Wed. a.m. 15/12/21.  U.S. Stocks down for 2nd day.

Overnight:

Dow Jones -0.3%.  SP500 -0.75%.  Nasdaq -1.14%.  Small Caps -0.58%.  Banks +1%.

SP500.

SP500 finished down heavily but there was plenty of intraday buying (long lower wick on today's candle).  

The above chart is an Ichimoku Chart which has a variety of support and resistance levels.  SP500 today found support at the Tenkan Sen and Kijun Sen.  Trend Spotter remains bullish, but SP500 needs to bounce here.

(Ichimoku is a complex technical analysis system developed by a Japanese journalist who worked on the system for over 20 years before publishing in 1968.  Elements of the system can be found on Investopedia.)

Commodities.

Commodities followed stocks lower.  Commodities Index -0.89%.  Energy -1.33%.  Base Metals -1.08%.  Gold -0.93%.

Iron Ore -1.8%.

None of the above looks hopeful for our market today.  Overnight Oz Futures down -0.4%.

The American Federal Reserve will hand down a decision on interest rates tonight (Australian time).  The announcement may be a catalyst for movement in the American stock market.  With American inflation now running at about +6%, the Fed must be getting worried.

 Tue. p.m. 14/12/21.  XJO flat today.

XJO was flat today, down just -0.01%.  That was a creditable effort given the poor performances overnight from the U.S.

The long lower wick on today's candle shows intra-day buying.  XJO was down about -0.4% in early trading.

In the broader scheme, XJO remains in a choppy sideways consolidation.  Until we see a break-out from that sideways consolidation, it's best to hold fire.

 Tue. a.m. 14/12/21.  U.S. stocks retreat.

Overnight:

Dow Jones -0.89%.  SP500 -0.91%.  Nasdaq -1.39%.  Small Caps -1.71%.  Banks -2.29%.

Santa Rally on hold for now.

SP500.

Today's candle is a bearish engulfing candle which usually suggests more downside.  Plenty of support remains nearby, so this is probably a buy-the-dip time.

Commodities.

Commodities Index -0.49%.  Energy -0.96%.  Base Metals +1.1%.  Gold +0.25%.

Iron Ore +7.4%.

After 15 minutes of trading this morning, the market is down -0.45%.  The "big boys" that dominate the after-market auction were right again yesterday - they were getting out, pre-empting today's early fall.

 Mon. p.m. 13/12/21.  XJO had a positive rise today.

XJO up today +0.35%.

0.35% represents a modest rise.  The Index was up quite substantially at 4.00 p.m., but fell heavily in the after-market auction, down about -20 points.  That erased about 40% of the day's gains.  

After market action is not always a good guide.  So we'll take today's gain as a positive.

Barchart's Trend Finder is still registering "bearish".

Overseas markets, at this early stage, are showing modest gains with UK FTSE up 0.14%, German DAX up +0.15% and US Futures up 0.27%.  Those figures, this early in trading, don't guarantee any kind of positive action tonight.

Australian Market Weekly Analysis

  Weekly Wrap, Week ended 10/12/21.  XJO rises from crucial level

XJO Monthly Chart:

XJO peaked in August, 2021.  It has since fallen September-November, but is now resuming its bullish trend in December.  This is important as it is moving up from a crucial long-term level - the 8-Month Exponential Moving Average.  December tends to be a seasonally bullish month for the market, so we may see more upside.

XJO Weekly Chart:

The weekly chart shows a wide trading range which switched the weekly trend from up to sideways.  A break above 7479 should be bullish.  A break below the 50-Week Moving Average (blue, dashed, curving line) would be bearish.

Daily XJO chart:

This week, XJO had a strong week, +1.55%.  That strength was largely generated by action on Tuesday-Wednesday.  Tuesday was up +0.95% and Wednesday was the best day for many weeks when the Index rose +1.25%.  Inevitably, some exhaustion set in with the XJO pulling back on Thursday-Friday.  The XJO now rests on the 50-Day Moving Average.  A bounce off that should be bullish.  That seems likely after the American market showed strength on Friday night (our time). 

One Week Sector Changes:

All sectors were up this week, although Information Technology (XIJ) +0.03% only just made the grade.  

The two strongest sectors were both defensives, Utilities (XUJ) +2.86% and Consumer Staples (XSJ) +3.02%.  That shows, once again, some movement into defensives which we saw a couple of weeks ago.  This seems a bit odd as defensives tend to under-perform during inflationary expectations which most analysts are declaring.  

This may be a short-term aberration.  If inflation is ongoing, we should expect sectors like Materials (XMJ), Energy (XEJ) and Financials (XXJ) to do comparatively better.

NewHighs-NewLows Cumulative.

For long-term investors, this is one of the most important charts to watch.

The Cum NH-NL is now sitting just below its 10-Day Moving Average after a small rise this week.  A rise above its 10-Day MA would provide a re-enter signal for long term investors.   A similar indicator but reacting a little quicker than the CUM NH-NL is my CUM S-W chart.  It gave a re-enter signal this week.  

The indecisive nature of these two charts is congruent with the sideways trend noted in the Weekly XJO Chart above.  Sideways trends can produce whip-saws which are frustrating, but part of the nature of stock markets.

Stocks in the ASX100 above the 200-Day MA.

% of stocks in the ASX100 above the 200-Day MA rose this week from 57% to 60%.  That keeps it well above the bearish level of 50%.

Shorter time frames saw some dramatic rises.  For example, % of stocks above the 10-Day MA rose from a bearish 30% to 69%.  That's not so strong as to suggest that the market is overbought, so we should have more upside.

Conclusion: The XJO has been in a sideways trend for about three months.  The past week has shown promising signs of more upside.

We're coming into a seasonally favourable period - the fabled "Santa Rally" may be upon us this week.

It's important, however, to trade what you see not what you think.  Put ideas about "Santa Rally" to one side and watch the charts.  A bounce off the 50-Day MA early next week should be an important sign, but the XJO still has to break out of its sideways trend to prove its bullish credentials.   

Stock Market Analysis.

 Sat. 11/12/21.  SP500 hits new record.

Overnight:

Dow Jones +0.6%.  SP500 +0.95%.  Nasdaq +0.73%. Small Caps +0.02%.  Banks -0.2%

SP500:

SP500 reversed the bearish candle set on Thursday, broke above resistance and set a new closing record.  That's a bullish event.  Expect more upside.

Commodities:

Commodity Index +1.14%.  Energy +1.95%.  Base Metals -0.52%.  Gold +0.42%.

VIX.

VIX finished at 18.69.  Traditionally, 20 is considered the marker between bullish and bearish for the stock market.  VIX is now giving a bullish signal confirming the signal from the SP500.

BHP was up in the US, but down in little in the UK.  RIO had similar results to BHP, up in the US, down in UK.  Both stocks remain in up-trends.  Westpac and Woodside were both up in the U.S.

Our market should see a bounce off the 50-Day MA on Monday.

Australian Market Analysis

 Friday. p.m. 10/12/21.  XJO down for second day.

XJO down -0.42%.

This chart shows how choppy the market has been over the past three months.  Up, down, up, down, going nowhere.

We'll just have to wait and see how this plays out.