Tuesday Evening Finspiration Post 26/9/23

 ASX falls today.  XJO down -0.54%.

XJO is having a hard time getting above the first of my Supertrend Lines (1/10).  It also remains below my 4EMA which is a very short term market.

But it remains above the critical horizontal support line at 7000 (round figures).

So the market remains in limbo.

Continue to wait and watch.

Monday Evening Finspiration Report. 25/9/23.

 Another fascination day on the Ozzie Market.  After falls in New York on Friday night, predictably, the ASX fell at the opening today - but intraday buying pushed the XJO up to a small positive gain.  XJO +0.11%.  The range today was not as dramatic as Friday's, but still impressive.

Only two sectors were negative today - but they were the Biggies, Materials -0.73% and Financials -0.21%.  So, although the gain was relatively small, breadth was good.

IT was the best performer today +1.92%.  Some of the big names in IT performed well today, XRO +2%, Wisetech +1.6% and Technology One +4%.

In early trading in Europe, stocks have fallen following the pattern in Australian today.  STOXX600 currently down -0.78%.  Dow Jones Futures currently down -0.15%.

Weekly Finspiration Report. 24/9/2

 

XJO Monthly Chart 

 

The long term chart of XJO has been range bound since Nov. 2022 - no trend.

So far in September, XJO has fallen -3.24%.  It is now almost back down to the lower edge of the sideways channel.

There's no reason to expect that this sideways channel will collapse.  

The sideways channel has persisted despite stready increases in interest rates by the Federal Reserve in America and the Reserve Bank in Australia.

In November 2022, the RBA's cash rate was at 2.85%.  The RBA held rates steady in Sept. 2023 and is now at 4.1%.  (The RBA began raising interest rates in May, 2022.  Its cash rate has gone up 4% during that time.)

The ASX stock market has been resilient in the face of steady increases in rates.

Long term investors have been frustrated by the lack of movement in the XJO - but that is better than a full-blown bear market which many were expecting in the face of interest rate rises.

Generally, an inverse correlation exists between interest rates and stock markets.  When interest rates go up, stock markets go down.  So it has been a bit surprising that the Australian market has been resilient in the face of interest rate rises.

XJO Weekly Chart.  

This week, the ASX fell heavily, down -2.89%.

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 not suit all 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.  

Contingently, the current market is best suited to "support and resistance" strategies.   Buy at a low support level and sell at a high resistance level.  We saw a dramatic example this week.

XJO Daily Chart.

Friday was a dramatic day on the Ozzie market.  It coincided with Options Settlement Day which always resutls in a big increase in volume.  Not how wide is Friday's candle - an indication of heavy volume.

The market started with a confident break below the support zone shown on the chart, but wise heads so "No" and the market rose steadily all day to which above the support zone.  I'd expect a test of that support zone before further upside which will need to overcome the next minor resistance level at the 24 August high.

Sector Performances this week.

 

 All sectors were down this week.  The best performer was Utilities -0.15% followed by Staples -1.53% and Discretionary -1.93%.

 

The worst performers were interest-rate sensitive sectors, spooked by a hawkish tone from the Federal Reserve despite on rise in interest rates.  IT -4.78%, Health -4.48%and Property -4.44%.

 

Property Daily Chart

 Property has been trading within a range of about 1100 points or 7.5%.  If things go according to Hoyle, we should see a move back to the upside from here.

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

• Above their 200-DMA:  last week 45%, this week 37%.
• Above their 50-DMA:  last week 46%, this week 25%
• Above their 10-DMA:  last week 51%, this week 24%.

The Stocks above 50DMA are at 25% - we don't often see figures that low within a rebound coming soon.

The last time was in late June and early July. 

SP500 - American Market.

Here's the SP500 Chart:

 

 On Friday, SP500 broke marginally below an importan horizontal support level.  Expect a move back to th upside.

 

Conclusion.

The Australian stock market has been range bound for many weeks.  It broke below major support on Friday and then rebounded solidly.  Expect more upside.

Be aware that there are no guarantees on the stock market.  The old adage must be remembered:  past performance is no guarantee of future performance.

If the market breaks decisively below support - then all bets are off.

Saturday Finspiration Report 23/9/23. Second for the day.

 Keeping it simple.  Renko Chart for XJO.

Draw your own conclusions.

(Renko Charts explained here,)

Saturday Finspiration Report. 23/9/23.

 Unbelievable day on the XJO Yesterday.  U.S. remains weak.  And - my computer behaves itself this morning after I gave it a good flogging.

XJO Chart.

 XJO finished up +0.05%.  Intraday Low to High +1.6%

Best sectors were Utilities +0.79%, Energy +0.72%, Materials +0.56%.  (Fortescue +1.46%, Pilbara +6.78%).

Worst sectors were ones impacted most by interest rates:  IT -0.67%, Health -1.02%, Property -1.41%.

Overnight In the U.S.

 Dow Jones -0.31%.  SP500 -0.23%.  Nasdaq -0.09%.  Small Caps -0.31%.  Banks -1.26%.

SP500.

 Indicators are at or close to oversold levels.  A positive divergence on MACD Histogram hints at a possible rebound.

Look for positive action in America on Monday.

Commodities.

 Commodities Index flat +0.08%.  Energy -0.3%.  Base Metals +1.03%.  Agriculture -0.18%.  Gold +0.32%.

For the Gold Bugs

 Gold was up a little last night, but bouncing off the lower trend line of the Andrews Pitchfork.  That suggests more upside.

 

 

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.