an indication of where our market will go.

Addendum.

Asian markets, which were not closed on Friday, were up, Japan +0.17%.  Korea +1.27%, Hong Kong +0.28%, Shanghai +0.45%.

In America on Friday, Non-Farm payrolls indicated a slowing in employment.  CNBC commented: 

Nonfarm payrolls growth in March was about in line with expectations, but showed signs that the jobs picture is in the early stages of a slowdown.

That might give the American market hope for a slowing or pause in Federal Reserve interest rate rises and a boost to stock markets.

U.S. Futures were mildly positive on Friday.  Dow Jones +0.19%, SP500 +0.23%, Nasdaq +0.1%.

That's all relatively positive for America on Monday night - but anything can happen.  Wait for Tuesday morning.

Finspiration Australia.

 5/4/23.  Australian market finishes flat today.

XJO finished just up today, +0.02%.

Today's candle is a doji which is often an ominous signal coming at the top of an up-trend.

Today was the eighth day to the upside.  That's getting a bit old for a short-term up-trend.  Of course, it can go higher, but the probabilities now lie to the downside.

Despite the marginal upside finish, breadth was good with nine out of eleven sectors finishing in positive territory.

Negative sectors today were in the resources:  XMJ (Materials) -0.6% and XEJ (Energy) -0.6%.

Amongst the large cap stocks today, BHP -1.5% and Rio -0.9% were the worst performers.

Best performer was Telecommunications +0.8%.  Three sectors recorded rises of +0.7%: XIJ, XNJ and XHJ.  Those three sectors are now sitting at strong overhead resistance - adding weight to the idea that we may see a pull-back.

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.

Finspiration Australia.

     5/3/23.  Weekend Report - The Week That Was.  Week Ended 3/3/23.

XJO Monthly Chart.

We've only had three days in March with the XJO up +0.35%.  In February, XJO was down -2.92%

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 54.31.  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 -0.32%.  The previous week it was down -0.54%.  So down side over the past two weeks has been modest.

This week saw good buying during the week to erase most of the early losses.

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

8-Week EMA and Hull MA13 turned turned down, which is bearish. Supertrend continues to provide support this week.  Events overnight on Friday in America could see a break to the upside.   

Weekly RSI is at 54.2 - bullish but falling.  

XJO Daily Chart.

This week, XJO was behind the eight-ball with a big fall on Monday.  It has been up three of the past four days.

My shortest term moving average is the Hull MA13.  It turned down on the 9 Feb.  It has now turned up, so the down-trend could be ending.

I'd like to see the index finish above the 8-Day EMA (grey line) before feeling confident that the short-term trend has turned up.  That seems likely to occur on Monday, given events in the U.S. on Friday night.

Weekly Changes in Sectors.

Breadth was poor this week, with only two sectors pushing to the upside - but those two sectors did extremely well, Energy +5.19% and Materials +3.98%.

Financials, the biggest sector in the ASX, was down heavily -2.88%.  It has been doing very poorly in recent times, but could be coming to the end of its pull-back.

On the Thursday, XXJ fell heavily taking its RSI down to 26.6.  We rarely see the RSI for XXJ get below 30 before we get some sort of a rebound.  Watch XXJ on Monday for some good news for our market.

Gold Miners.

XGD (Gold Miners) was one of the stand-outs this week, up +6.42% after being down five weeks in a row.  The bullish engulfing candle for this week suggests more upside for the Gold Miners.  It has also bounced off support of the 50-Week MA - another bullish sign.

NewHighs-NewLows.

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

NH-NL pulled to the upside this week, with the 3-Day MA rising sharply.  The 3-Day MA needs to get back above the 20-Day MA for long-term investors to feel comfortable about their investments.  Until that happens, 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 for medium term investors to remain bearish on stocks while this chart remains below zero.  If you're a bit cheeky, you might go long if the chart rises above the 10-Day MA.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 44%, This Week 40%.  

2.  % of stocks above 50-Day Moving Average, Last Week 56%, This Week 55%.  

3.  % of stocks above 200-Day Moving Average, Last Week 65%, This Week 61%.

The longer term measures remain above the 50% mark.  So the market is not in bad shape.  Short-term I'd like to see Stocks above 10-DMA move back above 50%.

SP500.

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

The past two sessions on the SP500 have seen strong upside moves.    Friday saw a rise of +1.61%.  That triggered a number of bullish indicators.  

Thursday saw the SP500 bounce strongly off the 200-Day MA - that's a bullish indicator.  Friday saw the index cross above the 8-Day EMA, and the Supertrend changed from blue to yellow - bullish.  Hull MA13 has turned up - bullish.

This looks like the start of a good short-term upside rally.

 

Conclusion.

 

A lot of jig-saw pieces are falling into place for our market in the coming week.  SP500 has turned short-term bullish and we should follow suit on Monday.

Finspiration Australia.

 4/3/23.  Finspiration Saturday Morning Report.

XJO up Friday.  Overnight in the U.S., Stocks lift for second day.

XJO rose +0.39%

XJO has been up three out of the past four days.  Advance has been turgid.  The index hasn't been able to break above the 8-DEMA.  Perhaps that will change after events overnight in the U.S.

U.S. Indices.

Dow Jones +1.17%.  SP500 +1.61%.  Nasdaq +1.97%.  Small Caps +1.14%.  Banks +1.92%.

SP500.

Friday saw follow-through buying after Thursday's bullish candle.  The chart is now above the 8-DEMA - that provides a move to a short-term upside trend.

The chart is now into the "neutral zone" where we might see some consolidation.  While the index remains above the 8-DEMA - stay with the trend.  

Commodities Index up, Base Metals flat.

Commodities Index +1.58%.  Energy +2.35%.  Base Metals -0.05%.  Agriculture +1.59%.  Gold +1.07%.

In New York, BHP was up +1.29%, Rio up +1.95%.

Bitcoin.

Bitcoin down -4.99% overnight.  That was a break to the downside of the consolidation zone.  There might be a bit more downside before another move up.

The 50-Day MA has crossed above the 200-Day MA which would complete a "Golden Cross", a bullish event.

Finspiration Australia

   12/2/23.  Weekend Report - The Week That Was.  Week Ended 10/2/23.

This week has seen a dramatic change in investor sentiment.  The previous week, the market was all gung-ho and seriously overbought.  This week, investors sobered up and a pull-back has started.

XJO Monthly Chart.

We've only had ten days so far in February.  XJO down so far -0.58% 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 10-MMA, Hull MA13, 50-MMA, 200MMA, Supertrend (7/1.5).  Not much damage done yet.

  

Monthly RSI is at 56.57.  50 represents the dividing line between bullish and bearish.

XJO Weekly Chart.

                                            

In the past five days, XJO fallen -1.65%.  

The weekly chart shows a bearish engulfing candle.  That's occurred at a major resistance zone.

Candlesticks are a graphic depiction of buying and selling in the market.  A big dark engulfing candle shows the sellers were in complete control of trading this week.

8-Week EMA, Hull MA13 and Supertrend remain in bullish configurations, so not a lot of damage done yet.

Weekly RSI is at 60.58 - bullish but falling.  

Stochastic was showing a negative divergence and has now turned down below its signal line.

XJO Daily Chart.

XJO was in a strong up-trend in January.  That's all changed now.

Daily RSI is now at 53.71 - that's well below the weekly RSI of 60.58.  A fall by the Daily RSI below the Weekly RSI is indicative of a pull-back.  That's not something to trade from - but a filter to alert you to look at the charts and trade the charts.

Daily RSI remains above the bullish level of 50.

The indicator overlays on the chart (8-DEMA, Hull MA and Supertrend) all indicate the dramatic nature of the reversal that's occurred in the XJO.

STW Daily.

XJO can be a bit deceptive on a chart as it always opens at the same level as the previous day's close.  Never any gaps on an XJO chart.

STW is a tracking ETF for the XJO and can often give clues as to investors' thinking not available from the index.

The above chart shows a big gap opening to the down-side on Friday and breaking below key indicators (8-DEMA, Hull MA and Supertrend).  That's a key sign that a trend reversal has occurred.

Of course, the market always tries to play with the minds of investors.  Looking at the right hand side of the chart, an investor might think that further downside is immediately probable.  But looking at the left hand side of the chart shows a key support at 67.08.  STW closed at 67.07 on Friday - so we might get some upside here before another move to the downside.  

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

This week's chart:

In the week prior to this now, five sectors out of eleven were 70 RSI.  Now there are none, with only one sector above 60 - XXJ - but it is also in pull-back mode.   

Bullish sectors with RSIs arranged in ascending order are:  XDJ, XIJ, XSJ.  In the previous week, eight sectors were bullish.  That's a big change in breadth.

Sectors in pull-back mode (Daily RSI falling below Weekly RSI) XXJ, XMJ, XEJ, XTJ, XHJ, XUJ, XPJ and XNJ.  That's eight out of eleven sectors.

Gold (an industry group within XMJ) is in pull-back mode. 

On the daily time-frame, we've switched from eight out of eleven bullish sectors, to eight out of eleven sectors in pull-back mode.

NewHighs-NewLows Cumulative.

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

NH-NL Cum is represented by the blue line.  It is now marginally above the 10-DAY MA but remains well above the 21 and 34 Day Moving Averages.  The Moving Averages are all aligned in bullish fashion from 10DMA at the top, then 21, then 31.  This provides a buffer against pull-backs.

I've developed another long-term metric "StrongStocks-WeakStocks" which is similar to NH-NL but gives signals a little earlier than NH-NL  SS-WS is up for the 13th week in a row and has moved well above its 5-Week MA.   This week there were only 6 Strong Stocks compared to 34 the previous week.  Weak stocks remained at four.   While this remains above its 5-Week MA, long-term investors can remain calm.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 67%, This Week 26%.  

2.  % of stocks above 50-Day Moving Average, Last Week 78%, This Week 61%.  

3.  % of stocks above 200-Day Moving Average, Last Week 76%, This Week 71%.  

All metrics have pulled back, but only the shortest time-frame one is showing bearish tendencies.  At this stage, we are seeing a pull-back and nothing more serious.

Stocks above 200-Day MA have fallen from 76% to 71% but remain above the 5-Week MA.

 

Conclusion.

 

Daily chart of XJO was in a strong uptrend.  That has now reversed to the downside.

STW (ETF for XJO) suggests we could see some consolidation here or some upside in the near term.  

Overall, however, investors' mind-set has now taken a turn for the worse.  Expect more downside before this pull-back is over.