Finspiration Australia

  19/3/23.  Weekend Report - The Week That Was.  Week Ended 8/3/23.

XJO Monthly Chart.

We've had nearly three weeks of trading so far in the Month of March.  This week saw a marked change in the March Monthly candle.  Last week it was sitting on the 8-Month EMA, XJO has now fallen well below the 8-Month EMA.  

This chart gives very slow signals - as they only take relevance at the end of the month.  But currently, the chart is not looking flash hot.

  

Monthly RSI is at 50.26.  50 represents a dividing line between bullish and bearish.  Its just hanging on the bullish side.

XJO Weekly Chart.

                                            

This week saw the XJO make a marked change in its characteristics.  Last week, XJO remained above its 50-Week MA (equiv. to 250-Day MA).  This week XJO closed below that key support/resistance level.

In the past five days, XJO fallen -2.1%.   We have now had six weeks of weekly losses.  This week did show some buying during the week.  (See daily chart below)

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

XJO Renko Weekly Chart

Renko Charts ignore time and only add a new "block" when a major change in Index price has occurred.

Renko Charts have an advantage in that they clearly show support/resistance levels.  

Using big round numbers, major overhead resistance existed at 7500, where XJO failed back in early February, this year.  It also failed at that level in April 22, Jan. 22 and November 21.  So there's plenty of history at that level.

XJO is now sitting on the first major level of support, very round figures 7000.  XJO closed on Friday at 6994.8

Given the turmoil in international markets, that support seems likely to fail, with the next major level of support at 6625.  About 375 points lower or -5.4% lower.

XJO Daily Chart.

XJO Daily Chart.

In the daily chart, we can see the importance of the 200-Day MA for the XJO.  Definite failure here will see the XJO go much lower.

On Thursday, the XJO closed below the 200-Day MA.  Friday saw a half-hearted effort to get back above the 200-DMA but failed, and printed an inside day.  If XJO opens on the downside on Monday (likely) we'll probably see much lower levels.

XJO is oversold with an RSI at 31.6.  A small positive divergence exists on the CCI, so that gives some chance of an upside move.

Weekly Changes in Sectors.

Health (XHJ) was the only positive sector this week, and it only just scraped over the line, +0.08%.

Worst performers were Energy -5.07% and Information Technology -3.23%.

Until we see Financials (XXJ -2.28%) and Materials (XMJ -2.58%) start to recover, there's not much hope for our market.

The Banking Sector in the U.S. was down -5.25% on Friday night.  That gives you some idea of how much Banks are on the nose in America.  Our banking sector is quite a different animal from the American one - but it won't be treated much differently in the current turmoil.

I couldn't believe what the European Central Bank did this week.  Despite the fact that falling bond prices were principally the cause behind the current loss in bank stocks, the ECB raised interest rates +0.5%.  Well - I guess that shows their determination to fight inflation - but at what cost?  The European banking sector fell 7%, the day the ECB raised rates by +0.5%.

NewHighs-NewLows.

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

NH-NL Cumulative started falling on 9 Feb.  It crossed below its 10-Day MA on 13 February.  Until this gets back above its 10-Day MA (blue line), its best for long-term investors to stay 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 crossed below the zero line on 17 February - confirming the bearish nature of the NH-HL Cumulative.

Until this chart gets above zero - stay defensive.

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 25%, This Week 19%.  

2.  % of stocks above 50-Day Moving Average, Last Week 47%, This Week 30%.  

3.  % of stocks above 200-Day Moving Average, Last Week 56%, This Week 50%.

Last time Stocks > 10DMA were below 20% (currently 19%) was in September last year, but it remained below 20% for three weeks before a bullish rally began.  Maybe two or three more weeks of gritting the teeth and hanging on?

 

Conclusion.

 

More banks in the U.S. and Europe have come under pressure since my last weekly report and the failure of SVB in America.  Until we get clear sings that the turmoil is over, it's best to stay defensive.

Stay Safe.

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