Finspiration Australia. Chart Analysis for Australian and International Stock Markets

17/8/22.  Yesterday in Australia.

XXJO was up +0.58%.  This morning after 20 minutes, XJO is up +0.14% after starting on the negative side.

The short and medium term trends remain up.  XJO is still hovering under the 200-Day MA, which means that the long-term trend remains in doubt.
 

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

 16/8/22.  In Australia yesterday.

Yesterday saw a narrow range, inside day, resulting in a moderate rise in the XJO of +0.45%.

The medium and short term trends remain to the upside, but momentum is slowing.

The 200-Day MA remains as stiff resistance on the upside.

Overnight in America, early losses were erased to post moderate gains.

Dow Jones +0.45%.  SP500 +0.4%.  Nasdaq +0.62%.  Small Caps +0.36%.  Banks -0.2%.

SP500.

SP500 was up moderately, and now nudging up to the 200-Day MA.

RSI14 is overbought at 72.6.

Stochastic has been in its overbought range since 20 July - that's a long time to be sitting in that range.

The 200-DMA will probably cause resistance, but, while the medium and short term trends remain up, you have to stay with the trend.  That's what trend traders do, but I'm not optimistic about the near term future.  Be prepared to reverse.

Commodities.

Commodities haven't confirmed the bullish trend in Equities - that's not a good sign for the Australian market.

Commodities Index -1.23%.  Energy -1.77%.  Base Metals -1.29%.  Agriculture -0.69%.  Gold had a big fall and finished below the 50-Day MA, -1.29%.

Iron Ore -2.8%.  Thermal Coal flat, 0.0%.

After 25 minutes of trading, XJO is up +0.5%.  Energy is under pressure, -1.42%.  That's the only Sector at this stage which is in negative territory.

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

     Weekly Wrap - Week ending 12 August, 2022.

XJO Monthly Chart.

We are now into the second week of August, so too early to make definitive statements about a change in the trend.

Both Supertrend Lines remain blue (bearish).  8-Month EMA is headed down.  Hull MA13 is headed down.

  All indicators are on the bearish side.

The XJO has found support at the 50-Month EMA where it also found support back at the end of 2018.  This could be the start of a rebound, but with the seasonally weak months of September and October looming, any rebound is likely to be cut short.

Weekly Chart.

XJO was up this week, +0.24%.  The chart is bullish but, after four weeks to the upside, momentum is slowing.

The index has found support at the 200-Week MA and finished above its 10-Week EMA which is pointing up.  HullMA13 has turned up.  

Both Supertrend lines have switched from blue to yellow - bullish.

All of that is bullish.

Monthly and Weekly Charts are out of sync (Monthly - bearish, Weekly bullish) so we are seeing a trend change in the medium term.

Daily Chart.

          

Hull MA13, two Supertrend lines and 8-Day EMA are all heading to the upside - bullish.

The short-term trend is bullish but. 

Cautionary notes are entering this chart with negative divergences showing up on CCI and MACD Histogram.

The chart is approaching the 200-Day MA - that's considered a line between a bullish and bearish market.  It may provide stiff resistance to further upside.

SP500 Daily.

SP500 is bullish in both the Short-term and Medium-Term.  While it remains below the 200-Day MA the Long-term remains in doubt.

Like the XJO, this chart is giving out cautionary signals.  

Negative divergences are showing up on CCI and MACD Histogram, so the current up-trend is under threat from falling momentum.

RSI is at 71.67, overbought.  As SP500 is approaching the 200-Day MA with an overbought reading, it will find difficulty in breaking above the 200-Day MA.

Sector Strengths by RSI.

RSI (Relative Strength Index) is calculated using the default setting of 14 days - almost three weeks of trading.  It provides a more reliable guide to changes in sectors than the one-week results which can jerk around quite a lot and, thus, RSI is probably a more reliable guide to recent strength in the sectors. (Click here for a description of RSI.)

Eleven sectors have readings above 50 - which is taken as a sign of bullishness.  Overall, however, RSIs have weakened.  Only three sectors have readings above 60 down from six the previous week.  Momentum is slowing

The sector with the strongest momentum is, Financials (XXJ) RSI 67.24, down a little from the two weeks ago when it was above 70 (overbought).   Next best was Telecoms (XTJ) RSI 62.83, just a little ahead of Consumer Staples.  Note that two out of three of the strongest sectors are Defensives.

As a general rule, its best to follow strong stocks in the strongest sectors. 

In XXJ, the two strongest large cap stocks are BEN (RSI 69.23) and WBC (RSI 74.64).  Westpac is overbought and Bendigo is nudging on that level.

In XTJ, the two strongest large cap stocks are TPG (RSI 70.16) and REA (RSI 63.36).  TPG is overbought

Do your own research on those stocks.  I've only put up those stocks as examples of a general principle and not a recommendation.

There are other ways of looking at this.  For example, the biggest improver in XXJ was ANZ  where the RSI jumped from 54.52 last week to 67.6 this week.  The biggest improver in XTJ was REA,  RSI jumped from 55.76 to 63.36 in one week.

Breadth:

    1. New Highs - New Lows Cumulative.

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

The 10-Day MA of New Lows is now below the 10-Day MA for New Highs, but both metrics remain at very low levels.  Until we see a decisive kick up in New Highs, I think it is advisable to stay on the sidelines.

Here's the cumulative chart for NewHighs-NewLows:

This metric usually trends very strongly.  As such it is a valuable guide to the long-term investor, but not much use to the short-term trader.  It gave a timely signal to go long in May 2020, and a sell signal in January 2022.  That's a good run for the long-term investor.

At the moment, however, this Index is not trending strongly enough to say one way or the other.

If NH-NL Cumulative gives a new buy signal, I'll put that up on my blog during the week rather than wait for the week-end.

    2.  ASX Advance-Decline Line.

This is another important indicator of breadth.

ASX A-D Line tends to give medium-term trade signals compared to the longer-term signals for NH-NL.

The ASX Advance-Decline Line turned bullish at the beginning of July, predicting the good month we've seen for stocks in July.  At this stage it remains bullish.  It is, however, getting close to its 10-Day MA.  Watch for a turn-down below the 20-Day MA to predict a bearish reversal.

    3. Strong-Weak Stocks Cumulative.

This chart has turned bullish being above its 5-Week MA.    It is complementary to NH-NL and A-D charts. 

The Number for SS-WS has fall back to 8 after reaching 19 in the previous week.  Again, this is indicating a slowing in upside momentum

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 80%, This Week 47%.

2.  % of stocks above 50-Day Moving Average, Last Week 75%, This Week 75%.

3.  % of stocks above 200-Day Moving Average, Last Week 43%, This Week 43%

Short-term momentum (Stocks above 10-DMA) shows a slowing.  No change in the medium-term and long-term momentums.

If this trend continues in the 10-Day Figure, that will flow on to the 50-Day and 200-Day Figures.

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

Conclusion.

1.  Monthly, Weekly and Daily Charts are not in sync, one bearish, two bullish.   Stay with the short/medium term trends until other-wise indicated.

2.  SP500 Daily has been bullish in the short/medium term, but is approaching the 200-DMA and is overbought.  That's a recipe for a pull-back.   XJO is in a similar situation.Watch.

3.  Breadth according to Advances-Declines is improving but we still have to wait on NH-NL Cum to break clearly to the upside.

4.  XXJ and XTJ have strongest momentum.  Look to strong stocks in those sectors.  Do your own research on stocks in those Sectors.

5.  In the short-term, the market is losing momentum.  Momentum has to fall, before a reversion to the down-side occurs.

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

 13/8/22.  Yesterday in Australia.

XJO was down -0.54% with eight out of eleven sectors falling led by Property (XPJ -2.1%).  Energy (XEJ +2.3%) was the best performer.

The short and medium term trends remain up.  The long term trend remains in doubt while the chart remains below the 200-Day MA.

Stay with this rally while the medium and short term trends remain to the upside.

Overnight in America, stocks rose strongly led by Tech.

Dow Jones +1.27%.  SP500 +1.73%.  Nasdaq +2.09%.  Small Caps +1.95%.  Banks +1.28%.

Most of these indices are overbought with RSI14 above 70.

SP500.

SP500 is closing up towards the 200-Day MA.  With RSI14 at 71.67 (overbought), SP500 might find difficulty in breaching the 200-Day MA.

But, the short and medium term trends remain up - so stay with this trend until it has clearly ended.

Commodities.

Commodities Index -0.53%.  Energy -0.59%.  Base Metals -1.41%.  Agriculture +0.19%.  Gold +0.92%.

Gold has made a nice  bounce off the 50-Day MA.  Expect more upside.

The Australian market on Monday should follow the U.S. to the upside, but the weak Energy and Base Metals might put a cap on any upside move.

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

12/8/22.  Yesterday in Australia.

 XJO up +1.12% following the U.S. rally after easing CPI data.

Indicators suggest that yesterday's action may be a false break to the upside.

Overnight in America, mixed results after intra-day selling.

Dow Jones +0.08%.  SP500 -0.07%.  Nasdaq -0.58%.  Small Caps +0.64%.  Banks +1.6%.

SP500.

Negative divergences are showing up on MACD, its Histogram and CCI.  That's good evidence that the SP500 is due for a pull-back.

Commodities.

Commodities Index+1.94%.  Energy +2.78%.  Base Metals +1.03%.  Agriculture +0.93%.  Gold -0.26%.  

Iron Ore +1.6%.  Thermal Coal +0.6%.

Overnight Oz Futures -0.3%, that suggests a weak opening for the XJO this morning.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets

 11/8/22.  Overnight in America - Equities rise on CPI.

Dow Jones +1.63%.  SP500 +2.13%.  Nasdaq +2.89%.  Small Caps +2.21%.  Banks +2.9%.

The three major indices all had large opening gaps to the upside and then continued higher.

SP500.

I look at this chart with a jaundiced eye.

Large opening gaps to the upside, at the top of a trend, are often a sign that exhaustion is about to set in.  The FOMO emotion appears to be setting in,  with weak hands buying helter-skelter.  And we know who is selling to them - the smart traders.

I may be wrong, of course, with the next couple of days telling the true story behind the big up move last night.

Commodities.

Commodities Index +1.38%.  Energy +1.55%.  Base Metals, above its 50-DMA, up +1.5%.  Agriculture +1.34%.  Gold -0.25%.

Iron Ore -0.1%,  Thermal Coal +3.7%.

After 30 minutes of trading this morning, XJO is up +0.92%.

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

 10/8/22.  ASX market weakens today.

XJO was in negative territory all day today and finished down moderately -0.53%, near the lows for the day.

The short-term up-trend is now in doubt, but there is plenty of nearby support.

Tonight's CPI figures in the U.S. could be a market moving event.

Nine out of eleven sectors were down today - so breadth was poor.

The worst hit sector today was Information Technology (XIJ -3.8%). Financials (XXJ) did well, up +0.5%.  It is the biggest sector in the market and saved the XJO from a savage fall.