Finspiration Australia

Saturday, September 16, 2023

XJO Monthly Chart

The long term chart of XJO has been range bound for the past year - no trend.

So far in September, XJO has fallen -0.36%.

This is a market for traders - long term investors wait.

XJO Weekly Chart.

This week, the ASX was up +1.71%, more or less reversing the previous week's loss of -1.67%

The MACD Histogram in the bottom panel shows little sign of varying from the zero line, i.e., the Index remains range bound.

This type of market is best tackled by traders using "support and resistance" strategies.

The stock market is always dynamic - one strategy will suit one set of conditions - but invariably - the market changes and another strategy needs to be used. Some common types of trading strategies are: support and resistance, mean reverting, trend trading, break-out trading, momentum trading. It's not a case of one style for every type of market. Contingency should be a mind-set for the successful trader.

STW Daily Chart. (STW is a tracking ETF for the XJO)

Resistance is shown by the long dark rectangle on the chart.

STW is close to that level now. Friday's action shows a "shooting star" candle-stick which often comes at the top of a trend. Notice now a similar candle-stick occurred on 4 September which resulted in a pull-back to support from 24 August.

The non-trending nature of the market is shown here by the fact that 50-Day MA and 200-Day MA are virtually locked together.

We can expect a pull-back.

Sector Performances this week.

Only two sectors were down this week, Property -0.98% and Health -0.87%.

Nine out of eleven sectors were up this week. The best were Materials +3.88% and Financials +2.52%.

XMJ Weekly Chart.

XMJ has been in a trading range for most of this year. Buy at support and sell at resistance has paid dividends throughout this year.

This week, XMJ bounced off support and may be heading higher - counter to the XJO.

If the lower support is broken to the downside - we may see much lower prices. As we are headed into the most dangerous time of the year (September/October), that should be something for traders to keep in mind.

100 Leader Stocks above their 200-Day, 50-Day and 10-Day Moving Averages.

Above their 200-DMA: last week 43%, this week 46%.

Above their 50-DMA: last week 40%, this week 46%

Above their 10-DMA: last week 25%, this week 51%.

These figures reflect the rise in the Oz market this week. All three figures are hovering in mid-range - consistent with a range bound market.

SP500 - American Market.

It was options expiry day on Friday in America, and, as often happens, fireworks exploded with the SP500 down -1.22%. Options Expiry Day is notorious for such movements as Market Makers attempt to keep the market in a spot where most options expire worthless. This is known as "Max Pain"

Here's the SP500 Chart:

Notice how SP500 was forced down to the middle of its recent range (20-Day MA). I think we can safely discard Friday night's action as an artefact of Max Pain manipulation.

Monday night's action might show which way the American market is going to go.

Despite all that - our market is likely to have a knee-jerk reaction Monday - to the down-side. That might be a catalyst for further selling in the XJO taking it back down to support. We shall see.

Conclusion.

The Australian stock market has been range bound for many weeks.

XJO is now close to the top of its range - so, if recent history repeats - it will likely fall to the bottom of its range. No guarantees - just a likelihood.

Not everything in the market follows the same road-map - as we saw in the Materials Chart above. Opportunities will offer themselves to astute traders.

Friday, September 15, 2023

16/9/23 Saturday Finspiration Report.

Oz up. Europe up, U.S. down.

Chart for STW - tracking ETF for ASX200.

Huge upside movement by the Australian market yesterday, following on from a big move in the U.S. on Thursday. But the U.S. market reversed last night - and our market will surely follow on Monday.

U.S. Indices.

It was options expiry day in the U.S. on Friday, which explains the huge volumes seen on the major indices. That may explain, at least in part, some of the big drop last night as the Market Makers weave their magic to inflict the greatest loss on expiring options. We'll know more in Monday night's trading when "normal" conditions return.

SP500.

Last night's action brings the SP500 back to the middle of the Bollinger Bands. That's about the middle of the price distribution over the past 20-Days - which looks like the area the Market Makers might have been aiming for in their manipulations.

Commodities.

Commodities Index -0.23%. Energy -0.41%. Base Metals -1.07%. Agriculture -0.59%. Gold +0.66%.

Overnight Sydney Futures were down, -0.56% which ensures the Oz market will open on the negative side on Monday.

Thursday, September 14, 2023

A bullish night on Wall St.

Dow Jones +0.96%. SP500 +0.84%. Nasdaq +0.81%. Small Caps +1.64%. Banks +1.88%.

Small Caps have been behaving poorly - but last night shows a "kicker" candler stick. As it comes at the low end of the down trend, that looks particularly bullish.

SP500.