Friday Morning Finspiration Report. 22/9/23

 I've been trying to pick a low all week for the Ozzie market - with dismal results.

Below is a weekly chart of XJO showing two big round number horizontal support levels.  (The market loves big round numbers.)

No - there is a no chart below - because my computer has decided its old and wants a pension.

Well - I'm willing to do that - but I'm hanging out for a new iMac with the M3 chip coming out at the end of the year.

Anyways - big number support levels for today's XJO are:

7000 and 6900

Good luck. 

Thursday Evening Finspiration Report. 21/9/23.

 Are we there?

XJO down heavily -1.37% today.

Chart for STW ETF for XJO

STW reached the Point of Control (zone of heaviest volume) today and stopped after being down heavily.

That level also coincided with the lower edge of the Value Zone and the middle of a congestion zone.

That looks like a lot of confluence to me.  I doubt it will fall further.  Especially after such a big down day I'd expect a better day tomorrow.

Information Technology was the best performer today, down just -0.05%.  That was a bit surprising after big falls in the Tech heavy Nasdaq last night in America.
 

Thur. Morning Finspiration Report. 21/9/23.

Yesterday, XJO Down -0.46%

In America, Interest Rate announcement nixed the U.S. market.

Chart for STW - ETF for XJO

 STW is down for three days in a row and likely to be down today.  It is close to an important support level and the lower end of the Value Zone.  Fourth day down is likely to be it. Today is options expiry day in Australia - so we can expect shenanigans.

SP500.

 Most of that long blue candle on today's chart was a result of the swoon coming after the Fed interest rate announcement.  Interest rates were put on hold - but expected to stay high for longer, perhaps one more rise.

Here's how the market reacted after the Fed announcement.

SP500 was in positive territory at 2.30 p.m. (Fed. announcement time) then fell more than 90 point.

A lot of that was due to bigger falls in the Nasdaq, down -1.53%.  Dow Jones Industrial was only down -0.22%.  That's a very wide divergence - which I think will narrow considerably in coming days.

Nasdaq with lots of Tech stocks is interest rate sensitive, that's the reason for the much bigger fall in the Nasdaq over the Industrials.

Commodities.

Commodities Index -0.82%.  Energy -1.61%.  Base Metals +0.7%.  Agriculture -0.27%. Gold -0.07%.

I suggested yesterday that Energy was looking at a fall - and that was confirmed today.

Gold also felt the impact of the Fed announcement.  Gold is negatively correlated to the U.S.$.  Higher interest rates mean a higher dollar and a lower Gold price.  The long upper tail on the Gold candle stick is indicative of the selling which occurred after the Fed. announcement.

After fifteen minutes of trading this morning, XJO is down -0.5%.
 

 

Wed. Morning Finspiration Report. 20/9/23.

 Major U.S. indices down a little overnight.  Fed. interest rate decision tonight.

Dow Jones -0.31%.  SP500 -0.22%.  Nasdaq -0.23%.  Small caps -0.26%.  Banks -0.42%.

SP500

 Last night's candle shows a long lower tail - plenty of intra-day buying.

That suggests to me that the "big boys" are preparing for some good news tonight from Fed Head Powell.

The intra-day bounce occurred at the lower edge of the Value Zone of the Volume Profile (horizontal bars at the left of the chart).  The Value Zone often acts as support/resistance.

Commodities.

 Commodities Index flat +0.08%.  Energy +0.04%.  Base Metals -0.8%.  Agriculture +0.41%.  Gold -0.09%.

Energy is consolidating at the top of a long up trend.  There's not a lot of oomph left in this rally.  I think some downside is looming.

Overnight Sydney Futures are down -0.22%.  That suggests a weak opening today in line with falls in the U.S.

Tuesday Morning Finspiration Report. 29/9/34

 Yesterday ASX down, last night U.S. flat.

STW (tracking ETF for XJO) down yesterday -0.65%.

20/50/200 Day MAs are all more or less aligned just below the finish of yesterday's downside movement.

Yesterday brings the STW down almost to the Point of Control on the Volume Profile (horizontal bars to the left of the chart.  A congestion zone exists just below the PoC.  STW (and XJO) will likely bounce there.  There's just too much support around that area to be ignored.

SP500

 SP500 is in non-trending mode which favours support/resistance traders.  (MACD Histogram almost flat.)

Last night was a narrow range event after heavy volume machinations on Options Expiry day on Friday.

20/50 Day MAs are aligned - non trending.

The chart is at the lower edge of the Value Zone for the Volume Zone - that favours a move back to the upside.

Commodities.

 Commodities Index -0.04%.  Energy +0.12%.  Base Metals +0.65%.  Agriculture -0.72%.  Gold +0.59%.

That's a bearish candle on the Ag. chart - coming high up in the trend suggests this upside move is coming to an end.

Gold is behaving favourably.

With Base Metals up, we might see some good moves in the miners today - but not reflected in last night's prices.  BHP -0.34%, RIO -0.88%.

Overnight Oz Futures -0.29%.  That suggests the ASX will open moderately lower today.

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.

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.