Finspiration Australia.

18/3/23.  Saturday morning Finspiration Report.

Yesterday in Australia.

XJO had a small rise yesterday +0.41%.  It remains just under the 200-Day MA and the 8-Day EMA.  

MACD Histogram is flat.  Downside Momentum has eased, while the trend remains down.  That means we could see an upside move - but not on Monday judging by the U.S. overnight.

Options expiry in the U.S overnight..  Stocks fall on heavy volume.

Dow Jones -1.19%.  SP500 -1.1%.  Nasdaq -0.74%.  Small Caps -2.76%.  Banks -5.25%.

Major European banks and regional banks in the U.S. continue to come under pressure.

SP500.

SP500 fell marginally back below the 200-Day MA and the 8-Day EMA.

MACD has switched to positive which suggests momentum is back to the upside.

Commodities.

Commodities Index -0.31%.  Index -1.49%.  Base Metals +0.67%.  Agriculture -0.1%.  Safe Haven Gold had a big upside spurt, +2.91%.

In the U.S. BHP was flat overnight +0.03% but remains in a steep down-trend, Rio was also flat, -0.09%.  Woodside rose, +0.39% but, like BHP, remains in a steep down-trend.

Bitcoin.

Bitcoin was up >8% overnight.  It has been above the 8-Day EMA since 13 March.  Stay with the trend until otherwise indicated.

Finspiration Australia.

 17/3/23.  Finspiration Friday Morning Report.

Overnight:  U.S. stocks rise strongly.

Dow Jones +1.17%.  SP500 +1.76%.  Nasdaq +2.48%.  Small Caps +1.65%.  Banks +2.57%. 

SP500.

SP500's big rise last night takes it back above the 200-Day MA and the 8-Day EMA.  It has also left behind the -1 SD on the Bollinger Bands.  It is now faced with the 20-Day MA as resistance so some shuffling could occur here, but the outlook is now looking bullish with the SP500.  

SP500 will also be looking at the Federal Reserve Interest Rate decision next week.  A 0.25% rise will probably be supportive, a 0.5% rise might see the market turn down.  Let's wait and see.

Commodities.

Commodities were mixed overnight.

Commodities Index +0.31%.  Energy +0.51%.  Base Metals -0.26%.  Agriculture +0.71%.  Gold +0.2%.

After an hour of trading this morning, XJO is struggling, up +0.2%.

Bitcoin.

Bitcoin up +1.44% last night.

Bitcoin continues to consolidate, digesting the big rise from a few days ago.  The trend remains up.

Finspiration Australia

 16/3/23.  Finspiration Thursday Evening Report.

XJO down heavily again today.

XJO down -1.46% today.

The chart remains straddling the 200-Day MA and down in the -2 to -3 SDs on the Bollinger Bands.  It rarely gets so extreme without a move to the upside. (See, for example, back in early Jan. this year.)

Health +1.5% and Telecommunications +0.4% were the only positive sectors today.  Only when we get the "biggies" like Materials and Financials showing positive numbers will we feel comfortable about the market.

Energy -4.8% and Materials -3.2% were the worst sectors today after Commodities in the U.S. fell heavily overnight.

European Stoxx600 is currently up +0.95%, which looks promising for our market tomorrow.  But - lot of water to go under the bridge before the end of trading.

Stay safe.

Finspiration Australia.

16/3/23.  Finspiration Thursday Morning Report. 

Overnight, more turmoil in European banks slump European and American stocks.

Dow Jones -0.87%.  SP500 -0.73%.  Nasdaq up marginally +0.05%.  Small Caps -1.66%.  Regional Banks -1.57%.

American indices were under the pump from the opening after Europe opened well to the down side after a Swiss bank reported problems.  Plenty of intra-day buying occurred in America with Nasdaq actually finished on the positive side.  I've included Regional Banks today (SVB was a regional bank) because that index is more sensitive to problems in the banking industry.  Last night saw heavy intra-day buying in KRX which is a positive, but not necessarily enough to indicate a reversal of the down trend.

SP500.

SP500 failed at the -1SD and the 200-Day MA.  It needs to get back above those two to have a chance of turning bullish.  It was, however, above the low of two days ago.

Commodities.

Fear gripped the Commodities market last night, as well as the stock market.  That's not a good sign for ASX big resource stocks today.

Commodities -2.33%.  Energy -3.95%.  Base Metals -2.66%.  Agriculture -1.1%.  Safe have Gold, of course, went up, +0.78%, but was under intra-day pressure.

Bitcoin.

Bitcoin is consolidating in the upper half of the BBs and remains above the 8-Day EMA.  While that state of affairs remains, the short-term trend is up.

Finspiration Australia

15/3/23 Finspiration Wednesday Morning Report.

 Dow Jones +1.06%.  SP500 +1.68%.  Nasdaq +2.14%.  Small Caps +1.98%.  Banks +3.2%.

SP500

SP500 gapped up at the opening and continued higher.  It has bounced nicely out of the congestion zone at the left of the chart.

It is now at major resistances, horizontal resistance from 2 March, 8-DEMA and 200 DSMA.

Above that are two Supertrend Lines.

Expect some tough going in the near term.

Dead Cat Bounce?

If this is a dead cat bounce, then I would expect SP500 to fail here at the -1 Standard Deviation shown by the yellow line.

Commodities.

Commodities Index -1.28%.  Energy -2.69%.  Base Metals -0.1%.  Agriculture flat 0.00%.  Gold -0.58%. 

After 25 minutes of trading - XJO this morning is up +0.7%. Financials are up >1%.  Energy is a drag on the market down -0.8%.

Bitcoin.

BTC had a huge rise on Monday night up about +20%.  That big move saw it bounce off the lower edge of the Kumo cloud and into bullish territory. It tried to carry through last night but faced concerted selling.  It is back now to support of the recent congestion zone.  Let's see if it can bounce here.

Finspiration Australia.

 14/3/23.  Finspiration Evening Report.

The charts below suggest that the "fear" has gone out of the banking sector trades which have dominating trading the past few days.

Huge volume for ANZ with plenty of intra-day buying.

CBA actually finish positive today.  +0.17%.

Up tomorrow?  Probably

 12/3/23.  Weekend Report - The Week That Was.  Week Ended 10/3/23.

XJO Monthly Chart.

We've had nearly two weeks of trading in March for the XJO, currently down -1.57%.  

So far, the Index is above 50-MMA, 200MMA, Supertrend (7/1.5).  It is sitting on the 8-Month EMA.  A monthly close below that would be bearish.

  

Monthly RSI is at 51/25.  50 represents a dividing line between bullish and bearish.

XJO Weekly Chart.

                                            

XJO remains in a long-term up-trend, with higher highs and higher lows, but the medium term has turned bearish with the chart falling below the 8-Week EMA and Supertrend.  Hull MA13 has turned down - a bearish signal and Weekly RSI has fallen below 50 - bearish.

In the past five days, XJO fallen -1.91%.  

XJO began to fall five weeks ago at a major resistance level.  

In very big round numbers, major weekly support is around 7000.  XJO finished at 7145.

XJO Daily Chart.

The shaded horizontal rectangle represents my preferred support zone for the XJO.  It is now down to that level.  No guarantees - the market can do whatever it wants to do.  If that zone fails, then the next important support level is the 200 Day MA, at 7010 - close enough to my big round number of 7000.

Last week, in my report, I stated:  This looks like the start of a good short-term upside rally.  Well, it turned into a very short short-term rally - up on Monday and Tuesday.  Then, on Tuesday night J. Powell took away the punch-blow with talk about raising interest rates for longer,  Wednesday saw the XJO fall -0.77%.  Thursday night in the U.S. news came out that a medium sized regional bank was failing, and the XJO fell on Friday, -2.28%.  Usually after such a big drop we get some sort of a pause, even an upside move, but the XJO has a lot of work to do to get back to short-term bullish.

Weekly Changes in Sectors.

The two worst performing Sectors were Materials -5.71% and Energy -6.13%.  Those two Sectors were impacted by very large companies (BHP, RIO and WDS) going ex-dividend.  But that doesn't explain all of the poor results in XMJ and XEJ.

Financials (XXJ) didn't help the bullish case by being down -0.83%.

So both of the two largest Sectors 9XMJ and XXJ). making up about half of the XJO. were down significantly.

Six out of eleven sectors were up, with Defensives figuring prominently in that group (XTJ, XSJ, XUJ).

Below is a Weekly Chart for XMJ (Materials).

Solid support lies in the zone 17400-17500.  XMJ finished the week at 17731.  So support is not far away.

NewHighs-NewLows.

This is a long-term indicator, but a good guide for long-term investors.

With two bullish days on Monday and Tuesday, the 3-DMA of NH-NL pushed back above the 20-DMA.  But the latter part of the week saw the 3-Day MA fall again below the 20DMA.  That's a sign for long-term investors to remain defensive.  

Stocks v Bonds.  Relative performance.

On a relative basis, Bonds are currently outperforming Stocks, i.e., the chart is below the zero level.  The chart is now below the level last seen in early Jan. this year. 

This is a reasonable picture of bullish and bearish status of the market.  It's probably a good idea for medium term investors to remain bearish on stocks while this chart remains below zero. 

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 40%, This Week 25%.  

2.  % of stocks above 50-Day Moving Average, Last Week 55%, This Week 47%.  

3.  % of stocks above 200-Day Moving Average, Last Week 61%, This Week 56%.

Last time Stocks > 10DMA were below 20% (currently 25%) was in September last year, which marked the start of a bullish rally.  So we may not be far off a "bottom".

 

Conclusion.

 

The failure of a medium-sized bank in the U.S. is the first since the GFC in 2008.  This event now becomes a "black swan" - an unpredictable event of serious consequences.

There is no way of knowing the severity of such an event.  It's probably best to wait a few days and see how this pans out.

I think we're not far off a "bottom" - but the market doesn't care what I think - watch what happens in the charts.