Tuesday Evening Thoughts. 22 August, 2017.

August 22, 2017 Comments off

The Australian market had a positive day with the XJO up +0.42%.  STW, a tracking ETF for the XJO, was up +0.61%.

Screen Shot 2017-08-22 at 9.02.54 PM.png

No change has occurred in the sideways trend.

Accumulation/Distribution suggests that accumulation is taking place.  The odds favour an upside break.

BHP announced its results today before the market opened.  The market responded warmly.  BHP up +1.09%.

Screen Shot 2017-08-22 at 9.08.44 PM.png

More upside seems likely for BHP which is a positive for the market.

The other “biggie” watched today was CBA.  It was up a little coming off horizontal support:

Screen Shot 2017-08-22 at 9.41.56 PM.png

That’s not enough to indicate that the downtrend has ended, but the positive divergence on the MFI10 suggests we’ll see more upside in the near future.

RB.

Categories: Uncategorized

Tuesday Morning Joe. 22 August, 2017.

August 22, 2017 Comments off

In U.S.

Major indices finished the day mostly flat.  RSI is reading bearish (below 50) on all five indices.  A bearish cross of the 20/50 Day MAs on the Russell2000 has occurred.   Indices were well down after the first hour of trading., but major losses were erased as the day progressed.

Screen Shot 2017-08-22 at 9.23.13 AM.png

DJ +0.13%, Nasdaq -0.05%, SP500 +0.12%, NYA +0.17%, Russell2000 -0.07%.

The three strongest sectors were: Health +0.45%, Utilities +0.37% and Consumer Staples +0.36%.  XLE (Energy) -0.51 andXLF (Financials) -0.28% were the weakest sectors. Technology was flat -0.04%.  This indicates a defensive market.

SP500:

Screen Shot 2017-08-22 at 9.18.41 AM.png

The SPX finished up a little +0.12%.  The Heiken-Ashi chart remains bearish.  The chart is at oblique support and opposite a congestion zone.  RSI9 and CCI are oversold and showing small positive divergences.  So we could be at or near the low for this pull-back

Commodities:

DBC -1.21%. Energy -2.23%.  Industrial Metals +0.72%. Copper Producers ETF was up +1.67%. Gold +0.38%.  Iron Ore +4%.

Miners should do well today.  CBA is now down to a major support level, so we could see buying come into CBA today.  I wouldn’t be surprised to see our market on the positive side today.

RB.

Categories: Uncategorized

August 21, 2017 Comments off

XJO down today -0.37%.  It was often down -0.8% today, so it finished mid-range.

STW, a tracking ETF for the XJO was down -0.46%.

Screen Shot 2017-08-21 at 9.02.24 PM.png

Today’s candle for the STW shows the intra-day buying that occurred in the STW.  The candle finished about mid-range, i.e., inconclusive.

The Cumulative Volume Index continues to show a positive divergence from the STW and XJO, suggesting Accumulation rather than distribution

 

 

Screen Shot 2017-08-21 at 9.08.37 PM.png

 

Until we see the XJO (STW) break out of its range, it’s best to wait on the sidelines.

RB.

Categories: Uncategorized

Smorgasbord Report for the week ending 18 August, 2017.

August 20, 2017 Comments off

Executive Takeaway. 

World geopolitical tensions calmed down a little this week, but reporting season produced some rockets (seven stocks) and some fizzers (three stocks).  On balance it was a good week for the reporting season.  The XJO remains, however, in its sideways trend.  Until that breaks out one way or the other, it’s best to watch from the sidelines.

CONTENTS

  • XJO Charts, Daily, Weekly, Monthly.
  • Internals – Australian Market.
  • Sector Charts.
  • Summing Up.

XJO Charts, Daily, Weekly, Monthly

XJO Daily:

XJO dl.png

 

XJO remains in a sideways trend.  All the Moving Averages on the chart continue to trundle sideways.

Overhead resistance is marked by the top of the Ichimoku “Cloud” at 5793.2.  This is a dynamic level which will drop a few points in the middle of the coming week.

The XJO remains above its 200-Day Exponential Moving Average.  200-DEMA corresponds fairly closely with horizontal support, only about 23 points difference.  The two close together make for powerful support.

Until we see which way this breaks, it’s best to wait.

XJO Weekly:

xjo wk.png

XJO finished up this week, +0.95%.  The long-term trend is up, but the Index has been sideways for the past ten weeks.  A lot of pent-up energy has been built up during that time.   When a new trend starts it is likely to last for some weeks.

XJO Monthly:

xjo mnth.png

We’re into the third week of August.  XJO is up +0.4+% so far this month.  e significant.

All indicators are on “sell” signals.

The 2-Month MA has broken below the 10-Month MA.  That’s been a relatively reliable signal in recent years.  Take sell cues from the daily and weekly charts.  Watch for a break of horizontal support on those charts.

Take sell cues from the daily and weekly charts.  Watch for a break of horizontal support on those charts.

INTERNALS – AUSTRALIAN MARKET.

This week the XJO was up +0.95%.  Looking at the internals, action was solidly bullish.  Most sectors were up.  Only three sectors were down,  Telecoms -5.15%, Utilities -1.04% and Info Tech. -0.42%.  Those are relatively small sectors.Only Telecomms +1.43% and Info.Tech. +0.87% had significant rises.  Materials +0.11% barely made it on to the positive side.  The big winner was XGD (Gold Miners) up +5.9%.  Gold Miners benefit from a flight to safety in Gold and Bonds when

Five sectors were up >2%:  Consumer Discretionary, Consumer Staples, Health, Property and Energy.  Materials was up +0.82% and Financials X-Property +0.47%.  Gold Mining was down -0.85%.

sctrs.png

The number of stocks positive on the Directional Movement Histogram rose from 33% to 58%.  Stocks above 200-DMA rose from 52% to 65% this week.  50% is the marker between bull and bear markets.

200 ma dmi.png

These moves this week suggest that the sideways trend in our market, at least in the large caps, has ended.

 

SECTOR CHARTS (Daily)

XMJ (Materials)

XMJ was up +0.82% This week.

xmj.png

It remains in an uptrend but the bearish rising wedge suggests there may not be a lot more upside in the Materials Sector.  We can expect one more upside move which would fulfil a “three push up” scenario.

The standout in this sector this week was Orora, the spin-off from Amcor.  ORA was up +3.36% after +8.36% the previous week after reporting good results particularly in the U.S.  ORA now has a Momentum Rating of +0.78.

ABC, AWC, BSL, FMG, NCM, NST and S32 have MOM Ratings of 0.4-0.6.  That’s not especially strong but all of those stocks are worth a look.

XEJ (Energy):

XEJ was up this week +2.28%

xej.png

XEJ remains in a sideways trading range.  It is once again knocking on dual overhead resistance.  It needs to break above that.

ORG is the strongest stock and had a big move this week +8.43%.

3. XXJ Financials X-Property:

xxj.png

XXJ had a modest move this week, +0.47%.  CBA, the largest stock in our market, was hit with another bombshell this week (the money laundering fiasco) and was down -1.75% this week.

IFL, a funds manager, is the strongest stock.  MOM Rating 1.03.  Also worth a look is BEN, with a MOM Rating of 0.98 and BOQ, MOM Rating 0.72.

The big banks continue to be hit by “black swans”.  Leave them alone until we can see some clear upside

XUJ Utilities

xuj.png

XUJ had a poor week -1.04%.  It is now below its 200-Day EMA, but sitting on a major horizontal support level.  So it has some hopes of bouncing here.  Until we see that happen, I’d leave this sector along.

XNJ Industrials

xnj.png

XNJ up this week +1.15%.  Friday’s candle looks bearish, but I wouldn’t be too worried unless the pivot low from the prior week is broken to the downside.

ALQ (MOM Rating 0.53) and Downer EDI (0.64)  are the strongest momentum stocks.  Neither is especially strong.

XSJ Consumer Staples

XSJ up strongly +2.6%.

xsj.png

That strong move was caused by big improvements in Treasury Wines +7.54% and Wesfarmers +3.43%.  Both reported this week and the reports were perceived favourably by the market.  TWE now looks likely to set an all-time high in the coming week and Wesfarmers seems destined to go to the top of its trading range around $45.  It is currently at $42.25.

I’ve been saying for weeks that WOW should be preferred to WES.  Now that has changed and there’s nothing between the two stocks.  Take your pick.

XHJ Health

xhj.png

Health up this week, +2.43%.  That was largely due to an outstanding move by Cochlear up this week +12.36%.  COH looks set top challenge its all time high.  CSL continues to have a lack lustre performance.

XPJ Property

xpj.png

XPJ up this week +2.29%.  Several property stocks reported this week with good results.

The best are Mirvac up almost 6% this week and Goodman up +3.9%.

The shopping centre stocks (VCX, SCG, WFL) continue to perform poorly.  Avoid.

XGD Gold Miners

xgd.png

XGD down this week -0.85%.  It lost the benefit of the tensions raised by North Korea.  A small rise in the US$ also played a part.

It is now above its 200-Day MA and hitting horizontal resistance.  That might give it pause.  But I wouldn’t be surprised to see the current momentum push the Index through resistance and go up another 100 points or so.

This is a volatile industry group with a lot of small cap companies.  Good traders can make money here, but it’s not for investors – unless they’re convinced we’re entering a secular bear market when Gold tends to outperform.

NCM and NST are the two strongest on a momentum basis, although neither is especially strong.

XDJ – Consumer Discretionary.

xdjj.png

I thought last week that Consumer Discretionary was a dead duck after it fell below its 200-Day MA and a poor Consumer Confidence report.  It proved to be Lazarus this week, up +2.91% and showed improvement every day of the week to finish well above its 200-Day EMA.

Flight Centre is the strongest momentum stock (MOM Rating 0.97) and up +3.24%.

XTJ Telecoms.

xtj.png

Telecomm was the worst performing sector this week, down 5.15%.  That was largely due to a poor performance by Telstra after it reported on Thursday, down -6.02%.

I was flummoxed by how poorly Telstra performed after its reports.  For months, analysts and their dogs have been barking that Telstra would cut its dividend, and the share price has been dropping as a result.  Telstra announced it would drop its dividend, and the share price dropped another -6.02%.  I think there was a lot of stealth buying going on while the share price dropped.  I think we’ll see a rebound in the TLS price, but it may not be enough to reverse the long term downtrend.  After a similar fall in April, TLS regained >11%.  I think we’ll see something similar this time – provided the general market conditions don’t deteriorate.

Summing Up:

The general sentiment as measured by the Internals improved this week, but not enough to take the XJO out of its sideways meander.  Currently the market is in a period where unpredictable events are determining day-to-day movements.  Trading reports, economic reports and geopolitical posturing are pushing our market around – with no change in general direction.

Reports this week results in some rockets and some fizzers.

ROCKETS (up more than +6%):  ABC +7.19%, BEN +9.5%, COH +12.36%, TWE +7.54%, ORG +8.43%, TAH +8.38%, TTS +7.99%

FIZZERS (down more than -6%): QBE -8.26%, DMP -12.54%, TLS -6.02%

So we had seven Rockets and three Fizzers.  That was a good week for our market in the third week of reporting season.  Mirvac (MGR) almost made it into the Rocket group, up +5.99%.

Those good results still weren’t sufficient to jolt the XJO out of its sideways trend, but it did finish up near the top of the range.

I remain cautiously bullish.

RB

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Saturday Morning Joe. 19 August, 2017.

August 19, 2017 Comments off

In U.S.

Major indices finished the day mostly flat, with the Dow Jones down moderately.  RSI is reading bearish (below 50) on all five indices.  A bearish cross of the 20/50 Day MAs on the Russell2000 has occurred.  A sell-off in the last hour sent indices into negative territory.

Screen Shot 2017-08-19 at 9.22.34 AM.png

DJ -0.++35%, Nasdaq -0.09%, SP500 -0.18%, NYA -0.11%, Russell2000 -0.08%.

Financials +0.04%.

In Europe, the Euro Top 100 Index was down -0.71%

SP500:

Screen Shot 2017-08-19 at 9.29.32 AM.png

The SPX finished down a little -0.18%.  Plenty of evidence in this chart says we’re probably at or close to a bottom.  The gap at 12 July has been filled.  The chart is at oblique support and opposite a congestion zone.  Thursdays wide-range day looked climactic.  RSI9 and CCI are oversold.  Some indicators have set up possible positive divergences. Look for a solid up day on Monday or Tuesday for an end to this pull-back.

Commodities:

DBC +1.78%. Energy +0.51%  Industrial Metals +1.64%. Copper Producers ETF was up +0.16%. Gold -0.16%.

Overnight in the US, BHP down -2.04%, Rio up +0.72%, Westpac up +0.08%.

Here’s the biggest problem for the American market:

Screen Shot 2017-08-19 at 9.12.18 AM.png

The best performing sector over the past 30 Days has been Utilities up +5.03%.  Utilities in America acts as a bond proxy, i.e., a resort to safety when the market is shaky.  Two out of the three best performers are defensives (Health and Utilities).  Only a good performance by Technology +3.65% has saved the American market from a complete rout.  The American market needs to see a switch out of Utilities and back into Financials, without any deterioration in Tech, for this market to continue bullish.  If we see Tech start to fade away, the American market will be in big trouble.  And that will cause trouble for our market which now has some degree of correlation with America.

RB.

Categories: Uncategorized

Friday Morning Joe, 18 August, 2017.

August 18, 2017 Comments off

In U.S.

Major indices finished the day sharply lower.  RSI is reading bearish (below 50) on all five indices.  A bearish cross of the 20/50 Day MAs on the Russell2000 has occurred.

Screen Shot 2017-08-18 at 6.51.10 AM.png

DJ -1.24%, Nasdaq -1.94%, SP500 -1.54%, NYA -1.32%, Russell2000 -1.72%.

Financials –1.72%.

In Europe, the Euro Top 100 Index was down -0.61%

SP500:

Screen Shot 2017-08-18 at 7.31.58 AM.png

The SPX down sharply -1.54%.  It was OpEX day today, so plenty of put buyers are happy.

The gap up on 12 July has been closed.  Today’s wide-range day looks climactic.  Indicators have set up possible positive divergences.  Look for a narrow range day on Friday.  We then need to see a solid up day to call the end of this fall.

For people wanting a “cause” for today’s big fall – there’s plenty of options:  terror attack in Barcelona, Mike Pence returning to the U.S. early from overseas (must be some looming disaster?), weak economic reports (industrial production rose less than expected), political instability in Washington (POTUS closing business councils).  For the technicians, the gap from 13 July had to be closed.  For the cosmic catalyst watchers, we have a total eclipse of the sun coming in the U.S. on Monday.  There are probably plenty more that I haven’t identified.  Take your pick from the foregoing, or add all of the them together – and get gloomy.  🙂

Commodities:

DBC +0.28%. Energy +0.51%  Industrial Metals -2.27%. Copper Producers ETF was down -0.97%. Gold +0.51%.  Iron Ore +5.6%.

Overnight in the US, BHP down -1.72%, Rio down-2.03%, Westpac down -1.8%.

Our market will be well down today, but I’d expect a lot of heroes will be in there buying.   I doubt the fall will be enough to shake our market out of its current sideways range.

Company results from yesterday resulted in the following moves in their stocks:

  • TLS -10.62%
  • Tatts Group +2.29
  • QBE -7.07%
  • Wesfarmers +0.29
  • ASX +1.42%
  • Cochlear +7.17%

It’s a quiet day for company reports today with the only large cap reporting – Primary Health.

RB.

Categories: Uncategorized

Thursday Evening Thoughts. 17 August, 2017.

August 17, 2017 Comments off

XJO was down marginally today -0.1%.  Volume was heavy – skewed by exceptional trading in Telstra (-10.6%) and QBE (-7.1%).  Those are two heavy-weight stocks in the ASX.  So I don’t think I’ll put much emphasis on the heavy volume today.

Screen Shot 2017-08-17 at 9.13.41 PM.png

The XJO remains within the sideways trading range.

Breadth today was exceptionally good.  That’s hidden by the big falls in Telstra and QBE.  Cumulative Volume Index was strongly positive today.

Screen Shot 2017-08-17 at 9.16.25 PM.png

Today’s XJO was mildly negative, but VIX was also negative.  They normally trade inversely to each other.  That suggests that the market was also discounting the heavy trades in TLS and QBE which skewed the market.

The Relative Strength Index for VIX fell today into bearish territory (below 50).  That’s bullish for stocks:

Screen Shot 2017-08-17 at 9.18.44 PM.png

So, despite the negative result for the XJO today -0.1%, I’m looking at today as a positive day for the market.

RB.

Categories: Uncategorized