Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

  Weekly Wrap - Week ending 1 July, 2022.

XJO Monthly Chart.

We've had one day so far in July, which, on a monthly chart is irrelevant.  The chart is bearish.

XJO had its worst month in June since the March, 2020 bear market, down -8.92%  It was also the sixth worst in the past 30 years.  Three of those occurred in the bear market of 2008

Both Supertrend Lines have turned blue (bearish).  All indicators are on the bearish side.

Weekly Chart.

XJO had a positive week, up +1.6%.  The chart, however remains bearish.

The rise this week took the Index back up and is testing the 200-Week Moving Average.

RSI14 is oversold at 32.85 - but it has climbed from below 30 to above 30 - providing some hope of further upside.

XJO had an up-down week resulting in a "tombstone" candle.  These are often seen towards the end of a down trend.

Two Supertrend lines, 8-Week MA and Hull MA13 are all bearish.

Monthly and Weekly Charts are in sync - bearish.

Daily Chart.

                 

XJO had two up days and three down days this week.  It lies short-term between support and resistance, 6495 and 6764.

One Supertrend Line is blue and the other is yellow indicating a non-trending market.  Hull MA13 and 8-Day EMA are both bearish.  Stochastic has crossed back below its signal line.  On balance, the Chart remains bearish.

RSI (14) is at 35.95 - oversold.  I'd like to see that back above 50 before thinking about putting on some medium term long positions.

The medium and long-term trend remains bearish.

All three time frames are in sync - bearish.  Only take sell signals.  If there is a rebound, I'd look to sell the rally.

SP500 Weekly.

SP500 Weekly shows a falling wedge.  With positive divergences showing on RSI and CCI that provides us with the possibility of a sustained move to the upside.  July is often bullish.  Wait and see a break to the upside of the falling wedge.  

Sector Changes - past week.

Five sectors down this week, six sectors up.  Cyclical sectors were hard hit: Property, Information Technology, Consumer Discretionary and Materials.

The big news was in Gold Miners which an industry group, part of the Materials Sector.  Evolution Mining gave a disappointing production report and it fell -21.89% on Monday.  That reverberated through other miners like NCM and NST.  

Composite Government Bonds (IAF) were up again +0.34%.  IAF was up +2.21% the previous week.  Bond bulls seem to be saying that predictions about big increases in interest rates by central banks might be overstated.

Composite Bonds - IAF.

IAF (Australian Composite Bonds) had a sharp lift this week, up +2.21%.  

IAF is still a long way from its 200-Day MA, so we'll take this as a counter-trend rally

New Highs - New Lows Cumulative.

This is one of the important breadth indicators.  Unless breadth is solidly positive, the market is always under threat.

NH-NL Cumulative continues to fall and is now well under its 10-Day Moving Average, that's a big red danger sign for long-term investors.  

This metric trends very strongly.  As such it is a valuable guide to the long-term investor, but not much use to the short-term trader.

ASX Advance-Decline Line.

This is another important indicator of breadth.

ASX Advance-Decline Line is nudging its 10-Day MA line so there is some hope of a move to the upside.

A-D Line tends to react a little faster than NH-NL, so it might be a leading indicator.  Watch.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 50%, This Week 47%.

2.  % of stocks above 50-Day Moving Average, Last Week 19%, This Week 20%.

3.  % of stocks above 200-Day Moving Average, Last Week 19%, This Week 21%

There's not much change in these figures from the previous week.  That's consistent with the small fall in the XJO this week, -0.59%.

The other two longer-term metrics remain in bearish territory - both at 19%.

I'd like to see all of these above 50% to feel comfortable about the longer term fortunes of the market.

Conclusion.

1.  Monthly, Weekly and Daily Charts are all in sync - bearish.   Any rebound should be a signal to sell into the rally.  

2.  Breadth remains poor.  Until we see an improvement in breadth, long term investors should stay defensive.

3.  Bonds continued to rally this week - but remain well below the 200-Day MA.  Bonds are now in a long-term bear market.  Any rally will probably be a counter-trend rally

4.  SP500 technically shows signs of a possible rally.  July is often a bullish month.  Watch.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 2/7/22.  Yesterday in Australia.

XJO fell -0.43%

XJO has now been down three days in a row.  The chart is bearish on all time frames, short, medium and long term.  This is a market for traders, not for investors.

Overnight.  American Equities bounce higher.

Dow Jones +1.05%.  SP500 +1.06%.  Nasdaq +0.9%.  Small Caps +0.93%.  Banks +1.53%.

SP500.

SP500 bounced off support and remains in its short-term consolidation.  A test of overhead resistance seems likely.  Wait.

Commodities.

Commodities Index +0.49%.  Energy +1.64%.  Base Metals -0.67%.  Agriculture -1.96%.  Gold -0.08%.

The rise in Energy has come at the low end of a down trend, and under heavy volume.  That could be the end of the down-trend in Energy.

20-Year Treasuries (U.S.)

TLT (20-Yr) Treasuries up last night +0.83% (yields lower).

The past two session have seen strong intra-day selling (long upper wicks on candles), so Bond Bears haven't given up yet.

Last night's selling came as TLT hit resistance of the Kumo Cloud.  This might be the end of the short-term bullish rally - which is not a good sign for stocks.

U.S. is shut for Independence Day on Monday.  XJO usually pulls a surprise when U.S. is shut for holidays.  That could be up or down.  The next couple of days could be interesting in Australia.

Finspiration Australia. Stock Analysis for Australian and International Stock Markets.

1/7/22.  Overnight - U.S. equities finish lower.

 Dow Jones -0.82%.  SP500 -0.88%.  Nasdaq -1.33%.  Small Caps -0.39%.  Banks -1.64%.

SP500.

Last night, SPX fell below support then recovered to remain between support and resistance.  That provides some optimism that the next move will be to the upside.  Wait.

For the first half of 2022, SPX is down almost -20%.

Commodities.

Commodities Index -3.09%.  Energy -3.25%.  Base Metals -3.53%.  Agriculture -1.55%.  Gold -0.61%.

Iron Ore -0.1%.  Thermal Coal +1.6%.

Well - if all of the above doesn't say we'll be down today, I don't know what would.  But, for some reason I can't see, Overnight Oz Futures are up +0.2%.  Maybe it's because bond yields fell overnight (bond prices higher), which may have a positive effect on stocks today.  We shall see.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 30/6/22.  Financial Year finishes down almost -2%.

For first-half of 2022, XJO was down -11.8%.

Here's to a better second-half of 2022.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets

30/6/22.  Overnight.  Mixed results in the U.S.

 Dow Jones +0.27%.  SP500 -0.07%.  Nasdaq -0.03%.  Small Caps -1%.  Banks -1.05%.

SP500.

SP500 had a narrow range day and is stuck between support and resistance.  Wait.

Commodities.

Commodities Index -1.72%.  Energy -2.56%.  Base Metals -0.25%.  Agriculture +0.63%.  Gold -0.08%.

Iron Ore -0.1%.  Thermal Coal -3.4%.

Overnight Oz Futures were flat 0.0%.

It looks like a flat opening on the XJO.

In economic news, U.S. GDP contracted at a -1.6% year-on-year pace in the first quarter of 2022.  Jerome Powell, Chair of U.S. Federal Reserve Bank, reiterated its stance that the Fed's job is to prevent higher inflation, i.e. raise interest rates.  It seems to me that the U.S. is headed for recession defined as two quarters of negative growth.

Finspiration Australia. Chart Analysis of Australian and International Stock Markets.

 XJO followed U.S. down today -1.1%.

Eight out of eleven sectors were down.  Interestingly, one of the sectors on the positive side was Financials (XXJ +0.3%).  The worst sector was the interest rate sensitive Property (XPJ-4%)

I'm still expecting more downside.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets.

 29/6/22.  Overnight.  Big sell-off in U.S. tech stocks.

Dow Jones -1.56%/.  SP500 -2.01%.  Nasdaq -2.98%.  Small Caps -1.52%.  Banks -0.48%.

SP500.

The three-day candle-stick pattern (up candle, doji, down candle) is a classic reversal pattern.

It has happened at a strong resistance level, the Kijun Sen (Base Line).  That also coincides with the 20-Day MA (see thumb-nail chart above).

A reversal pattern occurring at strong resistance is usually reliable.  Look for a test of the recent low.

Commodities.

Commodities Index +1.19%.  Energy +1.13%.  Base Metals flat 0.00%.  Agriculture +0.44%.  Gold -0.16%.

Iron Ore +0.5%.  Thermal Coal +0.3%.

After 15 minutes of trading, XJO down -0.9%.  Those good commodity prices might soften the effect on miners and energy stocks.