Tuesday Evening Thoughts. 27 June, 2017.

June 27, 2017 Comments off

XJO flat today -0.1%.  Today we saw the inverse of yesterday.  Today we were down early in trade, then recovered those losses.  After that, we had a slow drift through the day to finish flat.  Basically, the market doesn’t know what to do – so it’s hedging.  Going sideways.

Screen Shot 2017-06-27 at 5.40.02 PM.png

It could be argued that the XJO is now in an upsloping, bullish channel.  If that’s the case, (debatable), then we should be looking at a move up to the top of the channel.  (We can hope.)  Short-term, the XJO continues to drift sideways.

Looking at the sectors, we see an unusual arrangement:

Screen Shot 2017-06-27 at 5.47.29 PM.png

Financials and Materials were both up.  Everything else was down.  That’s unusual.  Together they are the biggest sectors in our market >60%.  If both are up, we usually see a degree of correlation across sectors.  Not today.  With only two sectors up, breadth was weak.  The standard interpretation is a bearish one.  But it’s difficult to make sense of the current situation.  Maybe this is more end-of-financial-year madness.

RB.

Categories: Uncategorized

Tuesday Morning Joe. 27 June, 2017.

June 27, 2017 Comments off

In America:

Screen Shot 2017-06-27 at 9.19.39 AM.png

Indices were up early then gave it all back to drift sideways the rest of the day.  Selling was heaviest in the Nasdaq.  DJ +0.07%, SP500 +0.03%, Nasdaq -0.29%,  NYA +0.22%, Russell2000 +0.13%.

XLF (Financials) up +0.54%

SP500:

Screen Shot 2017-06-27 at 9.27.20 AM.png

The Index remains capped by overhead resistance.  Money Flow is showing a possible double bottom, but until resistance is broken this remains indecisive.  Wait.

Australia remains uncorrelated with the broad American market.  The commodities pricing helps a little but the major American indices are not much assistance.

Commodities:

DBC +0.22%.  Energy +1.1%   Industrial Metals +0.25%.  Copper Producers ETF was flat +0.05%.  Gold +0.9%. Iron Ore unchanged%.

 

Today – your guess is as good as mine.  We finished flat yesterday after intra-day selling – so we might see more of that today,  up early, then a sell-off.

RB.

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Monday Evening Thoughts. 26 June, 2017.

June 26, 2017 Comments off

XJO finished flat +0.08%.

Screen Shot 2017-06-26 at 6.08.50 PM.png

I noted in yesterday’s Weekly Report that major market indices and some sectors had flattened out.  Short-term trend is sideways.  Nothing occurred today to change that.

The XJO was up early in the morning session, but soon gave all that back and the index trailed through sideways to the end of trading.

XXJ (Financials X-Property) was also flat +0.07%.

Screen Shot 2017-06-26 at 6.13.07 PM.png

XMJ (Materials) is on a short-term buy signal, but today’s intra-day selling doesn’t instil much confidence.

Screen Shot 2017-06-26 at 6.15.06 PM.png

The long-term trend is down – so I think that discounts the short-term buy signal.

XHJ (Health) is the strongest sector in our market.  The negative divergence on the CCI and today’s tombstone doji don’t provide any short-term confidence in the sector.  XHJ flat, -0.1%

Screen Shot 2017-06-26 at 6.18.04 PM.png

Wait until we see signs of a definite direction in our market.

We’re into the last week of the financial year when all sorts of games are being played.  Volume today was well up for a Monday – so those games are probably being played already.  They didn’t result in anything dramatic today – but they might as the week progresses.

RB.

Categories: Uncategorized

Sunday Smorgasbord. Weekly Report, Week ending 23 June, 2017.

June 25, 2017 Comments off

Executive Take-away. 

Our market is indecisive.  Watch for a break either up or down.

CONTENTS

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

XJO Charts, Daily, Weekly, Monthly

XJO Daily:

xjo dly.png

The short-term trend is indecisive.  The chart has come down to the 200-Day MA and bounced off that for the second time.  Indicators are indecisive hovering in their mid-ranges.  Short-term support and resistance levels are clear:  5629.8 and 5836.4.  XJO is currently at 5715.9.  Watch for a break one way or another.

XJO Weekly:

xjo wky.png

XJO finished down this week, -1.01%.  The long-term trend is up, but the Index is at the lower edge of the bullish Standard Error Channel – which corresponds, more or less, with the lower Bollinger Band and the 49-Week MA.  That suggests we could move up from here.  A decisive break below the 49-Week MA would suggest more downside.

XJO Monthly:

xjo mty.png

So far in June, the XJO is flat -0.15%.  We have one more week to go.

The big challenge for the XJO is, in round numbers, 6000.  XJO needs to get over that to maintain this bull market.

Indicators so far in June have turned bearish.

INTERNALS – AUSTRALIAN MARKET.

First, the Sector changes for this week:

sctr change.png

Three out of 11 sectors were up.  Health was the best performer +2.1%.  The internationally focussed stocks in health (COH, CSL, RMD) benefitted from a bullish move in the Bio-Tech Industry in America.  The worst performers were Materials -1.52% and Energy -0.37%

The worst performers were Property -4.07% and Energy -3.49%

The number of stocks in the ASX100 above the 200-Day MA fell marginally this week from 63% to 61%  That’s still in bullish territory, but the trend is down.

The number of stocks positive on the Directional Movement Histogram fell from 58% into bear territory, 44%.  This is a shorter term trend indicator and can move more rapidly, week to week, than the long-term indicator (stocks above the 200-Day MA).

Screen Shot 2017-06-25 at 12.32.06 PM.png

SECTOR WATCH

Sector Mom.png

The strongest sector is XHJ (Health) ahead of (XNJ) Industrials .  Strong stocks in those sectors are always worth a look.

Examine improving sectors ( blue bars above red bars, e.g., Materials, Cons.Disc, Telecoms, Property, Gold Miners.) for possible individual stock buys.     (This is a first-stage filtering process and not a recommendation.)

SECTOR CHARTS (Daily)

XMJ (Materials)

XMJ was down this week -1.52%, one of only two sectors down this week.

xmj.png

XMJ is in a sideways trading range.

Three out of four Indicators are on short-term buy signals.  Look for a rise to the top of the sideways range.

The Index is underperforming the XJO.  That’s not a strong endorsement for buying this sector.

It’s not all doom and gloom in the Materials Sector.   Boral continues to perform well.  Orica, a supplier of mining materials, is also doing well.  Stay away from the miners until we see signs of definite improvement.

XEJ (Energy):

xej.png

XEJ had a negative week, -3.49%.  It’s been in a steep downtrend for the past month.  RSI is now <30 so some sort of a bounce might be warranted.  CCI is showing a positive divergence providing further evidence for a possible bounce.  Just don’t expect too much.  Longer term investors should avoid.

3. XXJ Financials X-Property:

xxj.png

XXJ down this week -1.22%.  Bollinger Bands have flattened out.  XXJ is in a sideways trend.

The 49-Day MA is close to crossing below the 200-Day MA.  If that happens (highly likely) we’ll have the major MAs in bearish order;  200/49/13.  Not a good look.

CBA fell back below its 200-Day MA this week, and the other three banks remain below their 200-Day MAs.

The strongest stocks are both fund managers:  IFL and Magellan.

Forget the big banks until we see a definite improvement.

XUJ Utilities

xuj.png

XUJ is a consistent top performing sector, but flat this week +0.07%.  XUJ is back into a short-term uptrend after falling heavily the previous week.  Indicators are all back on short-term buy signals.

Bollinger Bands have flattened out, and the Index is right in the middle.  Wait.

The strongest stock is SKI.

XNJ Industrials

xnj.png

XNJ had a small rise this week, +0.34%.  XNJ is in a strong uptrend, but short-term it has flattened out.

Some of the strongest stocks in the ASX100 are in this sector.  Momentum ratings:  Qantas 1.932, Aristocrat Leisure (ALL) 1.49 are the top momentum stocks.  Buy these on any dips.

Qantas improves when the oil price is falling.  While pressure remains on the oil price, Qantas should continue to do well.

XSJ Consumer Staples

XSJ was down this week, -1.07%.

xsj.png

XSJ remains above its 200-Day MA.  This week saw the second test of the 200-Day MA.  A break below that would be bearish.

TWE is the strongest stock, but hardly a standout in the broad market.

WOW lost its definite edge over WES this week.  It still has a slight edge but there’s not a lot in it.  The market remains jittery about the prospect of Amazon entering Australia.  The big retailers are likely to be under pressure for some time.

XHJ Health

xhj.png

Health up this week, +2.1%.  It is in a solid long-term uptrend.  It is consistently one of the best-performing sectors.

COH is the strongest stock followed by RMD and CSL.

XPJ Property

xpj.png

XPJ had a big fall this week -4.07%.  That erased most of the gains made in the previous week.  The sector is now back to a major support level.  Look for a bounce off that in the coming week.  A decisive break below that level would be bearish.

Westfield continues to be the weakest stock.  Other retail centre stocks have also been weak.

Every Property Stock in the ASX100 is now bearish on the Daily Directional Movement Histogram.

Leave this sector alone until we see some improvement.

XGD Gold Miners

xgd.png

XGD down a little this week -0.27%.  It is in a  sideways trend.  Bollinger Bands have flattened out.  Indicators are mid-range.  This is waiting for something to happen.

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.

XDJ – Consumer Discretionary.

XDJ flat +0.00%.  It is one of the better-performing sectors and knocking on overhead resistance.

xdj.png

FLT remains the strongest stock, MOM rating >1.

XTJ Telecoms.

xtj.png

Telecomm down this week -0.52%.  The sector is in a shallow downtrend.  That suggests the next move will be up.  Watch.

Vocus had a shot in the arm three weeks ago and is the best performing stock in this sector.

Summing Up:

We have plenty of indecisive charts in our market this week.

We need to see a breakout from the current sideways trends.

The XJO remains above the divide between bull/bear markets, i.e., the 200-Day MA.

I remain cautiously bullish.

RB

Categories: Uncategorized

Saturday Morning Joe. 24 June, 2017.

June 24, 2017 Comments off

In America:

Screen Shot 2017-06-24 at 9.40.08 AM.png

DJ -0.01%, SP500 +0.16%, Nadaq +0.46%,  NYA +0.19%, Russell2000 +0.73%. Indices are all above the 20-Day MA.  That’s a positive.

SP500:

Screen Shot 2017-06-24 at 9.49.02 AM.png

The Index remains in a short-term sideways trend.  The long-term trend remains up.  A negative divergence has set up on the Money Flow Index, which could mean that the current uptrend will be limited.  Relative Strength, MFI, CCI and Stochastic are all on short-term sell signals.  13-Day EMA of the Force Index remains positive – sitting above the zero line.  Wait.

Australia remains uncorrelated with the broad American market (Correlation Coefficient 0.1 – insignificant).  The commodities pricing helps a little but the major American indices are not much assistance.

Commodities:

DBC +0.44%.  Energy +0.46%   Industrial Metals +0.44%.  Copper Producers ETF was up +1.28%.  Gold +0.43%. Iron Ore +1.1%.

Those commodity prices should help our mining and energy sectors on Monday.

In Australia yesterday:

Screen Shot 2017-06-24 at 10.02.08 AM.png

The Heiken-Ashi Chart for STW (an ETF for the XJO) shows a possible trend change.  (Yesterday, XJO was up +0.17%.)  We need to see a yellow candle to confirm.  A trend change is still not showing up on DZS, CCI or RSI.  A positive divergence is showing up on MFI.  A lot of big institutions put money in the STW as a way of  investing in the benchmark market indicator (XJO).  So the MFI suggests that they are betting on a trend reversal.

An in-depth analysis of the Australian market (XJO and Sectors) will be posted tomorrow.

RB.

Categories: Uncategorized

Friday Morning Joe. 23 June, 2017.

June 23, 2017 Comments off

In America:

Screen Shot 2017-06-23 at 9.06.11 AM.png

Falls in the last hour of trading eroded earlier gains.  DJ -0.06%, SP500 -0.05%, Nadaq +0.04%,  NYA +0.14%, Russell2000 +0.38%.

XLF (Financials) down -0.62%

SP500:

Screen Shot 2017-06-23 at 8.38.33 AM.png

Heiken-Ashi chart is indecisive, showing a possible trend change.  A negative divergence has set up on the Money Flow Index, which could mean that the current uptrend will be limited.  Relative Strength, MFI, CCI and Stochastic are all on short-term sell signals.  Wait.

Australia remains uncorrelated with the broad American market.  The commodities pricing helps a little but the major American indices are not much assistance.

Commodities:

DBC +0.15%.  Energy +0.83%   Industrial Metals +0.51%.  Copper Producers ETF was up +1.14%.  Gold +0.34%. Iron Ore +1.1%.

Rio and BHP are set up for rises in the near future.  With positive metals and energy prices overnight, they should do OK today.

So long as the bank stocks aren’t spooked by the new tax in South Australia, we should be up today.  That news was known yesterday and the banks still rose.

RB.

Categories: Uncategorized

Thursday Evening Thoughts. 22 June, 2017.

June 22, 2017 Comments off

XJO up today +0.77%.

Here’s a Heiken-Ashi Chart for STW, tracking stock for the XJO:

Screen Shot 2017-06-22 at 9.45.45 PM.png

Today’s action wasn’t enough to see the H-A chart turn bullish.  Wait.

We’ve had a lot of volatility lately.  Volatility is a mean-reverting indicator, so that will probably settle down.  Here’s the A.VIX chart:

Screen Shot 2017-06-22 at 9.51.06 PM.png

Volatility reached a peak on Wednesday and has now turned down.  That’s no guarantee it can’t go higher.  But Wednesday’s peak was the highest in the past five months, so any further increase is likely to be short-lived.

All of that suggests we’ll see further upside from here.  Maybe not tomorrow – but watch the trend.

RB.

 

Categories: Uncategorized