Weekly Wrap - Week ending 2 September, 2022.

XJO Monthly Chart.

We have only had a couple of days action in the new month of September.  The monthly does, however let us see the broad picture for the XJO.

Both Supertrend Lines remain blue (bearish).  The chart remains below the 8-Month EMA which is heading downward, i.e. bearish.  Hull MA13 is headed down - bearish.

The XJO found support at the 50-Month EMA where it also found support back at the end of 2018.  The chart seems likely to head down for another test of the 50-MEMA.

In the very very long-term, XJO found support after its bear market of 2020 at the 200-Month EMA.  That looks like the support which might avoid a catastrophic fall for the XJO.

Weekly Chart.

The past five trading days for the XJO were poor with the Index down, -3.87%.  The chart is clearly bearish and has now turned down after five weeks of counter-trend rally.

XJO found resistance at the 50-Week MA.  Two Supertrend lines have turned blue - bearish.  Hull MA13 has turned down - bearish.

The Weekly Chart is now in sync with the Monthly Chart - both Bearish.

Daily Chart.

          

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

All three charts, Monthly, Weekly and Daily, are in sync - bearish.  Expect more downside until we see clear changes in trends.

SP500 Daily.

SP500 daily chart is bearish. On Friday, it attempted to rebound, opening on the high side, but overhead resistance of the 50-Day MA, 8-Day EMA and two Supertrend Lines proved too much for the SP500.  It finished well down on Friday, -1.07%

We can expect that to follow through to our market on Monday.

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.)

Nine of eleven sectors have readings below 50 - that is a sign of bearishness and weak breadth.

The two sectors with RSIs above 50 are Energy (XEJ, RSI 53.7) and Health (XHJ, RSI 51.23).  The worst performing sector was Materials (XMJ, RSI 34.46).  XMJ is now oversold.

Breadth:

    1. New Highs - New Lows 

This week New Highs average 16.4 on a daily basis.  New Lows averaged 31.  That's almost a ratio of 1:2 in favour of New Lows.  Not a good look.  Another sign of just how bearish our market has been this week. 

    2.  Strong Stocks - Weak Stocks Cumulative.

This is a metric of my own making.  All stocks on the ASX100 are rating on seven criteria.  Stocks positive on all seven criteria are rated "Strong".  All stocks negative on all seven criteria are rated "Weak".

This week we had four strong stocks and 16 weak stocks.

Cumulatively:

This chart remains below its Five-Week MA, which is a bearish reading.  This is a reasonable guide for medium term traders.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 48%, This Week 21%.

2.  % of stocks above 50-Day Moving Average, Last Week 64%, This Week 21%.

3.  % of stocks above 200-Day Moving Average, Last Week 38%, This Week 31%

Momentum on all three metrics slowed quickly this week.  They are getting close to the oversold position where we see numbers below 20%.  Any more falls in the coming week and contrarians will be looking for a rebound in the XJO.

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 in sync, all bearish

2.  Breadth has been poor, but the market could be getting down to a level where we will see a rebound.

3.  XHJ and XEJ have strongest momentum.  Look to strong stocks in those sectors.  Do your own research on stocks in those Sectors.  

4.  Historically, September is the worst month of the year, so any rebound will probably be sold into.

5.  RBA makes another interest rate decision this week.  Watch how the market goes after that decision is handed down on Tuesday at 2.30 p.m.  The current RBA Rate is 1.85%.  The market is expecting a rise of 0.5% to 2.35%.

Stay safe.

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

 5/9/22.  XJO up today, +0.34%.

Today was another narrow range day, if the index poised at the top of the Kumo Cloud.

It seems that the XJO is waiting on the RBA decision on interest rates tomorrow.

I'll also wait.  The decision is listed for 2.30 p.m. tomorrow.

Despite the positive result for the XJO today, breadth was poor.  Advances/Declines today were 589/853.  New Highs/New Lows 17/45.

Despite that negative pressure, XJO was up mainly on the back of resource stocks.  XEJ +4% and Materials +1.9%.  The only other sectors up, of 11, were Consumer Staples +0.2% and Utilies +0.2%

That's not a great scenario for further upside for the XJO.

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

 3/9/22.  Overnight, European stocks went up, American stocks went down. 

German Dax up +3.33%.  French Cac +2.21%.  Those big white candles on the DAX and CAC, coming at the end of a down-trend, suggest that the down-trend has ended.

Noooooooo! said the American Indices.

Dow Jones -1.07%.  SP500 -1.07%.  Nasdaq -1.31%.  Small Caps -0.85%.  Banks -0.81%.

Instead of bullish, big white candles on the two European Indices, the American Indices show dark, bearish engulfing candles.  That suggests more down-side despite the American Indices being very oversold.

Initially, the American Indices followed Europe higher, thought better of it, and fell heavily.

The only positive sector on the NYSE was Energy.

SP500

The bearish engulfing candle is clearly seen on this chart.  It is once again testing the Kumo Cloud as support.

Taken at face value, the bearish engulfing candle suggests more downside, but this may be a trap for the unwary.  The Index is very oversold, and at support, so the most likely move here is a short-term rebound, followed by more downside.

Commodities.

Commodities Index +0.68%.  Energy +0.81%.  Base Metals continued to slide, -1.7%.  Agriculture +0.34%.  Gold may have bottomed, +0.88%.

Yesterday in Australia.

XJO had a narrow range day falling modestly, -0.25%.  It has broken marginally below the 50-Day MA and is now into the Kumo Cloud.  Look for some consolidation or perhaps a short-term rebound as the XJO is very oversold.

Finspiration Australia. Chart Analysis for Australian and International Stock Markets

2/9/22.  Overnight in America, results were mixed.

Dow Jones +0.46%.  SP500 +0.3%.  Nasdaq -0.26%.  Small Caps -1.22%.  Banks -0.17%.

SP500.

Strong intra-day buying pushed the SP500 into positive territory, eliminating early losses.

The Index has found support at the Kumo Cloud.  That's promising, this could be the bottom of this pull-back.  We need to see further upside before being confident.

Commodities.

Commodities fell heavily overnight.  Commodities Index -2.14%.  Energy -2.15%. Base Metals -3.79%.  Agriculture -1.55%.  Gold continues in its bear market, -0.88%.

Iron Ore -8%.  

Those resource prices are going to put a dent in today's ASX numbers.

Overnight Oz Futures are up +0.3% which suggests a positive opening to today's ASX trading.  I think that might be a bit optimistic.


 

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

 1/9/22.  XJO down heavily today.

Today's movement takes the XJO down to its 50-Dy MA and the top of the Kumo Cloud.

Expect consolidation at this level.

BHP went ex-dividend today - that was a big drag on the market as BHP is the largest stock on the Oz market - but that doesn't explain today's drop although it did contribute.

Today, ten out of eleven sectors were down.  The only positive sector was Consumer Staples, up +1%.  A major contributo to that was EDV, up

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

 1/9/22.  Australian market down today.

XJO was down heavily today -2.02%

That takes the Index down to the 50-Day MA and the top of the Kumo Cloud.

We can expect consolidation at this level before the next major movement.

BHP was down today -7.6% as it went ex-dividend.  That was a drag on the market but doesn't explain the poor overall result.

Ten out of eleven sectors were down today.  The only sector up was Consumer Staples +1%.

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

1/9/22.  Overnight in America, stocks fall for a fourth session.

 Dow Jones -0.88%.  SP500 -0.78%.  Nasdaq -0.58%.  Small Caps -0.99%.  Banks -0.73%.

SP500.

The Conversion Line of the Ichimoku system has broken below the Base Line.  That's a "weak" sell signal.

The chart remains above the Kumo Cloud - the division between bull and bear market, but the chart is well below its 200-Day MA, so the long term trend is in doubt.

The Kumo Cloud near to the stock chart is very narrow, so it is likely to provide weak support to any move by the stock chart.  The most likely scenario is for the stock chart to break through the Cloud throwing the Index into a bear market.

Commodities.

Commodities are again weak.  Commodities Index -2.09%.  Energy -3.16%.  Base Metals -0.36%. Agriculture  -0.34%.  Gold continues in its bear market, -0.77%.  

After thirty minutes of trading on the ASX, XJO is down more than -1%.