27/7/23. Thursday Morning Finspiration Report.27/7/23,

 After 30 minutes of trading this morning, XJO is up +0.5%.  Reporting season in Australia is in full swing.  Notable this morning were Macquarie Bank and Rio Tinto.  Both are on the downside, MQG -4.4% and RIO -2%.

Overnight in the U.S., Federal Reserve raised interest rates +0.25% (as expected).  For the stock market it was a non-event.  At the time of the announcement the SP500 jerked higher but then settled back to where it was.

Dow Jones up for the 13th day in a row.  That's the best since 1987 - and we all know what happened that year.  If it is up for 14 days in a row - best since 1897 - that's the year the Great Depression of 1893-97 ended.  Draw your own conclusions, good or bad.

Overnight in the U.S.

Dow Jones +0.23%.  SP500 -0.02%.  Nasdaq -0.12%.  Mid Caps +0.5%.  Small Caps +0.69%.  Banks +1.88%.

Dow Jones is seriously overbought (no surprise) with an RSI at 75.2. 

SP500.

 

SP500 remains in consolidation.  The trend remains up - stay with it until otherwise indicated.

Since the low of mid-March, SP500 is up +19.9%.  During the same time, Australian XJO is up +7.3%. 

Commodities.

 Commodities Index -0.49%.  Energy -0.04%.  Base Metals -0.69%.  Agriculture -0.22%.  Gold continues its rebound off the 50-Day MA, +0.49%.

26/7/23. Wednesday Evening Finspiration Report.

 XJO finished well up today after lower than expected inflation figures came out at 11.30 a.m.  XJO finished up +0.85%.

XJO broke above an important horizontal resistance level today where it has failed on several recent attempts.

NewHighs-NewLows Cumulative.

This chart remains above its 10-Day MA.  This is a good guide for medium to long term investors.

Looking at the tea leaves suggests this move to the upside may not have too far to go.

A negative divergence is forming on the NH/(NH+NL),  That's had a good record of predicting changes in trend.

XJO/IAF is shown in the lower panel.  IAF is the ETF for Composite Government Bonds.

A divergence in XJO/IAF often precedes a change in the XJO.  Currently there's a negative divergence on XJO/IAF.  Watch for a fall in the XJO.

26/7/23. Wednesday Morning Finspiration Report.

 This morning after one hour of trading, XJO is up modestly +0.25%.  Trading is jerky ahead of the inflation data out later today.  Miners are leading again.  Lithium miners are rebounding from their sell-off and iron ore miners are also doing well.  The market remains unbalanced with three sectors up and eight down.

Overnight in the U.S., the Dow was up for its 12th day in a row.

 Dow Jones only just made it into positive territory +0.08%.  SP500 +0.28%.  Nasdaq +0.61%.  Mid Caps +0.19%.  Small Caps -0.07%.  Banks -1.61%.

The recent rise of the Dow has seen rotation out of Tech. and into Industrials.  That now seems to be switching the other way with the Nasdaq now taking over leadership.

SP500.

 

SP500 is in a short-term consolidation.  The trend remains up.  Stay with the trend.

Commodities.

 Commodities Index +0.37%.  Energy +0.28%.  Base Metals +2.18%.  Agriculture +0.04%.  Golda +0.56%.

CCI on the Energy (DBE) shows a clear negative divergence suggesting that the Energy market will fall.

Inflation figures due at 11.30 a.m.  XJO jumped at the news and is now up +0.7% (11.50),  Seven out of eleven sectors are now up.  Healthy.  Looks like the RBA will be on hold at its meeting next week.

25/7/23. Tuesday Evening Finspiration Report.

 XJO up moderately +0.46, breadth was poor.

 XJO remains in consolidation.

Three indices up today (XMJ, XEJ, XTJ) and one flat XNJ +0.03%.  That's not the picture of a healthy market.

 

25/7/23. Tuesday Morning Finspiration Report.

 Dow up 11 days in a row.  Best run in six years.  

Dow Jones +0.52%.  SP500 +0.4%.  Nasdaq +0.19%.  Mid Caps +0.11%.  Small Caps +0.61%.  Banks +1.71%.

SP500.

 SP500 is a broader market index than the Dow Jones which contains only 30 stocks.

SP500 is currently in consolidation and the trend may continue to the upside.  

The trend remains up - enjoy it will it continues.  Prepare for a pull-back.

Commodities.

Commodities Index +1.79%.  Energy +1.88%.  Base Metals +0.71%.  Agriculture +1.54%.  Gold -0.43%.

Strong commodity prices will sustain the ASX today.  

 

24/7/23. Monday Evening Finspiration Report.

 XJO  down marginally today. -0.1%.  Woodside at record high, up +2.34%.

The chart now shows a cluster of doji candlesticks at the top of the trend.

Hull MA13 has turned down.  That's the shortest term MA that I use.  It's about equal to a 5-Day MA.

No other indicators have turned down yet - but it only seems a matter of time.

Here's the chart for Woodside:

Woodside had a very strong day taking it up to an all-time high.  All-time highs usually get followed by more upside.

While Woodside was going higher, Lithium stocks were slaughtered.  Core Lithium was down more than -17%.  That took other Lithium stocks down, e.g., Latin Resources -13.8%, Sayona -11.8%.

Energy pushed up by Woodside was the best sector today +2.2%.  But Materials balanced that out with a fall of -1.41%.  BHP down -1.51%.

23/7/23. Weekly Finspiration Report

 

From Market Index: 

• 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.