Weekly Finspiration Report. Sunday 12/11/23.

 

In the past week, stock market returns around the world were varied, to say the least, e.g.,  XJO -0.02%.  SP500 +1.31%.  European STOXX600 -0.21%.  Japanese Nikkei +1.93%.  Not much correlation in those numbers.

STW Daily Chart (STW is an ETF which tracks the XJO)

 

This week, the ASX has been in consolidation mode.   The Chart is sitting right at the Point of Control, the price zone where the most volume has occurred, i.e., the bulls and bears are in balance at that level.  So this could go either way.

While the XJO (and STW) remain below the 200-Day MA and the Kumo Cloud, I'll presume that the index has been in a counter trend rally.

Volume has been dropping this week, so there hasn't been enough power to force the Index higher.

Indicators, except for volume based ones, remain bullish, so another upside impulse move could be in the offing if volume picks up.

SP500 Daily

 SP500 had a great day on Friday, up +1.56%, completely reversing the Powell inspired drop on Thursday of -0.81%.

That should flow on to Australia on Monday.  Friday night Oz Futures were up +0.34.

Before getting too excited about Friday's New York positive move, I'd point out that the Force Index is showing a negative divergence, which suggests the American index may not have to much further to run.  It's getting close to the top of its Value Zone and a high volume node on the Volume Profile.  The top of the Value Zone often acts as resistance to a stock/index.

Sector Performances - One Month.

It's been a dismal four weeks for most sectors.  Only one sector, Health, has shown real strength, up3.45%.  The only other sectors on the positive side were Property +0.72% and Discretionary, barely positive at +0.25%.

XJO was down -1.06%.  Helping to keep the Index from major falls were Financials flat -0.02% and Materials down modestly, -0.37%.  (Materials were affected adversely by big falls in many of the Lithium Miners.  BHP, the biggest stock in the sector, was up +0.44%.

The biggest falls were in two "sensitive sectors" Energy -7.29% and Information Technology -6.2%.  These two sectors are often very volatile.  I wonder just how much further Energy can fall before a counter-trend rally takes place.

Two "defensive sectors" also did poorly, Staples -3.96% and Utilities -4.36%.  Not much "defensive" quality in those two readings.

 

Sector Momentum 

 

 If a sector is in a counter trend rally, then the Daily RSI is above the Weekly RSI, but Weekly RSI is below the Monthly RSI.  That doesn't mean it can't develop into a full blown up trend.  That would require the Weekly RSI to be above the Monthly RSI - it just hasn't happened yet.  It might on might not.

SECTORS in Counter-Trend Rallies:  Financials, Materials, Information Technology, Communications Services, Health, Staples, Industrials.  XJO is also in a Counter-Trend.  

Sectors in Up Trends:  Discretionary and Property.  Composite Bonds are also in an up trend. 

SECTORS in Down Trends:  Energy, Utilities.  Gold Mining is also in a down trend.

These figures suggest some optimism in the market with seven sectors in counter-trend rallies.  Given the positive seasonals at this time of year, many of those sectors could develop into up trend.

Last week, we had no sectors in up trends.  This week we have two.  So despite the flat result for the XJO, the internals are beginning to show improvement.

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

• Above their 200-DMA:  last week 36%, this week 39%.
• Above their 50-DMA:  last week 32%, this week 47%
• Above their 10-DMA:  last week 81%, this week 69%.

Stocks above 10-DMA have fallen from their overbought readings of the previous week, but medium to long term pressures remain to the upside.  We need to see Stocks>50 DMA get above their 50% reading to feel that the market could be in a sustainable up trend.

Long Term Market Signal.

 

My long-term Market Signal is based on the NewHighs-NewLows Cumulative Chart with a 10-Day MA. 

 

When the chart moves back above its 10-Day MA a "buy" signal is given.  It is usually reliable for long term investors.  It did have a whipsaw Aug/Sept this year but that is a rare anomaly.

 

Since early September, the chart has been in a steep down trend which is only now beginning to slow.  NH-NL Cum is close to a bullish upside break of its 10-Day MA.  So we are close to getting a long-term "buy" signal.

Conclusion.

 

The Australian market was flat this week after being very strong the previous week.   It has been consolidating this week and XJO remains in a counter-trend rally.  Stay with the trend until it obviously ends.

 

 Postscript.

The Ozzie market often takes a step back in November, mainly because three of the Big Four Banks go ex-dividend in the latter part of the month.  NAB goes ex-dividend this week on 15 November.  Its dividend is 84cents.  Current price is $28.46.  So we can expect a drop of  ~3% in NAB on Wednesday.  ANZ and WBC can expect similar drops when they go ex-dividend after NAB.  These three companies are the 4th, 5th and 6th largest companies in the ASX200.  So their ex-dividend events have a significant impact on th XJO.

Iron Ore is entering a seasonally favourable period up to the end of December, so that is likely to have an impact from now on.

 

Chart from Market Index (note the strength in December):

 

Good Luck.

FINSPIRATION AUSTRALIA. Sat. 11/11/23.

 American Indices up strongly on Friday night.

Dow Jones +1.15%.  SP500 +1.56%.  Nasdaq +2.05%. Small Caps +1.02%.  Banks +1.08%.

SP500

 SP500 pulled back on Thursday, testing the 50-Day MA.  Friday's strong up candle is a continuation of the trend.  Nest resistance level is the top of the Value Zone and the next hig volume node, around 4450 in round numbers.

Volume was on the low side on Friday, resulting in a negative divergence appearing on the Force Index - volume needs to increase if this rally has legs.

The coming week is Options Expiry Week in the U.S. which has a bullish bias.

Commodities.

 Commodities Index +0.5%.  Energy +1.41%.  Base Metals -0.86%.  Agriculture -0.41%.  Gold -1.09%.

That's a mixed picture for Australian Resources on Monday with Energy up and Base Metals down.

In New York, BHP flat -0.12%.  Rio -1.16%.  Woodside continued to collapse -2.23% on heavy volume.  So we might be seeing a culmination of the downtrend in WDS.  Westpac down -1.56%.

Those New York stock figures look bearish, but Ozzie Futures were up +0.31% overnight, so we should have a positive day on Monday following U.S. up.

STW (ETF FOR XJO)

Thursday's bearish reversal candle played out with a down day for the STW and XJO on Friday.  That brings STW back to support of the Point of Control, the long gray bay on the Volume Profile on the left of the chart.  With a good result in the overnight Ozzie Futures we should have a positive day on the ASX bouncing off support.  We need to see a close above Thursday's high to give another "buy" signal.  That might be a bit of an ask.  That would need a rise of about +1% on the STW. 
 

FINSPIRATION AUSTRALIA.

 10/11/23.  Powell sinks U.S. stocks at 1.00 p.m. (NY time) when he said that the Fed may not have done enough to stop inflation.

Dow Jones -0.65%.  SP500 -0.81%.  Nasdaq -0.94%.  Small Caps -1.33%.  Banks -1.46%

SP500

Last night's candle on the SP500 is a bearish engulfing candle.  Coming at the top of the trend after several doji candles - that's usually a reliable signal.

The Chart remains opposite a congestion zone and above the 50-Day MA so this may lead to consolidation rather than the start of a major pull-back.  Wait.

Commodities.

 Commodities Index -0.25%.  Energy -0.09%.  Base Metals -0.58%.  Agriculture -0.58%.  Gold +0.4%.

After half an hour of trading this morning, XJO is down -0.42%.
 

9/11/23. Thur. Evening Finspiration Report

 XJO up modestly today, up +0.28%, after being much higher earlier in trading.

Chart for STW (ETF for XJO).

 Today's candle is a shooting star - a reversal signal.

Coming at the top of the up-trend, at horizontal resistance and resistance of the 50-Day MA - that probably means the end of this up-trend.

A down day tomorrow will confirm.

Good luck

 

9/11/23. Thur. Morning Finspiration Report.

 Major American indices continue to consolidate, but Small Caps continue to fall.

Dow Jones -0.12%.  SP500 +0.1%.  Nasdaq +0.08%.  Small Caps -0.92%.  Banks -0.36%.

SP500

 SP500 is having difficulty pushing up past the Point of Control and the Value Zone of the Volume Profile.

Volume has fallen away.  Unless volume can pick up to push the Index higher, the path of least resistance is to the downside.

On the plus side, consolidation is taking place above the 50-Day MA.  Wait to see which way this breaks.

Commodities.

 Energy continues to fall heavily, down -1.85%, which should be a positive for stocks, but it hasn't been happening.  Energy is now oversold with an RSI at 33.  If Energy reverses to the upside, that would be a negative for American stocks.

Commodities Index -1.11% {pulled down bt Energy).  Base Metals -0.17%.  Agriculture +0.45%.  Gold -1%.

After 30 minutes of trading this morning, XJO is up +0.4%.  Health (XHJ) is leading the way up >1%.

8/11/23. Wed. Evening Finspiration Report.

 ASX up modestly today.  XJO +0.26%.

Chart for STW (ETF for XJO):

Today was a narrow range day, the narrowest for the past four days (NR4), so expect range expansion tomorrow.

The chart remains in consolidation mode with low volumes being recorded.  That suggests that the next move will be to the upside.  We shall see.

XJO remains with plenty of overhead resistance.

IT (XIJ) was the best performer again today,  XIJ +1.86%.  Property (XPJ) also continues to do well, XPJ +1.18%.

Only two sectors were negative today - both the Resources Sectors, XMJ -1.05%, Energy -0.15%.

OZR is an ETF for the Resources.  It was down today on heavy volume OZR -1.79%.

You can see by the width of today's candle just how heavy the volume was today.  That is also reflected in the bottom pane (volume) which has risen sharply higher, and Force Index which has fallen sharply reflecting both high volume and big fall in price.

That brought OZR almost down to horizontal support, so we could see some upside movement in the near future.

European stocks are mostly flat in early trading,  Euro STOXX600 down -0.05%.  Dow Futures -0.1%.  Oil is also flat, Pil -0.01%.  Gold +0.02%.  Not much direction in any of that.

Good luck

8/11/23. Wed. Morning Finspiration Report

 Major U.S. Indices finish on the positive side, but Small Caps pull back.

Dow Jones +0.17%.  SP500 +0.28%.  Nasdaq up strongly +0.9%.  Small Caps -0.69%.  Banks -0.51%.

SP500

I mentioned yesterday the many factors pointing to a pull-back.  Nothing has changed - except some factors have intensified.  Volume has continued to drop off - coming at the top of a trend that indicates a lack of confidence in the trend.  A push by bears would lead to capitulation.

Commodities.

 Commodities Index -2.14%.  Energy -3.62%.  Base Metals flat 0.00%.  Agriculture -1.34%.  Gold -0.41%.

Adter ninety minutes of trading this morning, XJO is up 0.25%.  Information Technology doing best (following the Nasdaq), up +1.62%.  Materials worst -1.61%.