Wednesday Morning Joe. 31 August, 2016.

August 31, 2016 Comments off

In America:

Screen Shot 2016-08-31 at 9.43.33 AM.png

Sideways action continues.  Dow Jones -0.26%, SP500 -0.2%, Nasdaq -0.18%, New York Composite -0.13%, Russell 2000 -0.09%.  Indices are generally hovering around the 20-Day SMA, a measure of the short term trend…  RSI on the DJ is at 50 – the mid-point.

NYSE NewHigh/NewLow Ratio remains bullish at 96.6%.   New Lows are at6.  That’s a low figure.  If we see a big increase in New Lows, the up trend could be in trouble.  We haven’t seen that today.  NH/NL Ratio has been a good guide for remaining with the up trend.

SP500:

Screen Shot 2016-08-31 at 9.49.17 AM.png

SP500 continues to trade in a narrow range with volatility low.  MFI is now below its mid-line.  DPO is just above zero.  CCI is just above zero.  The Bollinger Bands on the long-term Stochastic (50.10.10) are squeezed tightly together.  The last two times that happened at the highs a down turn occurred.  It wouldn’t take much more to send this into a short term down trend.  Indicators are generally not a lot of use in low volatility, narrow range environments.  So we’ll just have to wait for a significant break in the sideways trend.

Commodities:

Screen Shot 2016-08-31 at 9.51.39 AM.png

 

 

DBC, the Commodities Index tracking ETF, down -0.98%.  This pullback is likely to be bought.  Energy down -1.06%.  Industrial Metals flat, -0.59%. Gold down -1.01%.  Gold is entering a seasonally favourable period, but we’ll have to wait for this down trend to end before thinking about taking a position. Iron Ore up +0.3%, now at 59.

After yesterday’s action, XJO was at the lower end of a narrow range.  I doubt we’ll see a break below that range today, but, you never know.

RB.

Categories: Uncategorized

Tuesday Evening Liqueurs. 30 August. 2016.

August 30, 2016 Comments off

XJO up marginally, +0.17%.  Volume was on the low side for a Tuesday.  Not much movement – low volume.  That is a slight negative bias.

Screen Shot 2016-08-30 at 9.31.21 PM.png

Some days, I often think I am reading Tea Leaves in a Tea Cup (as the Fundamental Analysts like to criticise the Technical Analysts.)

In sideways markets, there’s probably some truth to that.  The markets keep on churning, and the Technical Analysts keeping on looking for clues – which, generally, are not forthcoming.

So – really – all we can do is look at the trend.  Currently, it is sideways and back to support.  Until we see a change from that situation, there’s not much more to be said.

We wait and watch.  Patience is a virtue.

By the way – I think the criticism made by the fundamental analysts of the technical analysts can also be made in the reverse direction.  I often read Fundamental Analysis of this stock or that stock.  Buy this, or sell that – and then I have a look at the chart.  I wouldn’t have a bar of the stock, one way or the other.

There are merits to both sides.  But – if a FA writer takes a shine to a stock – and you look at the chart and it’s in a down trend.  Leave it alone.  He could be right.  In the long run.  But TA will tell you if he is right or wrong.

RB.

 

 

 

Categories: Uncategorized

Tuesday Morning Joe. 30 August, 2016.

August 30, 2016 Comments off

In America:

Screen Shot 2016-08-30 at 9.25.11 AM.png

A better day today, but nothing is resolved.  Sideways action continues.  Dow Jones +0.58%, SP500 +0.52%, Nasdaq +0.26%, New York Composite +0.58%, Russell 2000 +0.56%.  DJ finished below the 20-Day SMA, a measure of the short term trend, others are above.  RSIs for all indices are above 50.

NYSE NewHigh/NewLow Ratio remains bullish at 95.1%.   New Lows are at 11.  That’s a low figure.  If we see a big increase in New Lows, the up trend could be in trouble.  We haven’t seen that today.  NH/NL Ratio has been a good guide for remaining with the up trend.

SP500:

Screen Shot 2016-08-30 at 9.35.05 AM.png

MFI is now below its mid-line.  DPO is just above zero.  CCI is just above zero.  The Bollinger Bands on the long-term Stochastic (50.10.10) are squeezed tightly together.  The last two times that happened at the highs a down turn occurred.  It wouldn’t take much more to send this into a short term down trend.

Commodities:

Screen Shot 2016-08-30 at 9.37.42 AM.png

 

 

DBC, the Commodities Index tracking ETF, down -0.4%.  Any pullback is likely to be bought.  Energy down -0.81%.  Industrial Metals flat, -0.07%. Gold up modestly +0.2%.  Iron Ore down -0.5%, now at 58.80.

We’ll have a better day today.

RB.

Categories: Uncategorized

Weekly Report. Week ending 26 August, 2016.

August 29, 2016 Comments off

Because of commitments over the weekend, this Weekly Report is a little late.  My apologies.

CONTENT

  1. Australian Market: Weekly Performance Charts
  2. Australian Market. XJO – Monthly, Weekly, Daily Charts.
  3. ASX 100 – Stock Ratings
  4. Australian VIX
  5. Top Ten Stocks
  6. Summing up.

AUSTRALIAN MARKET:  SECTOR PERFORMANCES IN THE PAST WEEK.

Screen Shot 2016-08-29 at 8.07.51 PM.png

XAO down modestly -0.32%.

Five out of ten Sectors were up.  Consumer Staples up +2.64%.  Utilities up +1.84%.  Both are defensives and the good rise in Utilities is particularly important from a RiskOn/RiskOff perspective.  Worst two were Health -3.18% and Energy -2.62%.   Health continues to be hurt by a poor performance by CSL -2.77%.

Just when Energy looked like it was moving into an up trend, it turns in a poor performance this week.  That puts it back into its old sideways trading range.

This week 19 Stocks made New 52-Week Highs amongst the top 100 stocks.  The previous week 19 Stocks from the ASX100 made New 52-Week Highs.   That’s maintaining a move up from the low of two weeks ago.

Screen Shot 2016-08-29 at 8.17.54 PM.png

84.7% of ASX100 Stocks are above their 200-Day Moving Averages.  That’s a small drop from the previous week.  This is a measure of the long-term trend in the market.  Currently it remains bullish.  In fact, that may be too bullish.  That continues to be an exceptional reading for stocks above the 200-Day MA.

Screen Shot 2016-08-29 at 8.24.29 PM.png

59.2% of ASX100 stocks are positive on the short term trend measurement indicator, DPO.  That’s a small decrease on the previous week, but still a bullish reading.

Screen Shot 2016-08-29 at 8.22.42 PM.png

XJO, Monthly, Weekly, Daily Charts.

Monthly Chart:

Screen Shot 2016-08-29 at 8.26.56 PM.png

We’re now into the fourth week of August.  The Index is down -1.67%..  Indicators remain positive.  If we take this point in time as the end of the month, we remain in bullish territory, despite the down movement in the index this month.

Weekly Chart:

Screen Shot 2016-08-29 at 8.30.23 PM.png

XJO flat this week -0.2%.  (The most recent candle represents today’s action, which I am discounting as it is not a full week.)

The medium term uptrend is up, but stalling at horizontal resistance.

Major indicators still don’t show negative divergences which usually come before a down turn.  Short term Stochastic (14.3.5) is overbought and the long term Stochastic (50.10.10) is also overbought.  That suggests we’ll see downside action, but any pull-back is likely to be bought.

Daily Chart:

Screen Shot 2016-08-29 at 8.33.47 PM.png

This chart shows today’s action in the last candel.  All indicators are now in bearish territory.  We’re seeing the start of a short-term downside movement.

The chart is hovering at horizontal resistance and the 20-Day MA.

ASX 100 – STOCK RATINGS.

Momentum is one of those anomalies which throws doubt on the Random Walk Theory of Stock Markets.

As a general rule, avoid stocks in the weakest sectors, and look to stocks in the strongest sectors.   (There are always exceptions.)

The following charts show the stocks from the ASX100 in each of the ten sectors.   Relative Strength is a blunt instrument.  Use technical analysis for entry to these stocks.

Remember that the following charts show “relative strength”, i.e., strength of the indices and stocks compared to action in the XJO.  Bars above the zero line do not necessarily indicate that a stock or index is bullish – only that it is doing better than the XJO.

Utilities.  

Screen Shot 2016-08-29 at 8.35.54 PM.png

Utilities was up a little this week, +1.84%

AGL is the largest component of this sector and continues to do poorly.  Three weeks ago its Relative Strength Rating was 0.73; this week it is 0.19.  AST is now the best performer in this sector. It’s Relative Strength Rating is now above o.6, that’s a strong figure.

This week, no Utilities stocks are on 52-Week Highs.

On current prices, AGL pays a dividend of 3.7%.   Other Dividends are:  APA 4.6%, AST 5%, DUE 6.8%, SKI 4.7%.  These are tempting dividends, but until we see a return to favour in the Utilities it might be wise to keep your powder dry.

Industrials:

Screen Shot 2016-08-29 at 8.44.05 PM.png

The Industrials Sector is home to some of the better performing stocks on the ASX100.  Aristocrat Leisure is the standout, Relative Rating 1.19, up marginally from the previous week.

For a few weeks I’ve talked about Blackmore’s apparent outperformance.  It looked good but BKL had fallen below its 200-Day MA so should be avoided.  This week, BKL’s rating has come back to the pack and is no longer a standout at 0.26.

Seek (SEK) and Brambles (BXB) are the next best.  Neither pays particularly enticing dividends.

Other good performers are TCL and SYD.  TCL pays 4.1% and SYD pays 3.8%.

Materials:

Screen Shot 2016-08-29 at 8.49.49 PM.png

Materials was down -1.35% this week.

On the ratings scale it is now above zero and has been performing well in recent weeks.

Bluescope Steel continues to be the standout, up this week +6.91%.  James Hardie, S32 and FMG continue to perform well.

FMG, BSL and JHX made 52-Week highs this week.

Amcor also performed well and pays a dividend of 3.5%.

Financials X-Property:

Screen Shot 2016-08-29 at 8.57.26 PM.png

XXJ is one of the worst performing sectors on a one year basis.  The four big banks are all on the negative side of the ledger.  Forget about the big banks until we see some solid improvement.

The only stocks on the positive side of zero are:  CGF, ASX, IAG, MFG, MPL and PPT.

CGF is the best performing stock and pays a dividend of 3.7%.  CGF is a fund manager.

ASX and PPT made 52-Week Highs this week.  ASX pays a dividend of 3.9% and PPT pays 5.2%.

The banks all pay healthy dividends, but until we see a turn around in their prices, the risk is a bit too high.  No stocks from the Financials X-PTY make it into my Top Ten Stocks.

Health and Information Technology:

Screen Shot 2016-08-29 at 9.03.20 PM.png

Health remains the best performing Index.  Cochlear is the standout.   HSO and COH set new 52-Week Highs this week.  CSL has been very disappointing and is now down to a major support level.  If it can regain upside momentum here, it could be OK.  Watch.

Carsales.com (CAR) is clearly a standout in Info.Tech.  Dividend Yield 3%. CPU has just come off a 52-Week Low.  Avoid.

Consumer Staples:

Screen Shot 2016-08-29 at 9.08.45 PM.png

TWE is one of the best performers in the ASX100 on a 1-year basis. It has a RS rating of 0.88 and was up this week +5.98%.

WES is still the pick of the two big retailers, if you must have one in your portfolio.   Wesfarmers yield is 3%.  For the first time in yonks, Wesfarmers reduced its dividend payout.  It is looking less attractive from a Dividend basis.

WES has been in a wide trading range for most of the past year.  It seems now to be on a down move within that trading range.  If you’re a dividend hunter, it might pay to wait and try to buy at a lower figure.

Woolworths also reduced its dividend payout.  That is now 3.2% down from 4.6%.

Despite all that doom and gloom, XSJ made a new 52-Week High this week, so the big stocks in this sector shouldn’t be discounted.  We may be looking at turn-around stocks, particularly in Woolworths and Coca Cola Amatil.

Consumer Discretionary and Telecomms.

Screen Shot 2016-08-29 at 9.18.03 PM.png

Consumer Discretionary made a new 52-Week High this week.

Three stocks stocks made 52-Week Highs: SGR, Harvey Norman and JB Hi-Fi.  If people are worried about the economy and real estate, this results would suggest that they should take a BEX and a good like down.

DMP is the stand-out.   It’s a growth stock.

JBH pays 3.4%, HVN 4.1%.

Telecomms are interesting.  Telstra remains enticing to the dividend hunter:  dividend +5.9%.  It is now at the lower edge of its trading range, so it might be worth a look. It remains a poor performer on a one-year basis.

VOC and TPM are both performing well, but are growth stocks.

Energy.

Screen Shot 2016-08-29 at 9.23.31 PM.png

On a one-year basis, Energy is a dreary sight.  Last week I was waxing lyrical about XEJ’s prospects.  But it has now fallen back into its trading range.  I’m still optimistic about Energy’s prospects, but we need to wait.

WPL pays a dividend of 4% and Santos pays 4.4%.  But those dividends are not sufficient reason for buying a stock in a down trend.

Property

Screen Shot 2016-08-29 at 9.28.46 PM.png

Property is an industry group in the Financials Sector, but is worthy of standing alone for analysis.  On a one year basis, it is one of the better performers in our market.  It has taken a bit of a hit the past couple of weeks and there might be more downside before we see it stabilise.  Two stocks, however, made 52-Week Highs this week, MGR and Goodman, so they should stay on the radar.

All stocks in the sector pay dividends better than 3% so are worth a look, with the exception of LLC which is performing poorly.

A cost effective entry to the sector is provided by ETFs such as SLF.  According to State Street Global Advisers, the issuer of the ETF, the SLF Dividend Yield is 4.2%.  It went ex-dividend on 29 June.  Dividends are paid quarterly.

AUSTRALIAN VIX:

Screen Shot 2016-08-29 at 9.34.44 PM.png

VIX, sometimes referred to as the Fear Index, is a measure of expected volatility in the coming month.  High Volatility is associated with bearish markets, and Low Volatility with bullish markets.  VIX trades inversely to the market.  When the market is high – VIX is low.

Currently, VIX is now rising off an extreme low. When it starts to rise, it is often a sign that we’re entering a bearish phase.

TOP TEN STOCKS FOR SEPTEMBER:

The Top Ten Stocks for August returned +1.83% while the STW (tracking ETF for XJO) fell -1.06%.  So far, in the past four months, the Top Ten has consistently and significantly beaten its benchmark, the XJO.

The Top Ten Stocks for September are: TWE, Cochlear, DMP, JHX, BSL, ALL, S32, AST, SEK, FMG

Dropped from the list are AGL, MGR, VOC and TPM.

Summing up:

The last week was down modestly and the market has stalled at a strong horizontal resistance level.

The market is overbought and a pull-back is likely.  A moderate pull-back of say 5% would add some value to our market which is currently stretched to the upside.

On a more optimistic note, Materials (XMJ) is improving and a couple of miners made it into the Top Ten for September.

Just remember that we’re coming into the worst months seasonally for our market.  Caution.

RB.

Categories: Uncategorized

Friday Night Liqueurs. 26 August, 2016.

August 26, 2016 Comments off

I don’t normally post on a Friday night, but I have commitments this week-end which prevent me from attending to usual duties.  So, for what it’s worth, an unusual Friday Night Post.

XJO Daily

Screen Shot 2016-08-26 at 10.26.56 PM.png

The Daily Chart is in a sideways trend, oscillating around the 20-Day MA and a major horizontal S/R Level.  CCI is below zero – that’s a negative and usually the first indicator to show a bearish reading.  DPO is just above its zero line, which puts it into a danger zone.

The relationship of the short term Stochastic (14.3.5) to the long term Stochastic (50.10.10) is bearish.  The LT Stochastic BBs have narrowed down and are at the top of their range.  That suggests a downside movement.  The ST Stockastic hasn’t been able to rise above the LT Stochastic – again that indicates a weakness and possible downside movement.

Until we get a decisive move to the downside, this remains a sideways trend, but the probabilities are for a downside break.

Here’s the Weekly Sector Performance Chart:

Screen Shot 2016-08-26 at 11.08.42 PM.png

XAO down modestly this week -0.32%.

Five out of ten sectors were up.

This week’s sector performance was dominated by big differences between sectors largely as a result of Reporting to the ASX and ex-dividend effects.  Consumer Staples (XSJ) was by far the best largely as a result of the performance of Woolworths +4.18%.  Telecomms is dominated by Telstra which went ex-dividend this week, down -3.2%.  But Vocus, which is a significant member of this sector was also down -4.76%.  It has also fallen below its 200-Day MA and is thus disqualified from my Ten Top Stocks for this month.

This weekend sees the Central Bankers of the World meet at Jackson Hole in Wyoming, a picturesque spot near the Grand Tetons.

Most commentators are focussing on the fact that Janet Yellen will be a speaker at the conference and expect her to give some guidance on interest rates.  Maybe she will, maybe she won’t.  She is still bound by the votes of her committee, the Federal Reserve.  I don’t think Yellen has the same sort of power in the Fed as Bernanke or Greenspan, so her ramblings are less likely to provide explicit direction on interest rates.  I think the week-end gab-fest will be a non-event as far as direction of our stock market is concerned.

I could easily be wrong.  We’ll see.

If the market goes down, I think it will be because it was ready to, not because of anything Yellen says.

There won’t be the usual comprehensive Weekly Report this week.

RB.

Categories: Uncategorized

Top Ten Stocks Update.

August 26, 2016 Comments off

Yesterday Vocus (VOC) closed below the 200 Day MA, so it’s position in the Top Ten is now negated.

Screen Shot 2016-08-26 at 10.49.28 AM.png

RB

Categories: Uncategorized

Friday Morning Joe. 26 August, 2016.

August 26, 2016 Comments off

In America:

Screen Shot 2016-08-26 at 9.00.26 AM.png

Another narrow range day with a downside bias.  Dow Jones -0.18%, SP500 -0.14%, Nasdaq -0.11%, New York Composite -0.06%, Russell 2000 +0.22%.  DJ and SPX both finished below the 20-Day SMA, a measure of the short term trend.  RSI for the Dow Jones is now below 50.  DJ usually leads up and down. Caution

NYSE NewHigh/NewLow Ratio remains bullish at 88.4%.   New Lows are at 16.  That’s the highest result since 3 August, but hardly enough to cause concern.  If we see a big increase in New Lows, the up trend could be in trouble.  We haven’t seen that today.  NH/NL Ratio has been a good guide for remaining with the up trend.

SP500:

Screen Shot 2016-08-26 at 9.23.17 AM.png

MFI is now below its mid-line.  DPO is just above zero.  CCI is below zero.  The Bollinger Bands on the long-term Stochastic (50.10.10) are squeezed tightly together.  The last two times that happened at the highs a down turn occurred.  It wouldn’t take much more to send this into a short term down trend.  First major test would be the 50-Day MA and the Super Trend Line which are more or less aligned.  Caution.

Commodities:

Screen Shot 2016-08-26 at 9.26.40 AM.png

DBC, the Commodities Index tracking ETF, up +0.4%.  Any pullback is likely to be bought.  Energy up, +1.06%.  Industrial Metals up, +0.3%. Gold flat -0.09%.  Iron Ore down -0.65%.  Iron Ore remains in a tight sideways range.  Except for one day in August when it fell to 58.9, IO has ranged between 60-61.8.

It looks like we’ll have another narrow range wandering day today.

 

RB.

Categories: Uncategorized
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