2/8/23. Wednesday Morning Finspiration Report.

Dow Jones continues to defy gravity, now up 16 of the past 17 days, but SP500 falls.

Sydney Futures -0.53% suggest the Ozzie market might be a bit soft today.

Dow +0.2%.  SP500 -0.27%.  Nasdaq -0.25%.  Small Caps -0.49%.  Banks -0.99%.

 SP500

SP500 is consolidating in a tight range.  Negative divergences on MACD histogram suggest the Index is headed lower.

Commodities.

Commodities Index -0.53%.  Energy -0.07%.  Base Metals -1.51%.  Agriculture +0.14%.  Gold -1.04%.

Gold remains in a short-term down-trend.

BHP overnight in the U.S. down -2.71%.  Rio -1.47%.  Woodside -1.86%.

The big news after hours is the downgrade by Fitch of the American rating to AA+ from AAA.

According to CNBC:  “In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025,”

Dow Futures are down -0.22%.
 

1/8/23. Tuesday Evening Finspiration Report.

In early trading, European stocks have opened lower.  STOXX600 down -0.35%.  American Futures are also down.  Dow Fut -0.22%.

In Australia today, RBA left interest rates on hold.  ASX jerked higher on the news then gave back a chunk with the XJO finishing up +0.54%.

 XJO remains in a bullish up-trend.  Stay with the trend until clear weakness is seen in the chart.

 All sectors were up today, with the best being Information Technology (XIJ), up +1.14%.

Gold Miners (XGD) was up +1.89%.

Here's the XGD chart;

Despite today's good result, the shor-term trend is bearish.  Today's candle finished at dual resistance - horizontal and the 50-Day MA.  XGD needs to rise above both of those and over come the resistance of triple Supertrend lines.  It might make hard work of that.

At this stage of proceedings it seems likely that the XJO will remain in consolidation mode tomorrow.  Sydney Futures are currently down -0.12%.

1/8/23. Tuesday Morning Finspiration Report.

 RBA rate decision later today.

After an hour's trading this morning, XJO has held in a narrow range and is up about +0.25%.  The range was set in the first thirty minutes of trading:  high 7440.3, low 7410.4.  A breakout of that range should see further rises or falls - depending on direction.

Best sectors are in the resources:  Materials +1.44%, Energy +0.91%.

Overnight in the U.S., major indices were up modestly.  Dow Jones +0.29%, SP500 +0.15%, Nasdaq +0.21%.

Chart for the SP500:

 SP500 remains in its long-term up-trend, but divergences on indicators suggest a pull-back is not far away.

Stay with the trend until clear weakness is seen in the chart.

Commities:  Energy +0.86%.  Base Metals +2.51%.  Gold was up +0.27% but showed intra-day selling.  Gold remains in a short-term down-trend.

From an Australian perspective, those good Energy and Base Metals are driving the Oz market today.

 

31/7/23. Monday Evening Finspiration Report.

 ASX started off well today but petered out as the day progressed.  XJO finished flat, up just +0.09%.  Energy was flat +0.00%.  Financials flat +0.02%.  Materials up a little +0.1%.

Best sector was Health, up 0.63%.   Worst sector was Staples -0.75%.

Here's the chart for STW, that's a tracking ETF for the XJO:

The chart remains in an up-trend but showing a lot of indecision with today's candle a "spinner".  Long wicks above a small body - that's indecisive - neither bulls nor bears winning the battle today.

Dynamic Zone Stochastic broke a little below its upper band today which suggests more downside. 

European Stocks in early trading are up a little, Euro Stoxx600 up just +0.09%,  Dow Futures up a little +0.07%.  Not much movement so far in overseas markets.

Tomorrow we head into August which historically been flat, average up +0.18%.  That, of course, leads into the worst month of the year - September.  So we can't expect much joy in the next couple of months - unless Central Banks decide to do a back-flip on interest rates.

30/7/23. Weekly Finspiration Report.

 

XJO Daily Chart.

 

On Thursday, XJO broke clearly above resistance.  Friday was a wide-range day with intra-day testing of the old resistance level - which has now become support.

XJO was up +1.23% for the week.  A good result for the week.  That upside surge looked shaky on Friday, but it held above support.

Weekly XJO Chart.

The old resistance level, broken to the upside on Thursday, had plenty of history going back to 2022.  Now that it's been broken, I'll be looking for a test of resistance at 7565.  XJO finished on Friday at 7404.  That's about +2.2% upside.   No guaranteed - it's just indicating a possibility.  A break below support (old Resistance level) and all upside bets are off.

How is the American SP500 doing?

January, 2023 was a strong month for the SP500, and it traded within that range until May, 2023.  Since then it has gone up an equal amount.  The range from March to May is about equal to the range from May to July.  That suggests that the current rally could be coming to an end. 

 

Below is a weekly chart of SPX with an Andrews' Pitchfork overlay.

 

SP500 has been in a strong up-trend from mid-March to the end of July.  SPX has been finding resistance at the Median Line of the Andrews' Pitchfork.  The short-term possibilities lie to the downside in an longer term up-trend.

I

should note that the ASX hasn't broken to the upside of its January range and is currently at an important Fibonacci resistance level.  The range from mid-March to mid-April is also more or less equal to the range from early July to the end of July.

So the hypothesis above that XJO might test horizontal resistance at 7565 is looking shaky.

Sector Performance this past week.

The strong result for the XJO was broad based, with ten out of eleven sectors providing positive results.  The only negative sector was Staples -0.32%.  That's a defensive sector.  The other two defensive sectors Utilities and Health.  Both were positive but relatively weaker than other sectors.  XUJ +0.82% and Health +0.52%.

 

The best three sectors were Energy +3.42%, Information Technology +2.96% and Telecommunications +2.91%. 

 

XGD (Gold Miners) which is an industry group within XMJ fell again -1.37% after falling the previous week.  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 (Information Technology) which did well this week.

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

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

 

This is my favoured chart for getting into and out of the market.  This is not for day-trading or swing trading, but more for position trading.  It does tend to lag, but is fairly good at showing the swings in the market for longer term traders.

 

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

% of Stocks above the 200-Day MA:  Last week 62%, this week 68%. 

% of Stocks above the 50-Day MA: Last week 60%, this week 75%. 

% of Stocks above the 10-Day MA: Last week 60%, this week 73%.  

 

% of Stocks positive on the Hull MA13:  Last week 45%, this week 76%.

Internals are strong and pushing up close to the 80% mark (but not the Stocks above 200DMA).

It woouldn't take much to push the market into reverse from these levels.

Conclusion.

 

XJO has had a good run-up into the end of July.  It might be looking at the end of that run looking at ranges and Fibonacci retracement levels.

Stay with the trend until we see definite signs of weakness.

 

29/7/23. Saturday Finspiration Report.

 Yesterday in Australia, ASX was down heavily, XJO down -0.7%.  Overnight Oz Futures up +0.26%

XJO had a wide-range day on Friday, with evidence of intra-day buying (long lower wick on Friday's candle).  The intra-day buying bounced off horizontal support plus the Ichimokue Conversion Line and the Supertrend Line.  Powerful triple support.  Overnight Futures suggest the rebound will continue on Monday.

   Overnight in the U.S., Dow Jones went on its winning ways, up +0.5%.

 Friday night's candle was an "inside day" - completely within the range of the previous day.  That indicates indecision.  Plenty of support exists below the current set-up, so, at this stage, I'll presume that any pull-back will be bought.

27/7/23. Thursday Evening Finspiration Report.

 XJO up strongly today, +0.73%.  Why?  Beats me - tune in to the ABC tonight - Alan Kohler usually has all the answers. 

 

The trend is up - stay with the trend until otherwise indicated.

Nine out of eleven sectors were up today.  The only negatives were the resources, Materials -1.04% and Energy -0.53%.

The best was Property - a whopping big +3.33%. and therein probably lies the answer to my Why?  Property is an interest rate sensitive sector, so the market seems to think interest rates are on hold or going to go down.  (Until tomorrow that is.  The market is a fickle beast.)

Tech stocks were second best - XIJ up +2.19%.

NH-NL Cumulative.

This is my favourite chart for staying in the market.  While it remains above the 10-Day MA - stay long.

The big question now is:  What will the Dow do tonight.  14 in a row?  Dow Futures are currently up +0.16%.  So that's saying:  Probably.

Good luck.