Finspiration Australia

 Mon. p.m. 10/1/21.  Another indecisive day for the XJO.

XJO flat today - down just -0.08%.

We had intra-day buying today, but nothing much happened in the overall picture.

The index finished more or less on major horizontal support/resistance level.

This is a wait-and-see market.

Finspiration Australia.

    Weekly Wrap, Week ended 7/1/22.  Danger Will Robinson, Danger.

XJO Monthly Chart:

XJO peaked in August, 2021.  It fell September-November. December was a bullish month, XJO up +2.6%.  The Santa Rally came good as it usually does.  December took the XJO above the 8-Month EMA - a key EMA to watch for long-term investors.   

It's too early in the month to read anything into the monthly movement except to note that the XJO has found resistance at the August high.

XJO Weekly Chart:

The weekly XJO Chart shows a small rise this week of  +0.12%.  

This week's range was very wide - the widest in the past year.  This week's candle is a "long-legged doji" - representing high volatility and lots of indecision on the part of traders.  That's a dangerous situation for medium-term and short-term traders.  Great for day traders.

Also important - the chart finished back in the old trading range.  So we've had a false break of the top of the trading range.  That's another indication of danger.

Daily XJO chart:

The past seven days of trading have been characterised by extreme volatility, with the chart oscillating around a major horizontal support/resistance line (the top of the trading range shown on the weekly chart).

This is a dangerous environment for traders.  Wait for this to settle down - see if a clear trend develops with lower volatility

One Week Sector Changes:

This week saw four sectors up and seven sectors down.  So breadth was unbalanced.  Information Technology (XIJ) was the biggest loser, down -6.15%.  Information Technology has become a basket case.  In Australia it is one of smaller sectors, unlike America where it is the dominant sector.

Health (XHJ) continues to perform poorly, down -3.35%.

The best two performing sectors were Energy (XEJ) +4.27%% and Materials (XMJ) +2.29%.  Those two sectors are the two resource sectors - they tend to benefit from rises in inflation.  Utilities (XUJ continues its recent good performance, up this week +2.05%, another sector to benefit from inflation.  Financials (XXJ) was up +2.06% - XXJ tends to benefit from rising interest rates - a symptom of inflation.

We have a key theme arising in the above analysis - inflation is with us.

NewHighs-NewLows Cumulative.

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

The Cum NH-NL is now sitting above its 10-Day Moving Average after a flattening out for a couple of weeks.  The chart provides assurance for now for the long-term investor.

The Strong-Weak Stocks Chart dipped a little this week but remains above its Moving Average, providing a confirmation of the Cum NH-NL.  

The stats for this week were:  Strong Stocks +6, Weak Stocks +8,  on balance ST-WS = -2.  

Looking at the composition of each, there were four miners in the Strong Stocks (out of six),  there was a much more even spread of sectors in the Weak Stocks, two stocks from XDJ, two from XIJ, and one each from XMJ, XSJ, XHJ and XXJ.  So the unbalanced nature seen in the Sectors (above) becomes exaggerated in the group of StrongStocks/WeakStocks.

An unbalanced market often leads to the downside.

Conclusion: The XJO has recently experienced extreme volatility without making much progress to the upside or downside .  Indecision reigns.

Measures of breadth have shown evidence of unbalancing - often a sign of a down move.

Wait and see if a trend develops, hopefully with less volatility.

The Santa Rally was good for traders, but that is now over.  

Finspiration Australia

 Sat. 8/1/22.  U.S. stocks lose ground.

Yesterday in Australia.

XJO up +1.29%

The past seven days have seen extreme volatility with XJO breaking above and below major support/resistance at 7471.  On Friday, XJO finished at 7454, just below that key horizontal marker.

Thursday's extreme downside move suggests we could be in for more downside.

Overnight in America:

Dow Jones -0.01%.  SP500 -0.41%.  Nasdaq -0.96%.  Small Caps -1.11%.  Banks +1.6%

SP500.

Although SP500 lost ground it is continuing to hold at the 50-Day Moving Average.  The bias is, however, to the downside.  This could go either way.

Commodities.

Commodities Index +0.19%.  Energy 0.00%.  Base Metals -0.18%.  Gold +0.46%.

Junk Bonds.

Junk Bonds often give an insight into the sentiment of traders.  Risk-on - Junk Bonds rise.  Risk-off - Junk Bonds fall.  JNK is clearly giving signs of a Risk-Off environment.

Finspiration Australia

 Fri. a.m. 7/1/22.  US stocks lose ground.

Overnight.

Dow Jones -0.47%.  SP500 -0.1%.  Nasdaq -0.13%.  Small Caps +0.65%.  Banks +3.25%.

SP500.

Sp500 fell back to the 50-Day MA and opposite a congestion zone.  We'll probably get a bounce to the upside here.

Commodities,

Commodities Index +0.86%.  Energy +1.88%.  Base Metals +0.85%.  Gold -1.22%.

Iron Ore +2.3%.

After an hour of trading the XJO is up +1.4%,

Finspiration Australia

 Thu. p.m. 6/1/22.  Ozzie stocks dumped.

XJO down heavily today -2.74%.

We rarely see falls as big as this on the Australian stock market.  Today's fall is the largest seen in at least the past 200 days.  Something significant has occurred in the minds of our masters who control our market.

Having said that, we will, no doubt, be up tomorrow.  But don't expect any miracles.  A chance to sell out?  Probably.

No sector was immune today.  The best performing sector, relatively, was Materials (XMJ) -1.45%.  It held up because of the rise in iron ore prices overnight.  BHP +0.12%.  RIO +0.73%.  But FMG fell -1.05%

Finspiration Australia

 Thu, a.m. 6/1/22.  End of the Santa Rally.

Overnight:

Dow Jones -1.07%.  SP500 -1.94%.  Nasdaq -3.34%.  Small Caps -2.47%.  Banks -1.08%.

SP500.

SP500 is back to a major support level so we may see some consolidation here.   

Commodities.

Commodities Index -0.43%.  Energy -0.23%.  Base Metals 0.00%.  Gold -0.3%.

Iron Ore +2%.

After 30 minutes of trading this morning, XJO is down -0.9%.

Finspiration Australia.

 Wed. p.m. 5/1/22.  XJO falls modestly after Tuesday big rise.

XJO down -0.32%.

I'm no Elliott Wave Specialist, but a cursory glance at the pattern from 2 December suggests we're looking at a classic five wave impulse patter:  1 - Up, 2 - down, 3 - up, 4 - down, 5 up.  That's usually followed by a three wave corrective pattern.

Here's an idealised chart:

Maybe this all just technical analysis witch-doctors.  If it has any validity - then we might be in for a pull-back.

Statistically, the Santa Rally continues until the second trading day in January.  So we could be close to the end.

For a long time, I've pencilled in 6 January as a possible start of a pull-back for the market - just based on previous experience.

Let's continue to watch the charts and see how this pans out.