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

 10/10/22.  ASX falls heavily today after weak results in the U.S. on Friday.

          

Above is an Heiken-Ashi Chart for the XJO which shows the index reversing from previous highs.  That's confirmed by a turn down in the RSI and Stochastic.  Expect more downside.

Breadth was poor today with all eleven sectors losing ground.  Advances/Declines = 364/968.  Expect more downside.

                                   

                                                    

                         

                                                                                                                                             

 

                   

 

         

                                                   

                

     

             

                 

 

                                                                                                                                                                                                                                                                                    

                                                      

                                   

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

Weekly Wrap, Week ended 7 October, 2022.  Is the Bear finished?

XJO Monthly Chart.

XJO has made a good start to the month, but this is only Week One of October.  We take no action on the basis of this chart until the end of the month.

Currently, the chart remains in a down-trend despite the solid action in the past week.

XJO Weekly Chart.

 

XJO had a strong rally this week, up +4.46% and erased big losses from the previous two weeks.

This week's candle has crossed above the 8-Week EMA, albeit only marginally.  One of the two Supertrend lines has switched from blue (bearish) to yellow (bullish).  XJO has run into the resistance of the other Supertrend lines.

XJO Daily Chart.

 XJO was up strongly on Tuesday and Wednesday, but the action on Thursday and Friday suggests that momentum has waned.

The Index remains within the confines of the descending broadening wedge shown on the chart.  A break to the upside of that wedge would be bullish, but then it faces the resistance of the 200-Day MA.  As a general rule, it is best not to enter long-term positions while the chart is below the 200-Day MA.

Despite the good rally this week, the chart remains in a down-trend with lower highs and lower lows.

SP500 Daily.

 Friday in America was Jobs Report Day.  The jobs outlook was good - which was bad news for stocks because it suggested that the Federal Reserve had economic room to continue with their tough line on inflation.  So stocks sank.

The chart has now formed an Island Reversal pattern.  Candles for Tues/Wed/Thurs have been left isolated with gaps before and after those three days.  Such a pattern has a poor prognosis for stocks.

That big down day on Friday will almost certainly flow through to Australia on Monday, confirming the reversal of momentum suggested by action in Australia on Thursday and Friday.  

The Bear continues to live - for now.

ASX Sector Results for this week.

 Ten out of eleven sectors were up this week with some stunning results, led by Energy >10% to the upside.  Five sector rose by >5%.  Only one sector was down - Consumer Staples, and it was down only marginally -0.15%.  That sector was hampered by poor results in the two big retailers, Coles and Woolworths.

We often see such sharp rises during bear markets.  They can trap traders/investors into thinking that the bear market is over.  

Relative Strength of Sectors.

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.)

 Four sectors out of eleven are above 50:  Financials (XXJ), Materials (XMJ), Energy (XEJ) and Industrials (XNJ).  That is an improvement, however, from a couple of weeks ago when all eleven sectors were below 50.

This can be taken as a measure of breadth in the market.  With seven sectors below 50 and four sectors above 50, the market remains bearish.

NewHighs-NewLows Cumulative.

 

This is a metric for the long-term investor.  While NH-NL Cumulative remains below its 10-Day Moving Average, it is best to remain cautious and defensive regarding the market.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 13%, This Week 76%.  This result reflects the sharp upside rally seen in the ASX this week.  This is a short-term measure and is bordering on overbought.

2.  % of stocks above 50-Day Moving Average, Last Week 12%, This Week 26%.  This remains bearish.

3.  % of stocks above 200-Day Moving Average, Last Week 16%, This Week 21%.  That's an improvement but still bearish.

The long term metric (% Stocks below 200-Day MA) remains very bearish.  I'd like to see this above at least 40% before feeling comfortable.

Conclusion.

 

ASX experienced a sharp upside rally this week and one could be forgiven for thinking that the bear had been vanquished.  But action in America on Friday after the Jobs Report suggests the Bear is alive and kicking.

Stay Safe.

 

 

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

 8/10/22.  Overnight in America.  Indices retreat from 20-DMA.

Dow Jones -2.11%.  SP500 -2.8%.  Nasdaq -3.8%.  Small Caps -2.43%.  Banks -2.27%.

The Jobs Report came out at 8.30 a.m. NY time.  The jobs market remains strong.  The market didn't like what it saw, expecting no easing of interest rate rises, gapped down at the opening and kept going down.

SP500.

The 20-DMA resistance level has proved too much for the SP500.  It gapped down at the opening and continued its fall.  A test at least of the recent low 0f 30 Sept. seems assured.  Further downside after that is likely.

Commodities.

As usual, Commodities Index +1.05% was dominated by a rise in Energy +2.07%.  Base Metals -2.24% went the other way.  Agriculture flat +0.15%.  Gold -1.1%.

In Australia yesterday.

XJO down heavily yesterday, -0.8%.  It remains in its expanding, descending wedge, so another leg down seems likely.  

I'll be looking for a bounce about half-way down to the lower edge of the wedge.  If that happens we might see a break to the upside of the wedge.  Wait.

Bitcoin.

Bitcoin has retreated from resistance of the Supertrend (7/1.5).  Expect more downside.

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

7/10/22.  Overnight in America, Stocks were weaker.

Dow Jones -1.15%.  SP500 -1.02%.  Nasdaq -0.68%.  Small Caps -0.58%.  Banks -1.88%.

SP500

 SP500 recorded an "inside" day, i.e., the day's range was inside the range of the previous day.  That suggests indecision.

The past three days have recognised resistance at the 20-DMA and Supertrend 11/2.

The chart pattern looks like a bull flag.  If SP500 can get over dual resistance we should see more upside.

Commodities.

Commodities Index +0.63%.  Energy +1.37%.  Base Metals -1.47%.  Agriculture -0.44%.  Gold flat -0.11%.

After almost one-hour of trading, XJO is down -0.6%.  Only one sector is up, Energy +1.08%.  The past five days have seen Energy up more than +10%.

Bitcoin.

Bitcoin is in a short-term up-trend but running into trouble at resistance of the Supertrend (7/1.5).

If it gets over that (unlikely) it still faces resistance from the oblique restraining line from mid-August and then the 50-Day MA.  Nothing is impossible - but this looks a tough ask.

If you saw this Blog earlier today, no charts appeared.  That was a problem with Goggle Blogger which has now been resolved.

 

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

 6/10/22.  Oz Market barely moved today.

XJO finished up today just +0.03%.

Breadth was mildly positive, Advances/Declines = 719/613.  53.91%.

Sector balance was lopsided with five out of eleven sectors positive.  Energy led the advance +2.2%.  Utilities tagged along for the ride, +1.1%.  Other sectors on the positive side, but without conviction, were:  Industrials +0.1%, Info Tech +0.2% and Materials +0.5%.

The fast Stochastic on my XJO chart is at 97.41, overbought, so the easy money for this rally has already been made.  There might be more upside, but don't expect a lot.

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

6/10/22.  Overnight in America, major indices down modestly.

 

Dow Jones -0.14%.  SP500 -0.2%.  Nasdaq -0.25%.  Small Caps -0.63%.  Banks -1.2%.

SP500.

SP500 opened lower and continued to fall until 10.30 a.m.  10.30 a.m. is often a key reversal time for American indices.  It then rose steadily to be modestly up at 3.15 p.m., then fell into the close at 4.00 p.m.

SP500 has found resistance at the 20-DMA and the last of the three Supertrend lines I have on this chart.

The index must get over those dual resistances to maintain this rally.  Even then, it faces major resistance at the 50-DMA.

Commodities.

Commodities continued to rise strongly last night.  Commodities Index +1.79%.  Energy +2.78%.  Base Metals +0.79%.  Agriculture +0.6%.  Gold fell at the 50-DMA, -0.56%.

ASX has opened modestly lower this morning.  After 45 minutes of trading it is down -0.27%.  Only two sectors are up, Energy and Utilities.  Energy is up strongly.  Utilities often tags along with Energy, but is only up marginally.

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

5/10/22.  ASX up strongly today following good overnight results in America.

 XJO up today +1.74%, led by Information Technology +3.9% and Consumer Discretionary +2.7%.  Ten of eleven sectors were up.  Consumer Staples was down but only marginally, -0.04%.  Breadth was again strong, Advances/Declines = 884/494.

XJO is now close to the 50-Day MA and the upper restraining trend-line of an expanding wedge.  Tomorrow is likely to be up but those two resistances are likely to slow the market.