April 27, 2015 Leave a comment

XJO up +0.83% which follows up from the big move on Friday when the XJO was up +1.51%

Here’s the chart:

Screen Shot 2015-04-27 at 8.21.29 PM

I’m trialling a new visualisation process (technical analysis is all about visualisation despite the jargon and the maths).

I’m employing the following methods on the index chart:

1.  A band of MAs – 34 EMAs based on the High/Low/Close figures – giving a band of three MAs.

2.  The Super Trend Line (10/3) – that’s the Gold/Blue line which moves in up/down moves and then plateaus.

2.  Horizontal support resistance levels.

The lower panes are the usual technical analysis tools I use.  They haven’t changed.  But these require some experience in interpretation

Looking at this chart – as I’ve constructed it – it doesn’t take much of a genius to see that the XJO is in a sideways consolidation.  It remains above the support levels for a bullish configuration

Looking at the chart with my adaptations – Horizontal Support and the 3-Bands of Moving Averages.

We’ve had two strong days to the upside.  A clear upside break of resistance and if the CCI gets above 100 – we’ll be cooking with gas.  Hopefully.  :)

Here are a few other charts:

BHP

Screen Shot 2015-04-27 at 8.50.32 PM

Using my visualisation process – BHP has now clearly moved into a medium term up trend.  It has broken above the EMA Band plus the Super Trend Line has been broken to the upside.

Indicators are getting stretched to the upside – that’s not unusual in a strong up trend.

I think the first serious test will occur about the recent high at 34.12.  That’s the high which occurred in early March.  If we see the TSI turn down around that level – it might be time t take profits.

CBA

Screen Shot 2015-04-27 at 8.58.27 PM

Using this visualisation method, we can see, obviously, that CBA has been in a strong up trend since October 14 when it also broke out from a double bottom pattern.

Currently, CBA might be in some danger.  STL has turned bearish, and the candlestick chart is below the three MA bands on the chart.  But – indicators have turned up, especially TSL.

It needs to get above the three MA band to prove itself – but looking positive at this stage.

WPL

Screen Shot 2015-04-27 at 9.05.47 PM

Clearly, WPL is in a sideways consolidation, but it has a bullish bias.  It is well above the low of late Jan.15, but still hasn’t been able to break out to establish a new fractal high.  New Highs on the chart are continuing to cascade lower  although today’s intra-day New High at 35.93 came close to moving above the intra-day high of 35.97 on 15 Apr.15.

TLS

Screen Shot 2015-04-27 at 9.15.37 PM

TSL is looking very promising.  It’s been one of the best performing stocks on the ASX.  Since early Feb.15, it’s been showing weakness.  But may be overcoming that at this stage.

It needs to prove itself with a break higher above horizontal resistance and the STL.

RB

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Sunday Smorgasbord. Weekly Report, week ending 24 April, 2015.

April 26, 2015 Leave a comment

CONTENTS

1.Global Performance: One Week

2.Australian Market: Weekly Sector Performance Chart.

3.Australian Market: Weekly Sector Performance Chart for Alternative Investments.

4.Australian Market. XJO – Monthly Chart

5.Australian Market. XJO – Weekly Chart

6.Australian Market. XJO – Daily Chart

7.Australian Market: Best Sector this Week.

8.Australian Market: Worst Sector this Week

9.Australian Market: Alternatives – IOO and IEM

10.America: Major U.S. Indices

11.Summary and Conclusion

GLOBAL PERFORMANCE – ONE WEEK

Intern. Perf

A good week:

Australia (ASX200) +0.94%

America (SP500) +1.75%

Germany (DAX)  +1.05%

China (China88) +0.36%

Japan (Nikkei 225) +1.74%

Everything was up – but no irrational exuberance being shown as we have seen recently in Germany, China and Japan.

The China result is in stark contrast to recent weekly results where five of the prior six weeks were up >3% each week.

Maybe the China bubble is about to burst. This week’s candle is a doji – if the coming week shows a big down week, it could be all over red rover.

AUSTRALIAN MARKET:
WEEKLY SECTOR CHANGES

Indi.Perf

The Australian market (All ords) up this week, +0.95%.   The big winners, the volatile Materials Sector +4.24% and Telecoms +2.81%. The biggest losers (relatively) were the Financials -0.19% ,and Consumer Staples +0.05%. All S&P Sectors except Financials were up.

Small Ordinaries, which makes up the smallest 200 Stocks in the ASX300, was up +1.16%. Property Trusts +1.03%. Gold Miners +0.88%.

It’s unusual to see the All Ords up strongly while the Financials are down. Something seems amiss here. Maybe it’s just a one-week anomaly.

On a thirty day basis, the correlation of the Australian market with the U.S. is Very Weak (+0.22). With figures like that it might be worth investing in both the Australian market and the U.S. market to reduce risk.

For current world market correlations see:

https://www.macroaxis.com/invest/worldMarketCorrelation)

AUSTRALIAN MARKET:
ALTERNATIVE INVESTMENTS – WEEKLY CHANGES

Alt.Perf

I use three iShares to measure the performance of Alternative Investments. These shares are tradable on the Australian Stock Exchange and gives investors the opportunity to diversify their portfolios into international shares and fixed income securities.

The Alternative Investments on average were up +0.17%. That flat result hides a wide range of results.

IAF (largely invested in Australian Government Bonds) was down, -0.77%.

IOO (invested in 100 large international companies) was flat +0.15%.

IEM (invested in a range of large capitalisation and mid-range capitalisation companies in Emerging Economies) was up +0.44%. The week before this, the chart for IEM broke above a long term restraining oblique trend line.

On average, the 3 Alts fell -0.18

These three stocks are included in my experimental Diversified Portfolio (see below) because of their low correlation with the Australian Market.

AUSTRALIAN MARKET:
MONTHLY CHART – XJO

XJO Monthly

XJO, 5933.3, up so far this month +0.71%. It is currently marginally above the closing high of February, 5928.8 and below major resistance at 5949.4. We still have four trading days left in this month.

February resulted in a major move up, +6.09% which came after the RBA reduced official interest rates on 4 February. There’s been much unrequited expectation in March and April for a further drop – no such luck. February was the first change in official interest rates for 18 months. RBA minutes were pessimistic about the Australian economy on a number of criteria, especially growth (below trend) and unemployment, and the minutes made it clear that the exchange rate needed to drop further for growth to improve. But the RBA usually moves cautiously, so expecting a further rate cut soon after the February one was probably hoping for too much.

For three months now, the Index has been knocking up against overhead resistance. A break higher would be very bullish.

Currently, with the chart well above the 10-Month Moving Average, there’s no need for long term holders to be concerned. The long term trend is up and should continue until proven otherwise.

AUSTRALIAN MARKET:
WEEKLY CHART – XJO

XJO Weekly

XJO up this week +0.94%, thanks to a block buster day on Friday.

Indicators:

1.MACD Histogram. Above zero. Positive. But falling.

  1. MACD. Above zero. Positive.

3.RSI.9  is at 61.8. Positive.

4.CCI.20: +57.6. Negative divergence. Caution.

5.Stochastic: +90.3. Overbought. Caution.

Indicators are signalling caution. Momentum is falling (see MACD Histogram). RSI and CCI both show negative divergences. A couple of indicators I look at (Dynamic Zone RSI and Dynamic Zone Stochastic). but don’t usually show, have flashed sell signals.

XJO 6000 is proving illusive. A break lower through the trough of 9 March would be bearish. It could also offer support. Watch the action if that level is reached (5750).

AUSTRALIAN MARKET:
DAILY CHART – XJO

xjo daily

XJO has been in a consolidation pattern for some weeks.

Indicators:

1.MACD Histogram. Turned up but still below zero. Neutral.

2.MACD. Above zero, just. Positive.

3.RSI.9  is at 55.8. Positive.

4.CCI.20: +0.2. Turned up from below zero. Positive.

5.Stochastic: 34. Turned up. Needs to get above 50.

The medium term trend is up. The short term trend has reversed to the upside with Friday’s big up day.. The ascending triangle pattern was broken to the downside on Friday. That’s bearish..

Two support levels lie nearby, one at the late March lows, and one at the early March lows. The late March lows seem likely to be tested on Monday, that level is at 5846. The early March lows are around 5800 (round figures).

There’s not much point in speculating about what might or might not happen.

This has been a relatively long sideways consolidation. When we see it resolved either to the upside or the downside, we’ll know what to do.

In the meantime – this is a short term traders’ paradise. Good luck to them.

AUSTRALIAN MARKET:
BEST WEEKLY SECTOR: XMJ

xmj

UUP

On Friday, XMJ broke upwards from its sideways consolidation where it’s been since mid-March. This looks the goods.

Our Materials Sector is largely governed by world commodity prices (especially base metals, iron ore and energy) which are priced in U.S. Dollars. While the U.S.$ is rising, commodity prices tend to fall. (I’ve made this point several times in recent Weekly Reports.)

So basically, our Materials Sector is a captive of changes in the U.S.$.

While our Materials Sector broke upwards on Friday, the U,S.$ Index which has also been in a sideways consolidation, broke downwards below a symmetrical triangle and the Super Trend Line – thus confirming the bullish break-out by our XMJ during the Friday session.

AUSTRALIAN MARKET: WORST SECTOR, XFJ.

XFJ

XFJ down this week, -0.19%. It broke below horizontal support on Monday forming an “Adam and Eve Double Top. It then broke below the Super Trend Line on Wednesday.

Friday was a big up day +1.24% (along with the rest of the market). Friday completed a three day bullish reversal, big down day, narrow range stumpy day, big up day. These are relatively reliable in the short term. So the bearish downside break we saw completed on Monday has a good chance of being over. It may, of course, just be a test of the old support level as resistance. We should know Monday/Tuesday of the coming week.

AUSTRALIAN MARKET:
ALTERNATIVES – IOO & IEM

ioo

IEM

As mentioned previously, iShares provide Australian investors the opportunity to invest in overseas markets – and are a cost effective method of doing so as iShares are tradable on the Australian stock exchange.

Looking at the two stocks, it can be seen that both IOO and IEM have been in strong uptrends since mid-2011. IOO has performed the better of the two but has been giving ground recently to the Emerging Market ETF. This week IOO is flat +0.15%. IEM is up +0.4% this week. Because of low liquidity in these shares, they are often quite volatile on an intra-day basis, which destroys some of the usual technical analysis methods. At this stage, both shares retain bullish profiles.

Both shares have been in strong up trends for most of this year. There doesn’t appear to be much more upside at this stage. But, unless something catastrophic happens we’ll maintain holdings in these two stocks as long term investments.

Price of these two ETFs are governed by two main factors: the price of the underlying shares in their home markets, and the level of the AUD/USD. Falls in the Australian $ help both of these stocks as they are un-hedged for currency effects. They are, at least in part, a bet on a rising US$. While the long term trend in the US$ is up, that helps put a floor under these two ETFs. As mentioned previously, the U.S.$ Index is looking under pressure, so we may see more downside in these stocks in the near term. Any weakness in the Australian $, however, would benefit both stocks.

I don’t have detailed charts for the third Alternative Investment, IAF – Australian Bonds. It was flat this eek, 0.00%. IAF went ex-dividend on 7 April. Dividends are paid quarterly.

Currently IAF is very oversold. Big volumes went through in the stock on Friday, and although down, showed intra-day buying, so its current weakness may be coming to an end.

AMERICA: MAJOR AMERICAN INDICES

Major American

Recently I’ve been featuring the Dow30 in this part of the Report. The Dow30 has been a bit stodgy lately, while the rest of the market has continued to surge. The Nasdaq and SP500 this week recorded all time highs. The other two major, and broad based indices, NYA and R2K, are both at or near record highs. Only the Dow30 is lagging.

Breakouts to new highs are usually considered to be bullish, so, at this stage, I can’t see any great dangers emerging from America. Australia doesn’t have a particularly good correlation to the American market. Why should we? We have two vastly different types of economies. But, major turning points leading to corrections invariably impact the stock markets of other developed economies. So we’ll continue to watch America for such an event – but, in the meantime, there’s not much point in looking to it for a lead as to where we might be headed.

SUMMARY & CONCLUSION

World Markets:

First, a weekly summary of major world stock markets: Australia up 0.94%. German DAX +1.05%. U.K. +1.09%. SP500 +1.75, Japan +1.87%. China88 up 0.36%. Emerging Markets ETF (US$) +2.69%. Global Dow (US$) +1.74%.

Commodities and Currencies.

Copper Futures -0.94%.   GLD (ETF for US$ Gold) -2.21%, Crude Oil -0.3%. U.S.$ Index -0.43%. AUD/USD up +0.54%

Last week I was pessimistic about the short term future. Fair enough for the first four days, then the Australian market rebounded strongly on Friday to finish on the plus side for the week.

The XJO remains in a sideways consolidation. I really don’t think there’s much point in speculating about the near term future while that condition exists. Medium term will depend on which way the Index breaks out of the consolidation. Many people will, of course, point to “Sell in May”. Is that reasonable? That call, of course, comes out of America. The statistics for America since 1963 show that May has been up 60% of the time for an average gain of +0.6%. So it is a myth. But every month can possibly result in a major reversal. Just check what is happening currently and forget the sloganeering.

I am keen, however, on prospects for our Miners.

Redbacka.

For daily updates – check https://redbackmarketreport.wordpress.com/

APPENDIX – DIVERSIFIED PORTFOLIO

The Diversified Portfolio breaks down into two groupings – investments which will be adjusted according to different criteria.

GROUP ONE: STW, IOO, IEM, IAF. To be rebalanced quarterly so as to maintain equal weightings. Any variance less than 5% and the holdings will be left as is so as to reduce costs. Exit any of these stocks if they fall below the 100-Week MA – that’s to avoid catastrophic events such as occurred in 1987 and 2008. (I’m going to revise this criterion – but, at this stage, I’m still working on ideas.)

GROUP TWO: The holdings in this group are dynamic, and can be broken down into two sub-sections:

  • A. Short term Holdings. Based on the best two performing Sectors in the previous month. Hold for one month. (1/1) For March, the two stocks to be held will be BHP and Crown (CWN). New Criteria – Don’t enter if the daily Heiken-Ashi chart for the Stock shows a bearish candle. Exit any stock bought if a bearish Heiken-Ashi candle appears. Re-enter if a bullish Heiken-Ashi candle appears
  • B. Medium term Holdings. Based on the best two performing Sectors in the past six months. Hold for one month. (6/1) For March, the two stocks to be held will be CSL and TLS. New criteria – exit if the weekly Heiken-Ashi chart for the stock shows a bearish H-A candle.

As a result of experiences last month, it was clear that Group Two stocks needed more quick responsive action if losses were to be contained.   Using the added criteria for the short term pair of stocks, BXB will be sold on Monday on opening as the weekly Heiken-Ashi candle is a bearish candle.

Since inception on 9 February, the DP is down -0.4%, while the XJO (the benchmark) is up +2%. The DP was affected adversely by big falls in BHP and CWN during March. But despite those falls, there still isn’t much difference between the DP and the XJO. That attests to the advisability of diversification. If management of the short term positions can be improved, we should be able to improve the overall standing of the DP as compared to the XJO. (Let the winners run, and cut the losers short.)

I’m adding long-term management criteria. If the 20-Month MA is crossed to the downside by the 10-Month MA, I’ll exit all positions and put funds into Australian Bonds. When the monthly chart crosses above the 10-Month MA, I’ll re-enter the market.

This is a mish-mash of stocks and ETFs. It is also a mixture of long term holdings and shorter term holdings. It includes Australian stocks and International stocks.   It involves some stocks basically using a buy-and-hold strategy, Group A – rebalanced quarterly if necessary. Group B is a set of four stocks which will change over time depending on the best performing momentum stocks. This is a dynamic group, constantly changing.

This portfolio is not a recommendation for anybody. The ideas are a work-in-progress, i.e., they are experimental, adjusted with the experience of hind sight. This is, of course, open to the charge of “curve fitting”. OK. If that’s the case. So be it. But, I’ve made the adjustments on the basis of general principles – not in order to fit the curve. Let’s see how it plays out.

Categories: Uncategorized

Mixed. Saturday Morning Joe. 25 April, 2015

April 25, 2015 Leave a comment

American Major Indices:

Results were mixed.  Nasdaq went on to new all time highs, +0.71%.  Russell 2000 was down -0.31%.  The blue chips (Dow 30) flat at 0.12%.  The big caps (SP500) +0.23%.  And the broad market index (NYA) dead flat at +0.01%.

Screen Shot 2015-04-25 at 10.19.23 AM

Here’s the detailed chart for Dow Jones Industrial:

Screen Shot 2015-04-25 at 10.33.10 AM

Same old, Same old, still consolidating.  Today was a narrow range day – the narrowest since 27 March, about a month.  Expect a big day on Monday.  Not much else to say.  Wait and watch.

Commodities:

Screen Shot 2015-04-25 at 10.37.21 AM

US$ (UUP) down -0.39%.  The broad commodity ETF, DBC, was flat -0.06%.   But Base Metals responded to the lower U.S.$, up +1.36%,. Energy +0.4%.  But Gold accelerated to the downside.  It is marching to a different drummer, -1.4%.

Oz Stocks in NY:

BHP +3.7%.  Rio +1.89%.   Westpac +1.14% and ANZ +1.63%.  RMD -10.47% (poor report, RMD carked it).  Woodside +1.31%.  EWA +2.26%.  AUD/USD +0.53%.  Those good results (except RMD) follow on from a very strong Friday in Australia.

Monday in Australia will be very interesting.  I’m expecting a big Monday in the U.S.  Which way?  Don’t know.  Australia might pre-empt any big move coming in the U.S. – so we could have another big move coming in Australia on Monday.  Watch which way soon after the opening.

Redbacka

Categories: Uncategorized

Still consolidating. Friday Morning Joe. 24 April, 2015.

April 24, 2015 Leave a comment

American Major Indices:

The broad market indices were up moderately.  (NYA +0.42%,  R2K +0.48%, Nasdaq +0.41%).  The Blue Chips up a bit (Dow 30 +0.11%) and the large caps up modestly (0.24%).  So there is underlying strength in the market.

Screen Shot 2015-04-24 at 9.37.15 AM

Here’s the detailed chart for Dow Jones Industrial:

Screen Shot 2015-04-24 at 9.51.30 AM

Dow 30 remains in a side ways consolidation.  Not much else to say.  Wait and watch.

Commodities:

Screen Shot 2015-04-24 at 9.44.52 AM

US$ (UUP) down -0.74%.  The broad commodity ETF, DBC, was up strongly +1.24%.   Base Metals went against the general commodities trend -0.38%, but it was a mixed bunch.  Copper was up strongly while some of the others were in the minus camp.   Iron Ore up +1.7%. Energy +1.68%.  GLD up, +0.73%

Oz Stocks in NY:

BHP +2.97%.  Rio +3.41%.   Westpac +0.1% and ANZ -0.18%.  RMD +0.14%.  Woodside +2.13%.  EWA +0.73%.  AUD/USD +0.32%.

So long as the Banks cooperate, we’ll have a good day today.

Redbacka

Categories: Uncategorized

On the cliff edge. Thursday Evening Post-prandials. 23 April, 2015.

April 23, 2015 Leave a comment

XJO up today, marginally, +0.13%.  Volume increased over recent days.  So we have a short stumpy candle on heavier volume – sharp move, one way or the other.  A break to the downside tomorrow would be bearish.  A break to the upside tomorrow would be bullish.  Here’s the chart:

xjo

XJO is sitting on the brink of the cliff.  Indicators are mildly oversold.  CCI is showing a small positive divergence – it needs an up day to confirm.  Tomorrow could be interesting.

BHP

Screen Shot 2015-04-23 at 9.55.28 PM

BHP broke out topside today, +2.61%.  Next level of resistance is not far away.  It finished today at 31.06.  Next level of resistance is 31.49.  After that is clear sailing for a while.  Looks good.

CBA

Screen Shot 2015-04-23 at 9.59.04 PM

CBA continued its slow creep downwards today, -0.44%.  It’s getting close to a bottom, but we might need to see a wash-out day to feel comfortable about a return to the upside.  Something shhoting past the 100-Day MA then a rebound would be nice.  I can only wish.

BXB

Screen Shot 2015-04-23 at 10.02.41 PM

BXB has had six down days in a row.  Today’s candle was a hang-man occurring right at the 100-Day MA.  A good move up tomorrow would be bullish.  Indicators are very oversold.  Anything below 30 on the RSI is likely to see some sort of a rebound.  Today the RSI on BXB finished at 22.44.

TLS

Screen Shot 2015-04-23 at 10.06.36 PM

TLS had a nudge upwards today, after being a lot lower.  Up +0.16%.  It remains in a sideways channel.  It needs to get back above 6.43 before I can consider this medium term trend to be over.  Today, TLS finished at 6.26 with a lot of resistance overhead.  Wait and watch on this one.  A break below support at 6.14 would be bearish.

RB.

Categories: Uncategorized

Still Consolidating. Thursday Morning Joe. 23 April, 2015.

April 23, 2015 Leave a comment

American Major Indices:

Most indices up moderately after being down early in the session.  SP500 +0.51%, Dow Industrials +0.49%, Nasdaq +0.42%, Russell +0.11%, New York Composite +0.42%.

Screen Shot 2015-04-23 at 10.20.20 AM

Here’s the detailed chart for Dow Jones Industrial:

Screen Shot 2015-04-23 at 10.29.51 AM

Dow 30 remains in a side ways consolidation.  Not much else to say.  Wait and watch.

Commodities:

Screen Shot 2015-04-23 at 10.28.21 AM

US$ (UUP) flat +0.00%.  Base Metals -0.21%.   Iron Ore up +4%. Energy +0.94%.  GLD continues its short term down trend, -1.34%

Oz Stocks in NY:

BHP +3.35%.  Rio +4.03%.  The big miners got a boost from the IO price.  Westpac -0.1% and ANZ +0.07%.  RMD +0.23%.  Woodside +0.75%.  EWA +0.26%.  AUD/USD +0.58%.

Miners should do well today – not too sure about anything else.  Narrow range, choppy day?

Redbacka

Categories: Uncategorized

Still Consolidating. Wednesday Evening Post-prandials. 22 April, 2015.

April 22, 2015 Leave a comment

XJO down 0.59%.  Volume was up on the past couple of days but is still at subdued levels.

Screen Shot 2015-04-22 at 9.29.02 PM

The chart remains within the sideways consolidation which has now lasted about two months.  CCI and RSI were mildly oversold, but have now moved back up.  Stochastic and MACD Histogram need another up day to move to the upside.  The three candle pattern for the past three days is supposedly bearish, but I’d want to see confirmation of that with a move to the downside on the fourth day.

We just have to be patient and wait.

Despite the market being down today, the TRIN returned a bullish figure of 0.73.  Yesterday the market was up and returned a bearish TRIN figure.  Today the market was down, and it returned a bullish TRIN figure.  So, tomorrow should be up right?  If only it was so easy.  The cumulative 5-Day TRIN was below 4 – too bullish.  It has now moved back above 4 so some softening in the market could be expected.  Looking at the chart any move down would place the Index in a precarious position.  Watch.

Some blue chip stocks of interest:

TLS

Screen Shot 2015-04-22 at 9.42.04 PM

TLS is in a sideways channel.  It continued the upside bounce began on Monday.    The positive divergence on the MFI suggests this will head up to the top of the sideways channel at around 6.41.  It finished today at 6.25.  Indicators were oversold and are now rising. Positive.  The longer term profile of this chart is, however, bearish.

CBA

Screen Shot 2015-04-22 at 9.46.27 PM

Indicators on CBA were oversold and have now swung up.  It was down today -0.72% and came under intra-day selling pressure.  Indicators are oversold, but not extremely, so I suppose this can go lower – but not much.  I’m looking for a bounce in CBA in the near future.

BHP

Screen Shot 2015-04-22 at 9.52.44 PM

BHP was down today -1.08% but was down about 2% earlier in the day.  So it wasn’t a bad performance on an intra-day basis.  BHP still needs to get above the Super Trend Line to prove its bullish credentials.  Most of the indicators are benign – not giving much one way or the other.

CSL

Screen Shot 2015-04-22 at 9.57.27 PM

CSL was off the pace a little today, down -0.23% and showed some intra-day selling as the market declined..  Like much of the market it is in a sideways consolidation and remains above the Super Trend Line and horizontal support.  A break below those would be bearish.

RB.

Categories: Uncategorized
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