Finspiration Australia. Morning summary, 2/3/22.

 XJO once again defies a fall in the U.S. Market.  XJO was down heavily in the first half-hour but has since rebounded.  Now up +0.21%.  5-Day chart below.

But ... the market is very lopsided.  Energy up +3.62%.  Materials up +2.61%.  Then it tails off quickly.

Utilities +0.22%.  Health Care +0.06%.  Consumer Staples +0.07%.

Every other sector is down.  Real Estate, Financials, Consumer Discretionary all down more than -1%.  Communication Services down -0.99%.

The resource sectors are benefitting from the geopolical problems in Eastern Europe.  (That's a euphemism for WAR.)

Finspiration Australia. U.S. stocks fall overnight. 2/2/22.

 Overnight.

Dow Jones -1.76%.  SP500 -1.55%.  Nasdaq -1.59%.  Small Caps -1.9%.  Banks -5.72% (ouch).

SP500.

The three-day candle stick pattern (up,doji,down) suggests the short-term trend has now reversed to the downside.  There's just too much overhead resistance to think about going long this market.

Commodities.

Commodities Index +4.02%.  Energy +5.06%.  Base Metals +1.84%.  Gold +1.82%.

Commodities continue to benefit from fear over the geopolitical events in Eastern Europe.

Iron Ore +3.8%.

After twenty minutes of trading this morning, XJO is down -0.6%.

Finspiration Australia. XJO up strongly but suffers afternoon selling.

XJO finished up +0.7% today, but -0.8% off its high.

 XJO had a strong rise in the early part of the day but hit resistance of the 20-Day MA and Supertrend 7,1.5). That kept it below the recent consolidation zone - another set of resistances.

We have to see much more upside before we can consider bullish placements.

Growth Sector Information Technology (XIJ) benefitted today lower bond yields in overnight markets.  XIJ up +5.66%.

The Russian invasion of Ukraine remains an uncertain back-drop to Australian and international markets.

Currently, markets seem to be optimistic that the Ukraine situation won't derail economic and stock markets in the Western World.

Finspiration Australia. Mid-afternoon update.

 RBA holds rates steady.  XJO currently up +0.8%, down -0.7% from its high today.

For Day Trading, exit time for bulls was around 1.00 p.m Eastern Summer Time.

Finspiration Australia. Mixed results in U.S. after last 30 min. surge in prices.

 Overnight:

Dow Jones -0.49%.  SP500 -0.24%.  Nasdaq +0.41%.  Small Caps +0.41%.  Banks -1.31%.

SP500.

Despite the small drop last night, the short-term up-trend remains in place.  The index still has plenty of overhead resistance, but the Supertrend (7,1.5) has turned bullish - that's a good short-term signal.

Commodities.

Commodities Index +1.7%.  Energy +1.13%.  Base Metals +0.87%.  Gold +1.04%.

After ninety minutes of trading this morning, XJO is play ing catch-up with the U.S. from last Friday.  XJO now up about +1.3%.

Finspiration Australia. XJO up strongly today.

 XJO up today +0.73% after nudging into negative territory at 11.15 a.m.  Around 11.00 is often a rebound time for the XJO intra-day.

In context, today's positive result was not impressive.

The XJO remains in bearish conditions.  This remains a "sell-the-rallies" market.

The best performing Oz sectors are Energy (XEJ +1.3%) and Materials (+3%).  

Finspiration Australia. Weekly Wrap, week ended 25/2/22

     XJO was down this week.  Worst performance since October, 2021.

XJO Monthly Chart.

XJO has been in a down-trend since September, 2021.  

In January, the monthly chart gave a long-term sell signal for both the Supertrend (1.5/7) and the 8-Month EMA.

At the end of February (one day to go), the February XJO candle remained below the 8-Month EMA and below the Supertrend.   

I'd like to see the Hull Moving Average turn positive (blue dashes change to yellow dashes) before taking buy action.  For long-term investors - stay defensive.

Weekly Chart.

XJO was down this week, -3.1%.   It remains below the 8-Week EMA, the 50-Week MA and Supertrend (1.5,7).  The Hull Moving Average remains negative (blue dashes).  

Trends are down on all time-frames.  Stay defensive.

Daily Chart.

XJO on Thursday broke down from its consolidation zone.  That took it down to a minor Support/Resistance Zone.  Tuesday saw an early warning of further downside when the Supertrend switched from yellow to blue (bearish).

Friday's action in the U.S. suggests we'll see a big upside move on Monday which should result in a test of the recent large consolidation zone.

That will look promising for the market, but the XJO still has very strong resistance levels above the current level.  Stay defensive.

Sector changes this week.

Only three sectors were up this week.  Two of those were defensives.  Best was Consumer Staples (XSJ) +3.39%.  Utilies (XUJ) up +1.67%.  Energy (XEJ) +0.72% benefitted from supply disruptions due to the Ukraine/Russia crisis.  XGD (Gold Miners) which is an industry sub-group within Materials (XMJ) performed positively, up 1%.

The worst three performers were Consumer Discretionary (XDJ) -6.09%, Materials (XMJ) -4.59%, and Financials (XXJ) -4.31%.  XMJ and XXJ are the two biggest sectors of the market making up about 40% of the ASX, so it's no wonder the XJO was down heavily.

CIMIC which has been in a steep down-trend received a take-over offer which sent its price up >33%.  Nice for those long-suffering investors who held on to Cimic.

New Highs - New Lows Cumulative.

NH-NL Cumulative this week fell clearly below its 10-Day Moving Average.  Until we see a decisive move back above the 10-Day MA, it is best to stay defensive.  This is a good indicator for long-term investors.

Weakness in the NH-NL Cum is confirmed by my weekly Strong-Weak Stocks Cumulative chart.

S-W Cum tends to act a little earlier than NH-NL Cum, but NH-NL Cum has an advantage in being compiled on daily data rather than weekly data.

Bonds versus Stocks.

The Stocks/Bonds Ratio chart shows a small advantage of stocks over bonds this week.  Remember this is a relativity indicator - it doesn't mean that stocks did well - just better than bonds.  But there's not much in it.  The chart finished above zero (stocks doing better than bonds), but below its 10-Day MA, so any advantage for stocks is disappearing

Stocks above key moving averages - last week and this week.

A look at the number of stocks in the ASX100 above key moving averages provides an idea of how bad thins are.

ASX100 stocks above 10-Day MA:  Last week 43%.  This week 38%.

ASX100 stocks above 50-Day MA: Last week 39%.  This week 32%.

ASX100 stocks above the 200-Day MA: Last week 52%.  This week 28%.

Until we see all of these above 50%, it's best to assume we are in bearish conditions.

Conclusion.

Stock markets are faced with several head-winds.  Inflation is on the lips of most analysts.  With Inflation at multi-year highs, it seems inevitable that Central Banks will be raising interest rates.  That's a negative for growth stocks in particular which tend to be highly leveraged.  The market is also faced with the uncertainty of the Ukraine/Russia situation which may be reaching a conclusion, with Russian forces encircling Kyiv.

I'm inclined to remain defensive, having reduced holdings in bonds and stocks this past week.  

Good luck and good investing.