Thursday Morning Joe. 26 November, 2015.

November 26, 2015 Leave a comment
Major Indices, Europe and America

Germany +2.15%, UK +0.95%, France +1.51%, Italy +1.87%.   Tuesday, the Europeans were spooked by events in the Middle East.  In this session, that had all been forgotten.

Screen Shot 2015-11-26 at 10.46.07 AM.png
DJ +0.01%.  SP500 -0.01%.  Nasdaq +0.26%.  New York Composite +0.01%, Russell2000 +0.77%.  Most American indices were essentially flat.  R2k has had a couple of good days but that hasn’t shown up in the NYA, so we can’t take too much notice of that.
 Screen Shot 2015-11-26 at 10.50.18 AM.png


The NYSE NH/NL Ratio remains below its mid-line at 46.6%.  Nasdaq NH/NL Ratio is also below par at 40.9%.

Here’s a regular candle stick chart for the SP500:


Screen Shot 2015-11-26 at 10.58.41 AM.png

The Super Trend Line is proving to be effective resistance.  But there’s plenty of support below the current levels.  This can go either way.
Accumulation/Distribution remains relatively strong.  So that favours the upside.
This session was the day before the Thanksgiving Holiday.  Friday is a half day.  So don’t expect anything exciting to happen on Friday, barring black swans.


The Europeans were very strong last night, and Australia is following on from their strong session.  XJO after two hours of trading +1%.
BHP, however, is losing ground again, currently down -2.9% at 19.10.  Woolies is having its Annual General Meeting and is currently down -0.25% at 24.32.  Financials are extremely strong, CBA up +1.95%.  Telstra is also doing its bit, up +1.59%
The Australian market usually springs a surprise movement when the Americans have a holiday not experienced in Australia.  Today seems to be the surprise day.  Don’t expect a lot tomorrow.  But, you never know.
Tomorrow is also Options Expiry Day.


Categories: Uncategorized

Wednesday Liqueurs. 25 November, 2015.

November 25, 2015 Leave a comment

XJO down -0.63%.    Volume was about average. Screen Shot 2015-11-25 at 10.02.29 PM.png

Yesterday saw a short-term sell signal.  Today that played out.  There might be more in this.  An important horizontal support level lies just below the current level.  That might stop any further deteriorations.

There wasn’t a lot of positive action today.  The Gold Miners did well +1.5%.  Energy was also positive +0.9%.

I really don’t have a clue what might happen tomorrow.

Here’s a guess.  Possibly, we’ll see another day down to test support and then a rebound.



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Geo-politics dominates the markets. Wednesday Morning Joe. 25 November, 2015.

November 25, 2015 Leave a comment
Major Indices, Europe and America

Germany -1.43%, UK -0.45%, France -1.41%, Italy -1.55%.   The Europeans were spooked by events in the Middle East.  (Russian plane shot down by Turkey.)

Screen Shot 2015-11-25 at 8.38.48 AM.png
DJ +0.11%.  SP500 +0.12%.  Nasdaq +0.01%.  New York Composite +0.27%, Russell2000 +0.72%.  American indices followed the Europeans down in early trade, but solid intra-day buying took indices back to mainly flat finishes.
 Screen Shot 2015-11-25 at 8.41.23 AM.png


The NYSE NH/NL Ratio remains below its mid-line at 46.6%.  Nasdaq NH/NL Ratio is also below par at 40.9%.

Here’s a Heiken-Ashi chart for the SP500:


Screen Shot 2015-11-25 at 8.52.16 AM.png

The Heiken-Ashi Chart shows a doji candle for today.  That’s suggesting this is a top.  It needs a big down day to confirm.

Indicators have stalled at around their 20-Day MAs.  They need to get over those levels to confirm any bullish ideas.

Accumulation/Distribution remains relatively strong.  So that favours the upside.
Trading in America is just about over for the week.  Thursday is Thanksgiving.  Friday is a half-day trading.  Wednesday will be very light volume – that could favour bulls.
US$ and Commodities:
Screen Shot 2015-11-25 at 8.47.04 AM.png
UUP (US$) down -0.19%.  The weak dollar helped commodities to firmer finishes.  DBC +1.61%.  Energy +2.76%.  Base Metals 2.55%.   Precious Metals +0.83%, Gold +0.66%.  The PMs look like they’re forming a base.
Iron Ore finished at 43.4.  That’s a new multi-year low.
Oz Stocks in NY


Screen Shot 2015-11-25 at 8.58.16 AM.png

Oz stocks in NY were helped by a stronger AUD +0.87% and good metals prices.  BHP +1.2.3%, RIO +0.32%, Woodside +0.83%, Westpac +0.43%, ANZ +0.4%, Resmed +1.09%,  News Corp +0.97%, EWA +0.62%.

We finished strongly on the downside yesterday.  We might take a pause today.


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Tuesday Evening Liqueurs. 24 November, 2015.

November 24, 2015 Leave a comment

The XJO was down -0.95% on heavy volume.  This came after five days in a row on the upside.

Screen Shot 2015-11-24 at 8.40.01 PM.png

The RSI.2 (a very short term oscillator) reached a reading of 95.8 yesterday – extremely overbought (short term) and the market fell today.  Any reason given by the pundits?  None that I can see.

Today’s candle is a bullish engulfing candle – another reason to suspect that we’ll see more down side in the short term.

This week is Options Expiry week in Australia.  So there’s good reason for the Market Makers to try to keep prices down around the current levels so that most Options will expire worthless.  They don’t always win – but it is a pressure that affects the market.

All sectors were down today:

Screen Shot 2015-11-24 at 8.49.06 PM.png

The miners fared particularly poorly (XMM -1.9%) while Property was the best performer -0.2%.

On a relative basis, Health, Utilities and Industrials remain the best performing indices.  Mid-caps are outperforming Small Ords and the 50-Leaders.  So, if you must take a punt, you might look at mid-cap stocks from Health, Utilities and Industrials.  Look for a pull-back and then a bounce.

Screen Shot 2015-11-24 at 8.53.00 PM.png




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Markets Stalled. Tuesday Morning Joe. 24 November, 2015.

November 24, 2015 Leave a comment
Major Indices, Europe and America

Germany -0.25%, UK -0.46%, France -0.44%, Italy +0.7%.  The rally in Europe has stalled.

Screen Shot 2015-11-24 at 8.17.13 AM.png
DJ -0.17%.  SP500 -0.12%.  Nasdaq -0.05%.  New York Composite -0.22%, Russell2000 +0.44%.  American indices have also stalled.
 Screen Shot 2015-11-24 at 8.19.59 AM.png


I can’t find any news about the Fed. decision on the discount rate.  It was supposed to be announced at 1.35 p.m. NY time.  About that time, the Dow Jones began a fall of about 75 points.  Nothing dramatic, but definitely negative.  It then recovered about 50 points of that in the last hour or so.  The day’s trading finished as a narrow range day with not much change to the indices.

The NYSE NH/NL Ratio remains below its mid-line at 43.4%.  Nasdaq NH/NL Ratio is also below par at 45.7%.

Here’s a regular candle stick chart for the SP500:


Screen Shot 2015-11-24 at 8.30.27 AM.png

SP500 remains trapped under the Super Trend Line but above the  20-Day TMA and horizontal resistance.  Support and Resistance – one has to give way soon.  A big down day from this level would be bearish.

Indicators have moved up positively.  DZS has moved above its lower Bollinger Band which is a good sign.  It is now at its 20-Day MA – which is often an important level.  (Not shown on the above chart.)  But the index usually pauses here, pulls back a little and then moves higher.  Not always, but usually.

Accumulation/Distribution remains relatively strong.  So that favours the upside.
US$ and Commodities:
Screen Shot 2015-11-24 at 8.35.28 AM.png
UUP (US$) up +0.15%.  DBC  was pushed up by good energy prices +0.78%.  Energy -1.2%.  But the metals suffered from the better U.S.$.  Base Metals -0.96%.  Energy -0.16%.  Precious Metals -0.64%, Gold -0.81%.
Iron Ore finished at 44.2.  That’s just a smidgin above multi-year lows set in July at 44.1.  Some smaller iron ore producers become uneconomic at these price levels.
Oz Stocks in NY


Screen Shot 2015-11-24 at 8.42.44 AM.png

BHP -2.3%, RIO -0.1.33%, Woodside -0.71%, Westpac -0.35%, ANZ +0.12%, Resmed -1.13%,  News Corp +0.28%, EWA -0.62%, Oz Dollar -0.59%.

We’ll open on the downside today, but I can’t see a lot happening.


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Monday Evening Liqueurs. 23 November, 2015.

November 23, 2015 Leave a comment

XJO up modestly +0.39% on average volume for a Monday.

Screen Shot 2015-11-23 at 9.56.02 PM.png

The Index has now had five days up in a row and is approaching the Standard Error Channel.

We might get another day or two on the upside, but usually an approach to the top restraining line of the SEC limits further advances.

The index isn’t especially overbought so a bit more upside seems likely.

All of that might add up to nought given events in America tonight.  The Federal Reserve meets to discuss the discount rate.  This is not a regularly scheduled event.  We don’t know why it has been called.  But such events are usually important.

The discount rate is the rate the Fed charges banks to borrow from it on an overnight basis.  Of itself, it may not mean much.

But the fact that the Fed is calling a special, unscheduled meeting suggests that any movement on the discount rate at this meeting could have wider ramifications, i.e., general interest rates charged by the Fed.
So tonight’s decision could have ramifications for markets.


Wait and see.



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Sunday Smorgasbord. Weekly Report, Week Ending 20 November, 2015.

November 22, 2015 Leave a comment


  1. Australian Market:  Weekly Performance Chart
  2. Australian Market: Sector Ratings, Medium and Long Term
  3. Global Performance: Weekly Chart
  4. Australian Market. XJO – Monthly, Weekly, Daily Charts.
  5. ASX 100 – Stock Ratings
  6. America – Daily.
  7. Summing up.


Screen Shot 2015-11-22 at 4.45.32 PM.png

All Ords up very strongly, +3.79%. All Sectors were up, with Energy doing best +6.6%.  Don’t let that fool you, however, it is highly volatile and has a history of being the best performer one week and the worst performer the next week.  Information Technology, +5.47% and Telecomm +5.23% round out the top three.  Telecomm has been a poor performer in recent weeks, so it is still to be seen whether this week represents a turn-around or just a counter-trend rally.

Materials continued to be the worst performer on a relative basis, up +2.13%.  Not a bad result for the worst performer.  Everything else was up at least +3%.

This week there were 6 New 52-Week Highs in the ASX100 and 9 New 52-Week Lows.  So, despite the very strong performance, New Lows on the ASX100 out-numbered New Highs.

74% of ASX100 stocks were positive on the Detrended Price Oscillator.  That’s in keeping with the strong weekly rally.

44% of ASX200 stocks were above the 200-Day MA.  We need to see 50% above the 200-Day MA to feel more confident that we’re in a bull market.  But the 44% figure is the best we’ve seen for a few weeks.


Screen Shot 2015-11-22 at 4.53.57 PM.png

Australia’s XJO performed better than most of the major markets I monitor,  -4.05%. All of the other indices were positive.  Emerging Markets did best +4.71% and China did worst (relatively) +0.52%.  America, Germany, and the UK were all up more than +3%.

AUSTRALIAN MARKET: XJO – Monthly, Weekly, Daily.

Screen Shot 2015-11-22 at 4.58.13 PM.png

Screen Shot 2015-11-22 at 6.57.58 PM.png

Screen Shot 2015-11-22 at 5.00.42 PM.png

We can see clearly from these three charts just how important is the 4980 (round figures) horizontal support from 2010/11.  If that cracks we’re going to see much lower prices.

On the weekly chart we can also see who important is the 20-Week MA.  The XJO has been held down by that marker since it broke below there in early May, 2015.  I’ve shown that with an oval and long, black arrow.  The chart has been rejected at the 20-Week MA three times since May, 2015.  I’ve marked those with small down arrows.    It is now coming up to the 20-Week MA for the fourth time.  If it fails again at this level, we could well see the 20-Week MA cross negatively below the 200-Week MA while the Index is falling.  That would be a very bearish sign.

At this stage, however, the major support level from 2010/11 has held, and so long as that holds, the odds favour the upside.


I might name this section “Follow the Money”.  These ratings look at the strongest and weakest stocks and sectors in the ASX100.  Sectors and Stocks doing better than the XJO should be considered by investors/traders.  That’s where the money has been going.

Below is a chart showing the relative ratings for the Sectors on a medium term (blue bars) and long term (red bars).  The strongest sectors are Utilities, Health and Industrials.  Mid-Caps are stronger than the 50-Leaders.  So it might be best to look for mid-cap stocks in those three sectors.  That’s a very general picture.  Within any sector there may be stocks which are doing much better than their Sector, and much better than the XJO.

Screen Shot 2015-11-22 at 8.30.43 PM.png

To Make the Stock Ratings Charts more useable, I’ve grouped stocks according to Sectors.  Ratings for all sectors and all stocks in the ASX100 are provided.  These are all based on relative performance compared to the XJO.  Red bars are based on one year performances, and blue bars on 52 day performances.  In each chart, the Sector Rating is the first set, then the stocks in the sector in alphabetical order.

Utilities.  Long Term RS 1.22.  New 52-Week High.

Screen Shot 2015-11-22 at 8.52.01 PM.png

All stocks are performing well.

Long term, the best performer is AGL.

Industrials.  Long Term RS 1.26

Screen Shot 2015-11-22 at 8.57.25 PM.png

The Industrial Sector is only slightly ahead of the Utilities Sector.  It has four very strong stocks with RS above 2:  AIO (under take-over considerations), Aristocrat Leisure, Qantas, Sydney Airport.  Downer EDI is clearly the worst.  Avoid.

Materials.  Long Term RS -0.98.  

Screen Shot 2015-11-22 at 8.59.05 PM.png

Materials is a mixed bag.  The best known stocks are the miners, but it also includes Building Supply stocks (e.g., BLD, BSL, CSR, DLX, and JHX) and Packaging stocks (e.g., AMC and ORA).   The miners are generally doing poorly.  FMG was doing well but the general sentiment towards the sector seems to be working against it as well as the other big miners.

No stock in the sector is a standout, but some of the non-mining related stocks are doing moderately well.

Financials X-Property.  Long Term RS -0.03

Screen Shot 2015-11-22 at 9.03.04 PM.png

When we think Financials X-Property, we usually think banks and insurers.  And they are the big stocks in this group.  But the best performers are three Financials Services Stocks.  Magellan Financial (MFG) 3.72, Challenger (CGF) 3.09 and Henderson (HGG) 2.57  These are all Fund Managers, not banks or insurers.

The best bank isBank of Queensland, a second-tier mid-cap stock, is doing better than any of the four big banks.  Rating 1.62.  The Investment Banker, MQG with a long term RS of 1.59 is running close to BOQ.

Short term, the big four banks have improved, but, until proven otherwise, we have to view this as a counter trend rally.  ANZ and NAB, for example, are coming off 52-Week lows.

Health Long Term RS 1.1 and Information Technology Long Term RS 0.56

Screen Shot 2015-11-22 at 9.07.55 PM.png

For several years, Health was probably the best performing sector in the Oz market.  It lost a bit of ground in the recent volatility, but is once again gaining ground.

In this group there are some good solid stocks with high Long Term Relative Strength Ratings:  Cochlear (COH) 1.62, CSL 1.35 and Ramsay Health Care (RHC) 1.39.  Cochlear is now the highest rated stock.  The only dog is Primary Health Care -2.41.  It performed poorly this week in an otherwise strong market.

Information Technology has only two stocks so I’ve bunched them together with the Health Stocks.

IT Long Term Relative Strength is 0.56.  Neither stock is strong enough to warrant much thought.

Consumer Staples.  Long Term RS -0.26.

Screen Shot 2015-11-22 at 9.17.29 PM.png

I’m sure that all wine drinkers will be pleased to note that Treasury Wines is considered a “Consumer Staple”.  Treasury Wines is the stand out here.  Long Term Relative Strength at 4.22.  Nothing else in the group comes close.

Energy.  Long Term RS -1.42.  

Screen Shot 2015-11-22 at 9.20.36 PM.png

Energy was the best performing sector this week, but longer term it is the worst performer.  So, any good one-week performance should be looked at with suspicion.

Oil Search is under possible take-over action.  Best left to the experts.

Nothing else is performing well in the medium to long term.  Personally, I think this sector is left alone until we see more signs of stabilisation in prices.

Consumer Discretionary.  Long Term RS 0.68.  Telecomm. Long Term RS -0.37.

Screen Shot 2015-11-22 at 9.23.03 PM.png

Consumer Discretionary is a mixed bag.  Pizza makers, casinos, electronics discounters, lawyers, real estate advertisers, etc.

Domino’s Pizza is one of the best performers in the ASX100,  long term RS is 4.   That’s way ahead of the next best performer in this group, the real estate advertiser REA, long term Relative Strength 1.67.

Slater and Gordon is the dog.

Telecomm has only two stocks.  One is doing badly, Telstra (TLS) long term RS -0.59 and one is going gang-busters TPM (TPG Telecom) long term RS 2.24.  Telstra did well this week, up +5.25%.  But, until proven otherwise, I think we have to treat this as a counter-trend rally.


Here’s the daily Chart for the SP500:

Screen Shot 2015-11-22 at 9.30.59 PM.png

SP500 up -3.27% this week almost erased the previous week’s big fall, but not quite.  The chart is now back to the Super Trend Line which sometimes presents resistance.   The past two days have been narrow range days.  Friday was Op-Ex day which is usually a narrow range day, so Friday may not mean a lot.  But, if we get a big down day on Monday, then we could be looking at a bearish weak.  The coming week in America is shortened by Thanksgiving which falls on Thursday.  Trading on Wednesday and Friday is likely to be light on in volume.  That would create a situation where the market can be moved around through manipulations of futures contracts.  Next week is setting up to be very interesting.   .



I’ve been concerned about breadth on the U.S. market.  It has rebounded quite well from late September, but many breadth indicators are not supportive of the move.  Below is the Cumulative NewHighs/NewLows chart for the NYSE:

Screen Shot 2015-11-22 at 9.45.54 PM.png

The NH/NL Cumulative Index topped out in late June, then headed south.  It was an early predictor of the big fall in the SP500 in August.  Cumulative NH/NL hasn’t recovered since.  It has been consolidating at the lows.  Consolidations usually resolve in the direction of the prevailing trend, which is down.

Summing up:

Australia was very strong this week, along with most other markets.  Consumer Staples and Energy both made a new 52-Week Low this week.  That’s not a positive in a week when the market was very strong.  Energy was very strong in the latter part of the week, and finished the strongest sector in our market.  But, until proven otherwise, the recent strength has to be viewed as a counter trend rally.  The best three sectors are Utilities, Health and Industrials.  Utilities made a 52-Week High.

New York was strong this week with the SP500 up +3.27%.  But the Cumulative NewHigh/NewLow Indicator isn’t confirming the current SP500 strength.  Until we get confirmation by such breadth indicators, we have to view the current rally with suspicion.

Monday sees a special meeting of the U.S. Federal Reserve to discuss the discount rate.  The discount rate is a mechanism whereby banks can borrow from the Federal Reserve.  If the Fed raises the discount rate, that will probably signal that a December rate rise in American interest rates is a done deal.  This might be the way the Fed. is attempting to advise America (and the rest of the world) that the expected December rate rise is a certainty.  That will impact markets.  We’ll have to watch how markets react to that event.  We could see some big changes in the Australian market on Tuesday, the first chance our market will have to react to the American decision.

I’ve made a point, over and over, that the horizontal support/resistance line from 2010/11 is key for out market.  For some months now that has held rock solid.  A further bounce to the upside would be bullish and make a Santa Rally look like a good thing.  A break below that level (4980 on the XJO) and you can forget Santa.





Categories: Uncategorized

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