Finspiration Australia. Overnight - Commodities down, stocks up.

 Overnight.

Dow Jones +2%.  SP500 +2.57%.  Nasdaq +3.59%.  Small Caps +2.11%.  Banks +4.15%.

SP500. 

Yesterday's "tombstone'' candlestick suggesting the end of the pull-back played out today with a big upside move.  Expect a test of the most recent high at 4417.  SP500 finished at 4278 today.

Commodities.

The exponential rise in Commodities is over.  What normally happens after a big fall like this is we get a bounce and the "crowd" believes that the charts will go back up to new highs.  But the rug is pulled from under their feet by the "smart money" and you get a lot of trapped bulls, who must then sell as quickly as possible to avoid further losses, accelerating the downside move.

Commodities Index -7.94%.  Energy -11.2%.  Base Metals -8.37%.  Gold -2.97%.

I said recently that this rise would end badly - last night was just plain ugly.

Iron Ore -2.9%.

After 90 minutes of trading today, XJO up about +1%.  Energy and Materials have slumped, but Financials and Information Technology are doing exceptionally well.

Finspiration Australia. XJO up strongly today. 9/3/22.

 XJO up +1.04%.

Today's candle is a bullish engulfing candle which indicates more upside in the near term.

It is clear that XJO is in an indecisive sideways consolidation.  Until it breaks out above overhead resistance, it is best to consider any upside moves as counter-trend rallies.

We did see some bullish rotation today into recently less attractive sectors.  Financials (XXJ) up +1.53%.  Communication Services (XTJ) up +2.42%.  Information Technology (XIJ) up +3.19%.  Consumer Discretionary (XDJ) up +1.82%.

The recent darlings of the market haven't done relatively so well.  Energy +0.14%.  Materials +0.53%.  Those are positive figures but not nearly as good as the other figures above.

That augurs well if this trend continues.

Finspiration Australia. Nasdaq near to bear market territory.

 Overnight.

Dow Jones -0.56%.  SP500 -0.72%.  Nasdaq -0.28%.  Small Caps +0.38%.  Banks +0.63%.

SP500.

SP500 remains in bearish mode.  Last night's candle (tombstone) could signal the end of the current short-term downside movement.  We need to see an upside move in the next session to confirm.

Commodities.

Commodities Index +1.7% continues higher under pressure from Energy +2.98% affected by the ongoing war in Ukraine.  Base Metals had plenty of intra-day buying, down -0.22%.  Gold (safe haven) continued higher also, + 2.74%.

One day, suddenly, we'll see Energy and Gold reverse sharply.

Iron Ore -0.3%.

XJO started in negative territory this morning, but, after one hour of trading, is up about +0.7%.  That augurs well for the U.S. tonight.

Finspiration Australia. XJO down for third day. 8/3/22

XJO finished down -0.83%.

 XJO is now testing the most recent low.  That will probably result in a bounce here.

Plenty of overhead resistance remains, so any rally will be a sign to sell in to.

The only Sectors up today were Health (XHJ +1.*%) and Consumer Staples (XSJ +1.7%). The big push behind our market saw weakness today.  Energy(XEJ)  -3.6% and Materials (XMJ) -3.3%.  So the big money is switching out of the drivers of our market despite positive results overnight in Energy an Iron Ore.

Finspiration Australia. U.S. down overnight. Dow in correction territory. 8/3/22

 Overnight.

Dow Jones -2.37%.  SP500 -2.95%.  Nasdaq -3.62%.  Small Caps -2.29%.  Banks -4.62%

SP500.

SP500 down almost -3% - biggest down day for a long time

Positive divergences beginning to show up on RSI and CCI.  The American market could be close to a bottom.

Commodities.

 Commodities Index +2.18%.  Energy +2.95%.  Base Metals -1%.  Gold +1.49%.

Iron Ore +6.8%.  

XJO is performing relatively well this morning.  At 11.40 a.m ((AEST) the XJO is down just -0.12%.  Despite the big jump in iron ore, the two big iron ore miners are down, BHP -1.91% and Rio -2.53%.  The "Smart Money" must have smelt something in the air this morning to produce those falls.

Finspiration Australia. Weekly Wrap - week ended 4/3/22.

      XJO was up this week - not enough to be long-term bullish.

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.  January was brutal for the XJO.  A long standing adage of stock market pundits is:  As goes January, so goes the year.

Now, after the first week of March, the March candle remains 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 positive this week, +1.61%.   It remains below the 8-Week EMA, the 50-Week MA and Supertrend (1.5,7).  The Hull Moving Average remains negative (blue dashes).  

Stay defensive.

Daily Chart.

XJO had a good week this week.  Up four days in a row, but it ran out of puff on Friday.  Friday was not all negative, as strong intra-day buying restricted losses to -0.57%.  Resources had a particularly good week with Materials +8.14% and Energy +8.85%.  But that means the XJO was in an unbalanced state.  Unbalanced markets are easy to knock to the down-side.  That's unlikely to happen on Monday as Energy and Base Metals were both very strong on Friday night.  While the war in Ukraine remains unresolved, we can expect resources to continue doing well.  That might be enough to sustain our market from severe downside pressure and may result in gains.   

The short-term trend remains bullish but up against strong resistance.  Stay defensive - but stock picking might pay off.

Sector changes this week.

Only four sectors were up this week, and one of those (XNJ +0.13%) was essentially flat.  The outsized gains in Energy (XEJ) and Materials (XMJ) are clear in the above chart.

The worst three performers were Consumer Staples (XSJ) --1.64%), Financials (XXJ) -1.52%, and Property (XPJ) -1.77%.  

New Highs - New Lows Cumulative.

NH-NL Cumulative this week remains 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.  It remains below its 5-Week Moving Average.

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.

Advances-Declines Cumulative.

The dashed line in the above chart is the 20-Day Moving Average.  It shows a distinct down-trend.  Until this down-trend ends, stay defensive.

Bonds versus Stocks.

Despite the positive week in stocks, the Stocks/Bonds Ratio chart shows a small advantage for bonds over stocks at the end of this week.  But there's not much in it.  The chart finished just below zero (bonds doing better than stocks).  That sends a clear message to stay defensive.

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 28%.  This week 38%.

ASX100 stocks above 50-Day MA: Last week 32%.  This week 37%.

ASX100 stocks above the 200-Day MA: Last week 38%.  This week 37%.

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

Conclusion.

Despite the solid gains this week, the Australian market looks weak.  Measures of breadth are all indicating weakness in the broad market, it was only strength mainly in Energy and Mining that resulted in a positive week this week.  While the Ukraine war continues, Energy and Mining are likely to sustain our market, or, at least, prevent severe losses.

While internal measures of breadth remain weak, stay defensive.  

Good luck and good investing.

Finspiration Australia. U.S. stocks down, safe havens up. Sat. 5/4/22

 Yesterday in Australia.

Yesterday, XJO was down -0.57%.

Overnight.

Dow Jones -0.53%.  SP500 -0.79%.  Nasdaq -1.66%.  Small Caps -1.36%.  Banks -3.41%.

Huge falls overnight in Europe with the STOXX600 down -3.56%.

SP500.

Short-term, SP500 remains in non-trending, consolidation mode.  Longer term, SP500 remains bearish.  Wait.

Commodities.

Commodities Index +4.21%.  Energy +6.73%.  Base Metals +2.2%.  Gold +1.5%.

The current exponential rise in Energy and Base Metals is unsustainable.  Where it will end is unknown, but it will end badly.

Safe Havens:  Bonds and Gold.

20-Year Treasuries (TLT) up strongly +1.73%, but it appears to be in a short-term counter-trend rally.  Overall it appears to be bearish - probably because of the threat of the Federal Reserve raising interest rates.

Gold  is in a strong up-trend +1.59%, and shows no signs yet of reversing to the downside.

While the Ukraine situation dictates uncertainty in the markets, Bonds and Gold will probably continue higher.

NY Advances-Declines Cumulative.

New York NH-NL Cumulative peaked in early November.  The negative divergence from the SP500 Nov.-Jan. predicted the decline in the New York market.  Until this indicator returns to an up-trend, it's best to stay defensive.