Baron Rothschild. Buy when there’s blood in the streets, even if the blood is your own.
That's all very well for you Dear Baron. You lived in the 18th Century when revolutions occurred every week or so. French Aristocrats were losing their heads over a a piece of cake, and the good old Duke of Wellington had fun giving Napoleon a good thrashing, with the help of some mates from Prussia (they of the big Blucher Boots).
But, Baron, I live in Brisbane in the 21st Century - and we haven't had a revolution eval. A couple of skirmishes, yes. Like the Battle of Brisbane during WWII, when some Diggers took on a bunch of GIs because the GIs had oodles of money and pinched all the Shielas with presents of nylon stockings. Then there was the 70's when the big brave Coppers took pleasure in bashing some weedy looking Vietnam protesters, much to Joh's delight.
So - no, dear Baron, I haven't seen any blood in the streets of Brissie, not in my time.
That advice is simply the worst trading advice I have ever read.
Ignoring that - can we see if there are any buying opportunities right now for us poor benighted investors. Let's see.
Here's the current XJO Chart:
XJO Daily Chart.
This, at least, looks promising. XJO (down this week -2.24%) has fallen to a down-sloping support line. RSI is oversold and so is Stochastic. We could be on a winner here if we get a good bounce to the upside.
How is the American SP500 doing?
The Dow Jones is much stronger than the Ozzie XJO. It is way above its 200-Day MA and above the Kumo Cloud. That puts the chart in a bullish zone.
DJI has had a few days on the down side but that brings it to the Point of Control - the area where most volume has changed hands in recent times. PoC often acts as support. The chart is also close to the Base Line of the Ichimoku system - again - a level at which support often occurs. We need to see a bounce here.
Sector Performance this past week.
That's am ugly set of columns. Only one sector was up - XUJ (Utilities) +0.62%. Nine out of ten sectors fell >1%. The worst was XIJ (Info.Tech.) -3.81%. XIJ is a volatile sector - which provides good trading opportunities. In the longer term, XIJ is a strong positive performer (see below). This looks to me like a pull-back which might provide some good buying opportunities.
Change over the Medium Term and Long Term.
For longer term, I turn to the 52-Day and 52-Week Mansfield Relative Strength Indices.
52-Day Mansfield.
This chart compares the performance of sectors over the past 52 Days to the XJO. So XJO, being the base, shows as 0. The best performing sector over the past 52 Days is XIJ followed by XUJ.
Adrenalin junkies might look to Bitcoin (USD) which provides plenty of thrills and spills. Not for the faint hearted.
52-Week Mansfield
This compares the performance of sectors with the XJO over the past year (52 weeks). Again - XIJ is the stand-out sector followed again by XUJ. They are consistently performing well.
And the place to avoid - XHJ.
NewHighs-NewLows Cumulative.
This chart is a lagging indicator but trends fairly strongly. It is currently above its 10-Day Moving Average. Still bullish.
%100 Leader Stocks above 200/50/10 Day Moving Averages.
% of Stocks above the 200-Day MA - 47%. That's below the 50% mark - dividing line between bullish and bearish.
% of Stocks above the 50-Day MA - 26%. That's a very low reading, the worst since the big pull-back in Sept/Oct 2022.
% of Stocks above the 10-Day MA - 17%. That's the worst since Sept. 2022.
Those are very poor readings. So - maybe - just a little blood has been spilt. Enough? We'll have to wait and see.
Long-term chart of XJO
The last time we saw very low readings on % Stocks above 50/10 Day MAs was back in Sept/Oct 2022. That is shown on the above weekly chart of the XJO.
So there is a good chance of getting a counter-trend rally here - watch for a sharp upside reversal.
That's all for this week - stay safe.
