Saturday, July 22, 2023

23/7/23. Weekly Finspiration Report

 


  • Every US bear market of the past 73 years ended when the S&P 500 retook and held above its 200-day moving average for at least 18 days, according to Sentiment Trader.

    • As of 19th July, the S&P 500 has been above the 200-DMA since 23 March (that’s around 80 trading days ago). 

  • “Whenever this phenomenon has occurred, the market always rallied over the next three, six, and 12 months, with average 12-month returns of about 20%,” writes InvestorPlace.

 

XJO Daily Chart.


 

On Thursday, XJO printed a very tall Gravestone Doji Candlestick.  That's a bearish signal.  It came at a major horizontal resistance, which gives the signal added significance.  XJO retreated a little on Friday, down -0.15%.  The Index can expect more downside.  Watch for a break by the Dynamic Stochastic below its upper band to signal more downside.

Horizontal support exists at 7279.  XJO finished at 7314 on Friday.  So that first level of support is not far away.  If that fails, the next level of support seems to be the Kumo Cloud.  That's a dynamic support level but currently sits around 7234.  That is also not far away but could provide support - watch what happens around that level.

XJO was up +0.15% for the week.  Basically flat.

How is the American SP500 doing?

SPX has been doing much better than the Australian XJO.  
 
Below is a weekly chart of SPX with an Andrews' Pitchfork overlay.

SPX has been finding resistance at the Median Line of the Andrews' Pitchfork.  The possibilities lie to the downside.

Dynamic Zone Stochastic is showing a negative divergence and has fallen below its upper-band which reinforces the view that SPX will probably break to the downside.
 
The chart shows the 40-Week Moving Average which is equivalent to the 200-Day Moving Average referenced in the Introduction above.  That gives us a long-term bullish picture.

Below is a Daily Chart for SPX with a Standard Error Channel overlay.  The Channel starts at the major low of October, 2022.


The daily chart of SPX is now at the top of the Standard Error Channel.  Expect a pullback.  

The narrow range Doji Candlestick on Wednesday, coming at the top of a rally, probably indicated the end of the rally, at least in the short-term.

Sector Performance this past week.



XXJ (Financials) was the best performing sector, up +2.68% followed by XEJ (Energy) +1.16% and XHJ (Health) +1.14%.  
 
XGD (Gold Miners) which is an industry group within XMJ fell heavily -6.49% after rising the previous week a massive +9.84%.  Savvy traders using Technical Analysis can make good money in the Gold Miners, but it is not for the faint hearted.

The same can be said for XIJ (Inormation Technology) which was the worst performing Sector, down -2.45%.  XIJ fell heavily on Friday, down -2.73%, wiping out all of the previous four days' gains.  The quality of the fall in XIJ on Friday suggests that its up-trend has finished for the time being.

From its low in June 2022, XIJ has been up 55%.  So it's had a great run for over a year.


52-Day Mansfield Relative Strength.

 


The best performing Sector over the past 52 Days have been XIJ (Information Technology), but, as I mentioned above, its run may have ended.  Look to XXJ (Financials) to take over market leadership.

Here's the daily chart for XXJ with a possible scenario:

 


NewHighs-NewLows Cumulative.
 

 

NH-NL Cum bottomed at the beginning of July and is now in an ABCD bullish rally.  Longer term investors should remain invested while the chart is above its 10-Day MA.

 
%100 Leader Stocks above 200/50/10 Day Moving Averages.

% of Stocks above the 200-Day MA:  Last week 461%, this week 62%. 

% of Stocks above the 50-Day MA: Last week 67%, this week 60%. 

% of Stocks above the 10-Day MA: Last week 81%, this week 60%.  
 
% of Stocks positive on the Hull MA13:  Last week 67%, this week 45%.

Internals have weakened this week while the XJO made a small advance.


Conclusion.
 

XJO is at a major inflection point with a bearish tomb-stone doji candlestick appearing on Thursday right at a major horizontal resistance zone.  This may provide a buy-the-dip opportunity. 

SP500 may also be at an inflection point with the Index sitting at the median line of its Andrews' Pitchfork.

I am confident of a pull-back here which will likely be bought leading to another strong up-leg.  

Remember that September is historically a weak month.

 

Friday, July 21, 2023

22/7/23. Saturday Finspiration Report.

 Dow Jones only just made a positive session, +0.01%, but, up for 10 days in a row.  Best run since 2017.  SP500 just positive, Nasdaq down.


 
Dow Jones +0.01%.  SP500 +0.03%.  Nasdaq -0.22%.  Mid Caps -0.22%.  Small Caps -0.33%.  Banks -0.97%.

SP500.


 
SP500 remains in an uptrend but pulling back a little.  More downside is likely - with solid support at 4462.  SP500 finished this session are 4536.  So, about another 74 points downside seems likely.  That's only -1.6% from the current level.

Commodities.

Commodities Index +0.54%.  Energy +1.36%.  Base Metals saw plenty of intra-day buying, finished up +0.16%.  Agriculture -0.18%.  Gold -0.31%.

Gold has pulled back to the 50-Day MA - look for a bounce off that line.

ASX Futures are up +0.4%, so it looks like the Oz market will open on the high side on Monday off the back of improving resources.
 

Thursday, July 20, 2023

21/7/23. Friday Morning Finspiration Report.

 Dow Jones is indestructible - up for nine days in a row.  Nasdaq crumbles. Commodities up modestly.


Dow Jones +0.47%.  SP500 -0.68%.  Nasdaq -2.05%.  Mid Caps -0.52%.  Small Caps -0.79%.  Banks +0.69%.

SP500

This is the pull-back the market had to have - but Dow Jones didn't get the memo.

SPX remains in an up-trend.  The chart remains bullish - look to buy the dip.

Commodities.

Commodities Index +0.29%.  Energy +0.64%.  Base Metals +0.22%.  Agriculture +0.23%.  Gold -0.51%.

After fifteen minutes of trading, XJO is down -0.37%.  Health and Staples (defensives) are doing best while Information Technology is following the Nasdaq down.  XIJ -1.75%.
 
 

20/7/23. Thursday Evening Finspiration Report.

Big intra-day sell-off on the ASX today - probable end of the up-trend.

And now, for some reason I cannot fathom - I cannot load any charts to my blog.  Which means that any moment I shall throw my iMac through the window.  hmmm.  Settle down petal.

Today's candle, if you could see it, is a huge pipe-stack.  Or maybe, also described as a hypodemic needle.

It means that at the beginning of the day the XJO shot way up high, then spent the rest of the day going back to where it started.  Not a good sign.

That also occurred at horizontal resistance.  Not a good sign.

And it also occurred at the top of a lovely up-trend.  Another not good sign.

I guess you've got it now.  The market is going to go down.

Given that the Dow Jones has been up eight days in a row and its RSI is suffering vertigo from being up in the stratosphere (i.e., above 70) and you can conclude that the XJO is pre-empting a sell-off tonight in America.

Anyhow - that's how I see it.

And I still can't load a chart.  Damn.

 

Wednesday, July 19, 2023

20/7/23. Thursday Morning Finspiration Report

 Dow Jones up again - eight days in a row.


Dow Jones +0.31%.  SP500 +0.24%.  Nasdaq +0.03%.  Mid Caps +0.36%.  Small Caps +0.59%.  Another big day for the Banks +2.62%.

Intra-day selling is evident in today's candle for the Dow, so bears are becoming active in the market.

SP500.

 

SP500 remains in a strong up-trend.  

RSI is at 75 which is a bit too stretched to the upside.  Of course, it can go higher.

Plenty of support lies nearby - so any pull-back is likely to be bought.

Commodities.


 
Commodities Index +0.55%.  Energy +0.08%.  Base Metals -0.49%.  Agriculture +1.2%.  Gold +0.02%.

XJO this morning, at 10.45, is up strongly, +0.73%.

 

19/7/23. Wednesday Finspiration Report.

 ASX had another good day today.  XJO up +0.55%.

XJO continued its bullish rally today after two days of consolidation.

The index how has a higher high and a higher low - the definition of an up-trend.


XJO finished at 7323.7 today.  That's not far off a major horizontal resistance line at 7367.2.  That could cause the Index some difficulties.

Nine out of eleven sectors were up today, but one of the negative sectors was XMJ (Materials) down -0.56%.  That was more than balanced by the four big banks which were all up more than +1% today.

In early trading in Europe, UK FTSE is up +1.53% after inflation came in lower than expected.  Dow Futures are up +0.19%.

Let's see what tomorrow brings.

Tuesday, July 18, 2023

19/7/23. Wednesday Morning Finspiration Report.

 Unbelievable, Dow Jones up seven days in a row.  And, banks are going berserk.  (Did someone mention recession?  Daft fool.  It's Earning Season!  Let's party.)

Dow Jones +1/05%.  SP500 +0.71%.  Nasdaq +0.76%.  Mid Caps +0.94%.  Small Caps +1.4%.  Banks +3.03%.

SP500.

 


Blue skies above.  Nothing to worry about here.  Ignore the negative divergence on the CCI.  Ignore the RSI overbought at 74.  Ignore that big candle in the last session that went up on low, low volume.

Just buy, buy, buy.  (Not.)

Commodities.

Commodities Index +1.32%.  Energy +1.42%.  Base Metals -1.08%.  Agriculture +1.4%.  Gold +1.15%.

XJO today, after 45 mins. of trading, is up +0.68%.  Enjoy the party - don't worry about the coming hangover.
 


Finspiration Australia. 14/11/23. Tues. Morning Report.

Mixed Results in New York.  Energy up. NAB ex-dividend today. Dow Jones +0.16%.  SP500 -0.08%.  Nasdaq -0.11%.  Small Caps -0.07%.  Banks -0...