Weekly Wrap - Week ending 9 September, 2022.

XJO Monthly Chart.

We have only had a little over a week's action in the new month of September.  The monthly chart does, however, let us see the long term 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.

XJO was up this week, +0.96%, but still a long way from erasing the previous week's big fall of -3.87%.  The chart remains bearish.

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 in sync with the Monthly Chart - both Bearish.

Daily Chart.

XJO had a strong bullish reversal day on Thursday and we saw carry-through buying on Friday. That switched the two Supertrend Lines to yellow - bullish.  Hull MA13 has turned up - bullish.  Friday's action brought the XJO just above the 50-Day MA and 8-Day EMA.  Expect more upside until we hit some other significant resistance.  The next congestion zone is around 6980.  After that is the 200-Day MA.  The long term trend remains in doubt while the chart is under the 200-Day MA.

The Daily Chart is out of sync with the Weekly and Monthly Charts.  That supports the view that we will see more upside in the short-term, but selling will probably put a stop to the rally sometime at significant resistance.

SP500 Daily.

SP500 has had three days to the upside, our market has had two days to the upside.  So our market will probably have a third day up 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.)

Seven of eleven sectors have readings below 50 - that is a sign of weak breadth.

The four sectors with RSIs above 50 are Energy (XEJ, RSI 50.63), Health (XHJ, RSI 55.1) Information Technology (XIJ, RSI 54,64) and Materials (XMJ, RSI 50.93).  XMJ had a great week after recently under-performing,  XMJ up this week, +5.13%.   Financials (XXJ) was a significant drain on the market this week as that sector was down -0.88%.  

Breadth:

    1. New Highs - New Lows 

This week New Highs average 16 on a daily basis.  New Lows averaged 31.4.  That's almost a ratio of 1:2 in favour of New Lows.  Not a good look.  Another bearish sign for our market.  Until NHs can outpace NLs, long term investors should remain cautious.

    2.  Strong Stocks - Weak Stocks Cumulative.

This is a metric of my own making.  All stocks on the ASX100 are rated 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 9 strong stocks and 10 weak stocks.  That's more or less even pegging.

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 21%, This Week 54%.

2.  % of stocks above 50-Day Moving Average, Last Week 21%, This Week 41%.

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

Momentum on two metrics improved this week.  But breadth in the long term remains bearish.

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

Conclusion.

1.  Monthly and Weekly Charts are bearish, but the Daily Chart is out of sync - short-term bullish.  Expect the current rally to be sold into.

2.  Breadth hasn't been good. While Financials stay weak, there's not a lot of hope for a return to a bull market.  

3.  XHJ, XIJ, XMJ 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 interest rate announcement occurred on Tuesday.  The market expectations were met, so the announcement didn't have a lot of effect, one way or the other.

Stay safe.

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

 10/9/22.  Overnight in America, stocks rise for third day.

Dow Jones +1.19%.  SP500 +1.53%.  Nasdaq +2.11%.  Small Caps +1.91%.  Banks +0.85%.

SP500.

SP500 is in a short-term up-trend.  Chart is above the Kumo Cloud.  Supertrend (1.5/7) has switched to bullish (yellow) and last night SP500 rose above the Conversion Line of the Ichimoku system.

Indicators in the lower panes are all short-term bullish.

The Index remains below the Base Line of the Ichimoku system and the Lagging Span (Chikou Span) is still below the chart.

For a more confident medium-termassessment, I would like to see the Conversion Line above the Base Line and Chikou Span above the chart.

This remains a bear market rally.  I'd look to take profits if the Index fails again at the 200-Day MA.

Commodities.

Commodities had a great night last night.  Commodities Index +2.84%.  Energy +3.38%.  Base Metals +1.44%.  Agriculture +1.87%.  Gold +0.53%.

Yesterday in Australia.

XJO was up strongly on Friday +0.66%.

Supertrend (1.5/7) has switched to bullish (yellow).  The chart is at the Conversion Line but below the Base Line and the chart has nudged above the Kumo Cloud.

Stochastic has pulled up out of its oversold zone.  That's a "get set" signal.  "Go" should occur on Monday with strong overnight leads from U.S. Stocks and Commodities.  That will pull MACD Histogram above zero and RSI above 50.  

Again, like the SP500, I'd look to take profits if the index fails again at the 200-Day MA where it has failed twice recently in late August.

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

8/9/22.  XJO up strongly today.

XJO up today +1.77%, completely erasing the previous day's big fall.

The Index has plenty of overhead resistance which will be problematic for the Index.

After such a big surge today, expect tomorrow will be a narrow range day.  

Until the Index gets above the 200-Day MA (big black line) the long term trend remains in doubt.

Breadth was good today with ten out of eleven sectors on the upside.  The only negative sector was XEJ down -2.8%.  It had to contend with dual head-winds.  The biggest stock in XEJ is Woodside which went ex-dividend today.  Overnight, Energy was well down, so that was another drag on XEJ today.

Currently in overseas trade, US futures are sluggish.

Our market can expect a narrow range, indecisive day tomorrow.

 

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

 8/9/22.  Overnight, American stocks up, Nasdaq snaps seven day losing streak.

Dow Jones +1.4%.  SP500 +1.83%.  Nasdaq +2.14%.  Small Caps +1.81%.  Banks +2.18%.

SP500.

SP500 has found support at the lower edge of the Kumo Cloud.  We can expect some more upside, but plenty of resistance lies nearby.

Commodities.

Commodities Index -2.38%.  Energy -3.99%.  Base Metals -1.02%.  Agriculture -0.64%.  Gold +1.02%.

Iron Ore -0.4%.  Thermal Coal -2.5%.

Overnight Oz Futures are up +0.5%.  So we should have a positive day today, but resource stocks might be under pressure.

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

7/9/22.  Ozzie stocks fall heavily.

XJO down today -1.42%.

Today's move takes the Index below the Kumo Cloud - that's into bearish territory.

The Index is oversold with an RSI at 34.21.  So we might see a bounce in the next couple of days, but expect that bounce to be sold. 

Both resource sectors (XEJ and XMJ) were down more than -2%.  Financials (XXJ) was also weak -2%.

Breadth was poor with Advances +507, Declines -805.

We are in the dreaded month of September - historically the weakest month of the year.  Don't expect a lot of positive action.

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

7/9/22.  Overnight American stocks sink again.

Dow Jones -0.55%.  SP500 -0.41%.  Nasdaq -0.74%.  Small Caps -1.37%.  Banks -0.9%.

US Bonds fell.  10Yr Treasury Yields, for example, rose to 3.34%.  (Yields higher, prices lower).

SP500.

SP500 is sitting at dual supports, horizontal support and the support provided by the lower edge of the Kumo Cloud.  It is oversold with RSI at 34.18, so there is a good chance of a rebound at this point.

Commodities.

Commodities Index -0.59%.  Energy -0.89%.  Base Metals +1.03%.  Agriculture +0.25%.  Gold -0.58%.

Iron Ore is down -0.9%.  Thermal Coal -1.6%.

Overnight Oz Futures down -0.6%.  That suggests the ASX will have another weak day today.
 

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

 6/9/22.  Oz market down modestly 
today after RBA rate decision.

XJO fell after the RBA announcement, but the fall wasn't particularly large.  

XJO had been up early in the day's session, but then fell.  So the fall after the RBA announcement wasn't particularly important.

Breadth was neutral, with Advances at 658 and Declines at 668.  There's nothing in that.

The surprise today was the Information Technology sector which was up +0.7%.  Usually, XIJ tends to react negatively to interest rate rises.  Maybe there's a message in that.