22/10/23. Weekly Finspiration Report.

 The past week was negative for the Australian stock market, with big falls occurring on Thursday and Friday/

XJO Weekly Chart.  

 

 XJO down this week, -2.13%, erasing the gain from the previous week. 

XJO had no trouble slicing through important support at 6957 and finished at the equally important support of 6900 (round figures).

XJO Daily Chart.

XJO held up reasonably well for the first three days of the week, but sliced through important support t 7000 (round numbers) on Thursday.  On Friday, it continued down through the next support at 6957 to finish at the next important support of 6900.

Positive divergence on the MACD Histogram suggests the next move will be to the upside.

SP500 Daily

 SP500 is showing a similar pattern to the XJO.   It is back down to an important support zone.   It is also opposite a high volume node which might provide support.  

MACD shows a positive divergence which suggests the next move will be to the upside.

SP500 was down -2.39% for the week.  That was an unusual negative result as the past week was Options Expiry Week which has a positive bias.

Sector Performances this week.

The only places to be this week were XEJ (Energy) +2.67% and XGD (Gold Miners) +6.1%.    Both were benefitting from a War premium due to the Hamas/Isreal Clash.

 

After Energy,  best performing sector (relatively) was Materials (XMJ) down -1.57%,  IT (Info. Tech) was down a whopping -5.07%.  IT over the long term has a good growth record, but short term can be volatile.  A great trading mechanism for savvy traders (as is Energy and Gold).

From the time of the initial incursion by Hamas into Israel early in October, XGD (Gold Miners) is up more than +15%.

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

• Above their 200-DMA:  last week 35%, this week 32%.
• Above their 50-DMA:  last week 32%, this week 21%
• Above their 10-DMA:  last week 72%, this week 19%.

The few times we've seen figures like those for ^10DMA were in early July '23, mid March '23 and late Sept. '22.

I've marked those times on a weekly chart of XJO below:

 The last three times we had an exceptionally low reading for Stocks ^10DMA. it has been followed by a tradable rally.

Conclusion.

 

The War in the Middle East has had a negative effect on stock markets, but Energy and Gold Miners have been beneficiaries.

 

Technical analysis suggests the next movement in stocks will be to the upside, but we're in a dangerous period with War in the Middle East.  So technical analysis might be thrown out the window.

 

November tends to be a positive month for stocks.

 

Finally, SPY (ETF for SP500) finished at  $420.58.  MAX PAIN for November Options Expiry for SPY is $450.  That's a hefty premium of +7%.

 

Good luck

 

 

21/10/23. Saturday Finspiration Report.

 Yesterday, ASX fell heavily again.

XJO down -1.16% yesterday.  It is now back down to the key horizontal support level of 6900.  If that fails, the next major horizontal support level is 6440. That would entail a further drop of about -6.5%.  From late July till now, XJO is down about -7.5%.

Between now the next major horizontal support level is the 200-Week MA at 6770, that could also provide a significant support level.  

Below is a weekly chart showing the next support levels.

Will the Index continue falling?  Possible.  

On the positive side, daily chart indicators are beginning to show upside potential.  Daily RSI is at 35.9 which is oversold (but not very oversold).  Indicators in the lower panels, show potential for positive divergences - but we have to wait and see how those play out.

Overnight.

U.S. Stock indices were weak.  Oil down and gold showed intra-day selling.

SP500 is down to horizontal support and close to its 200-Day MA.  That's dual support which may hold.

Like the XJO, SP500 is oversold with an RSI at 35.4 - almost line ball with the XJO RSI at 35.9.  So SP500 is not very oversold.

A big potential positive divergence exists on the MACD which could suggest a move to the upside.

Volume is rising but not enough to suggest yet that we are seeing a wash-out.

Force Index is falling to a low level - but, again, not enough to suggest a wash-out.

Indications from the chart is that a near-term double bottom low could be forming - but we need to see more information to fell sure about that. 

Commodities.

Commodities Index -0.75%.  Energy -0.65%.  Base Metals -0.28%.  Agriculture -0.23%.  Gold +0.27%.

Commodities may provide a better understanding of what might happen to stocks.  Commodities are traded by people - professional traders who often predict the future course of events than stocks.

Volumes for Energy have risen sharply in the past two days which suggest a looming down-turn.  Last night's candle on Gold is a big "shooting-star" coming at the top of the up-trend on high volume suggests the end of the spike in Gold.

Gold.

 Gold is a "safe-haven" in times of geo-political unrest as we've seen in the current turmoil in the Middle East.  Since 6 October, the time of Hamas incursions into Israel, Gold has risen nearly +9%.  Friday's intra-day selling may point to the end of the rise.  

Negative divergence on the 3-Day EMA of the Force Index suggests the next movement will be to the downside.   That would indicate optimism that the current geo-political turmoil is coming to an end.

Good luck.

 
 

20/10/23. Friday Morning Finspiration Report.

Stocks down, Energy up, Gold up.

 Fed Head Powell speech last night produced nothing new in the way of monetary policy but the stock market reacted in a volatile manner, down, then up, then down, down down.

The market was relatively docile before he spoke but after effects were negative.

Dow Jones -0.75%.  SP500 -0.85%.  Nasdaq -0.96%.  Small Caps -1.55%.  Banks -1.33%.

SP500.

Sp500 seems destined to retest the 200-Day MA.  If that fails, we may be looking at a bear market correction.  But let's cross that bridge if it happens.

Commodities.

 

Commodities Index.  +1.04%.  Energy +1.35%.  Base Metals +0.11%.  Agriculture +0.23%.  Gold +1.23%.

The Australian market is well down this morning - more than -1%.  Energy is the only sector on the positive side.

19/10/23. Thursday Evening Finspiration Report.

 Thursday was a bad day on the ozzie market.  It followed on from big falls overnight and a strong employmnet report (on the surface).  In this case, good news was bad news for the market (higher employment = RBA interest rate rise).  But, maybe, the report was not as good as it seemed at first glance.

The unemployment figures dropped from 3.7% in August to 3.6% in September.  Pundits expected no change.  But, there nuances in the numbers.  The drop in unemployment was due to people moving from "unemployed" to "not in the labour force.  Hours worked were also dropping.  All in all, maybe the good employment figures were not as good as they first looked.  Maybe that means the RBA won't raise interest rates on Melbourne Cup Day.

STW Chart (STW - ETF for the XJO).

That's a big drop today for STW -1.4%.  XJO was down -1.36%.  

Now - on such a big down day and such "good" employment numbers, I'd expect the smart money to be selling down.  But - if you look at the volume figure (second bottom panel) volume was quite subdued.  So maybe the smart money was holding back and it was the dumb money having a knee jerk reaction to the raw employmnet number.  

Overall - on the face of it - a poor day on our market.  All eleven sectors were down, with the interest rate sensitive IT sector performing worst -1.84%.

In early European trading, EURO STOXX600 -0.93%.  Dow Futures -0.22%.

Fed Head Powell gives a speech in the U.S. tonight, and the drama in the Middle East continues.  Powell's speech might be a catalyst for market movements.  I doubt he is going to say anything bullish for the market.

19/10/23. Thursday Morning Finspiration Report.

 Overnight:  Stocks down, Bond yields up, Energy up, Gold up.  That all points to a very worried market.

Dow Jones -0.98%.  SP500 -1.34%.  Nasdaq -1.62%.  Small Caps -1.88%.  Banks -2.49%.

SP500.

 

SP500 remains between important support and resistance.  A break lower would be bearish.

 

Commodities.

Commodities +0.89%.  Energy +1.3%.  Base Metals +0.06%.  Agriculture +0.27%.  Gold +1.45%.

After 30 minutes of trading this morning, XJO is down heavily -1.3%.All sectors are down, most more than -1%.

18/10/23. Wed. Evening Finspiration Report.

 In a day of choppy trading, XJO finished up today +0.3%.

XJO remains in a consolidation pattern at the top of its recent counter-trend rally.

Tocay's candle was within the range of Tuesday - which usually suggests indecision.  That goes along with the choppy nature of intra-day trading.

Trading was more or less evenly spread between sectors, with five up and six down.  Best was Energy +2.47%.  Worst was Utilities -0.95%.

Gold Miners today did well, Gold Miners ETF up +3,66%. The ETF is in a strong up-trend with the 2 Day EMA, 13 Day EMA and 20 Day MA all above the zero line.  Volume was high today, so this might be reaching a climax.

Treasury Wines surged higher today on optimism about the Chinese market.  TWE +4.98%.

BHP presented its quarterly statement today which was met favourably by the market, BHP +0.68% well above the result for the XJO of +0.3%.

I checked on the short-selling list today and noted that lithium stocks are prominent.  Pilbara (PLS) is the most shorted stock, but other lithium miners are also prominent, e.g., Liontown Resources, Core Litium and Sayona Mining.

In early trading this evening, Europe is flat and Dow Futures flat - that's despite the news of the terrible explosion at a Gaza hospital where hundreds have died.  Gold, however, continues to rise, currently up about +0.8%.

Tomorrow in Australia is a heavy duty reporting day with employment data due.

17/10/23. Tuesday Evening Finspiration Report.

 ASX was going great guns this morning, up >1%.  Then the RBA minutes landed around 11.30 a.m. and the market dropped like a stone.  XJO finished up +0.41% - down about -0.6% from its high.

XJO remains in consolidation at the top of its counter-trend rally.  Today's action was disappointing to say the least.

IT was again the best performing index, up +1.33%.  

The retailing sectors were both negative with Discretionary -0.26% and Staples -0.14%.  Probably both fell as a result of the RBA minutes (hawkish).

Health -1.21%, remains in the Critical Care Department (pardon the pun).

Real Estate wasn't phased too much by the RBA, up +1.12%.

Here's the chart for VAP (ETF for Real Estate).

Notice how spikes in Volume tend to initiate changes in trend.

Currently, Volume is very low - the chart is barely moving.

Until tomorrow.  Good luck.