Finspiration Australia. Technical Analysis of the Australian and International stock markets.

 XJO fell today -0.78%

Today the XJO finished below both of the 200-Day MA and the 50-Day MA.

Today's range was less than the previous two days but still bearish.

The index is into oversold territory with RSI at 38.2 and CCI at 282.8.  So a bounce is possible.

A reversal might occur if more downside occurs with RSI near 30 and CCI above 300.

The only bright spots today were in resource.  Materials (XMJ) +0.19%, and Energy +0.97%.  

That could portend a move to the upside.  But, I'll wait.

Finspiration Australia. Technical Analysis of the Australian and International stock markets.

27/4/22. Overnight.

Dow Jones -2.39%.  SP500 -2.81%.  Nasdaq -3.95%.  Small Caps -3.01%.  Banks -2.58%.

The first glimmer of hope for a rebound is showing in the Banks, where the CCI is beginning to show a positive divergence.

Alphabet reported after the market closed.  It is down about -5% in after-market trading.  Microsoft also reported after the market closed.  Opposite story for Microsoft - up +6% in after-market trading.

SP500

Sp500 is now down to a major support level, where it's been three times before back in Feb-Mar.  The more times a support level is hit - the weaker it becomes.

This level could see some buying come back into the market, but we'll just have to wait and see if the level holds.

Commodities.

Commodities Index +1.37% rose on the back of an improved oil price, with Energy up +2.46%.  Base Metals -0.97%.  Gold +0.15%.

Iron Ore +0.4%,

Those IO and Energy prices might provide a cushion for Australian resource stocks today, but overnight Oz Futures remain gloomy, down -1.5%.

Finspiration Australia. Technical analysis of the Australian and Internation stock markets

 Weekly Wrap - Week ending 22 April, 2022.

XJO Monthly Chart.

March was a good month for the XJO, up +6.39%.   April is in a consolidation period, after three weeks it is down just -0.35%.  8-Month EMA and Hull MA13 have both turned bullish.  It's getting close to the end of the month of April, we're waiting to see if this bullish bias can hold for the rest of the month.  At this stage, it is looking promising.

Weekly Chart.

XJO was negative this week, -0.67%, reversing the previous week's positive move. 

It remains above the 8-Week EMA. Supertrend (1.5/7) and  Hull Moving Average remain bullish.  

The week's action was, however, bearish.  XJO hit resistance from the Aug., 2021 and Jan. 2022 highs and reversed sharply.  From the weekly high to the weekly close, that was a fall of about -2%.  That's significant.

Daily Chart.

We can see from the daily chart that the damage was done by Friday's action.  Friday took the XJO back below the 8-Day EMA and resulted in a bearish change to the Supertrend (1.5/7)

Using multiple time-frame analysis, Monthly and Weekly XJO remain bullish.  Daily XJO is now out of sync with the other two time frames.  Monthly and Weekly both remain above their 8-period EMAs.  Wait for all time frames to get back in sync before re-entering the market.

Relative Strength of Sectors - past 52 days.

This chart compares the performance of each sector against the performance of the XJO over the past 52-days.  Sectors above zero have outperformed the XJO over the past 52 days.  Sectors below zero have underperformed XJO over the past 52 days.  Six Sectors were up this week and three down. 

As a general rule, look for stocks in the best sectors and avoid stocks in the worst sectors.  For example, look to Utilities (XUJ), Energy (XEJ) and Consumer Staples (XSJ) for stocks to buy.  Avoid Consumer Discretionary (XDJ), Materials (XMJ) Information Technology (XIJ), Telecoms (XTJ) and Property (XPJ).  (Exceptions to that general rule could occur.)  XUJ is now very overbought and probably not a serious contender for current buying - look to buy the dip.

A big change has occurred in the past week with Materials (XMJ) moving from a most preferred group to a least preferred group.

Materials

Friday's action resulted in a break-down of market structure with XMJ finishing well below a major support/resistance level.  It is now down to the 50-Day MA, but given events in America on Friday night, that seems unlikely to hold.

New Highs - New Lows Cumulative.

NH-NL Cumulative is in a consolidation phase and has just tipped under its 10-Day Moving Average, that's a caution sign for long-term investors.  Further deterioration should be taken seriously.

For the past month, NH-NL Line has been in consolidation.  Previously it had fallen strongly from the January, 2022 high.  That means we have a negative correlation between NH-NL Line and the XJO which this week once again tested the January high.  That suggests that the internal strength of the market has been weakening - usually an indication that the market itself, although at a new multi-week high this week, will weaken further.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average, 56%.

2.  % of stocks above 50-Day Moving Average, 67%.

3.  % of stocks above 200-Day Moving Average, 54%.

All three are above 50% level - which confirms the bullish status of the ASX

Bonds versus Stocks.

At the end of the week, Stocks had an advantage over Bonds.  

The relativity has weakened with the chart now above its 10-Day MA.  That's not necessarily a bearish signal - it's just that bonds are doing a little better relatively in the past few days than they have in recent times.  Stocks are still the preferred option while the chart remains above zero.

Strong Stocks versus Weak Stocks.

Offence or Defence?

The above chart compares the performance of XSJ Consumer Staples (yellow and blue candles) with XDJ Consumer Discretionary (blue and grey candles).  

If consumers are confident about the economy, they are usually happy to splurge on big ticket, discretionary items - companies such as Harvey Norman, JB Hi-Fi and car retailers.  If consumers are not so confident about the economy, consumers tend to delay buying big ticket items.  

Consumer Staples are much more resilient to lack of confidence in the economy.  While they may delay purchasing a new refrigerator or Apple computer, consumers will still buy toilet paper and breakfast cereal.  In Australia, big retailers like Woolworths and Coles dominate the Consumer Staples market.

We can see in the above graph, that XDJ and XSJ were more or less in sync until February this year, when XSJ chart began to dominate the XDJ chart.  

That suggests that investors need to take on a more defensive posture than they had last year.

Conclusion.

1.  The monthly, weekly and daily charts are out of sync.  While they remain out of sync, it's best to wait till then are back in sync (all bullish) before committing more money to the market.

2.  XSJ/XDJ suggests a defensive posture in investments.

3.  Negative correlation between the NH-NL Line and the XJO may be predicting further falls in our market.

4.  Price action on Friday was bearish.

5.  Materials (XMJ) was one of the mainstays in our market for the past few months.  Break down in market structure of XMJ suggests that prop has been kicked away from under the ASX.

Finspiration Australia. Technical analysis of the Australian and International stock markets.

  23/4/22.  Yesterday in Australia.

XJO fell heavily yesterday -1.57%.  The magnitude of the fall suggests institutions are pulling money out of the market, so more falls can be expected.

   Overnight in the U.S.,  equities continued to fall

 Dow Jones -2.82%.  SP500 --2.77%.  Nasdaq -2.55%.  Small Caps -2.47%.  Banks -2.48%

SP500.

SP500 is now below the Ichimoku Cloud.  Look to sell rallies.

Commodities.

Commodities Index -1.91%.  Energy -1.96%.  Base Metals -1.62%.  Gold -0.97%.

NY Advances-Declines Cumulative.

NY A-D Line remains bearish.  Medium and long-term investors should stay defensive.

VIX.

U.S. VIX appears headed back to the top of its range, which means more falls in Equities.

Finspiration Australia. Technical Analysis of the Australian and International stock markets.

  22/4/22.  Overnight. U.S. equities fall after a good start.

Bearish engulfing candles on all indices.  Dow Jones -1.05%.  SP500 -1.48%.  Nasdaq -2.07%.  Small Caps -1.58%.  Banks -1.81%.

SP500.

At the opening last night in the U.S., SP500 was looking at a confident break-out to the upside, but then the big guys said "No!" and the Index fell for the rest of the session.  Despite the big fall, SP500 remains in its consolidation.  Some indicators are still bullish, some are bearish.  Wait.

Commodities.

Little movement in Energy again last night +0.04% overnight.  Commodities Index -0.14%%.  Base Metals +0.79%.  Gold was down but remains at 20-DMA support, -0.36%.

Iron Ore flat, -0.1%.

Overnight Oz Futures -0.9%.  This suggests a big fall at the beginning of trade in Oz today.

Finspiration Australia. Technical Analysis of the Australian and International stock markets.

XJO improved modestly today.

 XJO was up today, +0.31%, which is a modest rise.  The overall trend remains bullish.

It was an inside day - inside the range of the previous day, which indicates indecision.

The Index is knocking on the line of overbought.  The next movement is likely to be down.

BHP reported this morning, and, like Rio yesterday, its production report indicated a slow-down.  BHP was down -3.06%.  Rio also fell, down -1.64%.  

Finspiration Australia. Technical Analysis of Australian and International Stock markets.

 21/4/22.  Overnight.  Mixed results in the U.S.

Dow Jones +0.71%.  SP500 -0.06%.  Nasdaq -1.22%.  Small Caps +0.71%.  Banks +0.7%.

SP500.

SP500 remains stalled at nearby resistance.  It remains within its consolidation zone.  Wait for a break-out.

Commodities.

Little movement in Energy +0.12% overnight.  Commodities Index +0.11%.  Base Metals -0.77%.  Gold found support at the 20-DMA, +0.49%.

Iron Ore saw little movement, +0.1%.

Overnight Oz Futures +0.3%.  This suggests a modest rise at the beginning of trade in Oz today.

BHP and RIO fell sharply overnight in London after RIO's poor production report yesterday.  BHP -2.9%. RIO -4.8%.  Falls in the U.S. were less exaggerated.  In NY, BHP -1.23% and RIO -2.63%.  Those NY figures are more in line with falls in Australia yesterday, so they may not flow through to Australia.