Thursday Morning Joe. 27 July, 2017.

July 27, 2017 Comments off

In U.S. 

Screen Shot 2017-07-27 at 9.26.17 AM.png

DJ +0.45%, SP500 +0.03% Nasdaq +0.16%,  NYA -0.01%, Russell2000 -0.56%.   Mixed results.  Dow Jones had a moderate rise.  R2K down moderately.  Others were flat.

Financials down -0.67%.

SP500:

Screen Shot 2017-07-27 at 9.43.35 AM.png

The long-term and short-term uptrends remain in place.  All four indicators are showing potential negative divergences.  The negative divergence is most clear on the CCI and it’s often a good guide. The potential for a pullback is increasing.

Commodities:

DBC +0.96%.  Energy +1.01%   Industrial Metals +0.036%.  Copper Producers ETF was +3.75%.  Gold +0.81%.

Rio down in NY -0.43%.  BHP in NY +1.37%

We’ve had a couple of strong days.  It looks like the Options guys yesterday afternoon had the right idea – play defensively.  I’d expect us to have a narrow range sideways day today.

RB.

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Wednesday Evening Thoughts. 26 July, 2017.

July 26, 2017 Comments off

XJO up +0.87%.  In the pre-market data, all the stars were aligned, and our market duly moved up strongly.

Screen Shot 2017-07-26 at 8.23.08 PM.png

We’ve broken above the symmetrical triangle in a decisive fashion.  The next hurdle looks like the major horizontal resistance level marked on the chart.

The Dynamic Zone Stochastic may be informative.  The bands have tightened, and the Indicator has closed marginally above the top band.  That’s a bullish move.  More upside can be expected.

I thought that today we could see some profit-taking in the afternoon session.  There was a little but not enough to consider it to be important.

Options Trading, dominated by institutions, was different.

Screen Shot 2017-07-26 at 8.28.25 PM.png

The last hour saw a considerable lift in implied volatility.  Clearly, some of the bigger traders were taking out insurance against a fall in the broad market.  They’re not always right, but worth noting.

RB.

Categories: Uncategorized

Wednesday Morning Joe. 26 July, 2017.

July 26, 2017 Comments off

 

In U.S. 

Screen Shot 2017-07-26 at 8.17.25 AM.png

DJ +0.47%, SP500 +0.29% Nasdaq +0.02%,  NYA +0.51%, Russell2000 +0.86%.   Dow Jones improved on the back of good rises in McDonalds and Caterpillar.  Nasdaq was held back by a fall in Alphabet, parent company of Google.

Financials +1.24%.

SP500:

Screen Shot 2017-07-26 at 8.52.07 AM.png

The long-term and short-term uptrends remain in place.  All four indicators are showing potential negative divergences.  (Note:  I’ve used a short-term RSI4 instead of the default RSI14).  The potential for a pullback is increasing.

Commodities:

DBC +1.1%.  Energy +2.25%   Industrial Metals +2.06%.  Copper Producers ETF was +4.43%.  Gold -0.33%.  Iron Ore +4.2%.

BHP and Rio up >4% in London.  Rio >4% in the U.S.  and BHP >3% in the U.S.

The above suggests our market will be very strong today.  Watch for some profit taking in the afternoon if our market pre-empts a weaker session coming up in the next U.S. session.

RB.

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Tuesday Evening Thoughts. 25 July 2017.

July 25, 2017 Comments off

XJO up +0.68%.  That positive result doesn’t change the structure of the Index which continues to slide sideways.

Screen Shot 2017-07-25 at 8.20.03 PM.png

This sideways slide has been going on for a relatively long time.  So, everybody (yes, including me) is watching to see how this breaks – and then pile in or pile out.

Which means – that the break will probably be a false break and trap a lot of players.

No harm in speculating – but perhaps should be kept in mind.

RB.

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Tuesday Morning Joe. 25 July, 2017.

July 25, 2017 Comments off

 

In U.S. 

Screen Shot 2017-07-25 at 9.10.10 AM.png

DJ -0.31%, SP500 -0.11% Nasdaq +0.36%,  NYA -0.17%, Russell2000 +0.15%.   Dow Jones fell modestly after Johnson and Johnson performed poorly.  Other indices are more or less flat.  The American market will be jerked around a bit as it is in the midst of reporting season, but so far markets haven’t received any trend busting news.

Banks Index +0.74%.

SP500:

Screen Shot 2017-07-25 at 9.19.55 AM.png

The long-term uptrend remains in place.  Today was another pause day in the short-term uptrend.

Commodities:

DBC +0.21%.  Energy +0.78%   Industrial Metals +0.55%.  Copper Producers ETF was +0.35%.  Gold +0.04%.  Iron Ore -0.3%

Commodities are generally supportive of a move up in our market today.  The U.S. Bank ETF was bullish.  Australian Dollar had a more or less neutral day.  So we should have a better day today.

RB.

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Monday Evening Thoughts. 24 July, 2017.

July 24, 2017 Comments off

XJO down -0.61%.  It could have been worse.  At one stage it was down more than -1%, but a bit of buying in the afternoon knocked the sharp edge of the downward slide.

Screen Shot 2017-07-24 at 8.24.41 PM.png

That’s evident in the long lower tail in today’s candle.

The Index went below horizontal support and then recovered enough ground to finish back inside the symmetrical triangle.

There’s an old saying on the market – don’t buy after two days up, don’t sell after two days down.

I have no idea about the validity of that statement.  If you look at this chart it seems to have some value. Maybe we can see a bit of buying tomorrow.

RB

 

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Curiousier and curiousier. Weekly Report, week ending 21 July 2017.

July 23, 2017 Comments off

Executive Takeaway. 

This week was a poor week on our market, and only a good performance from Financials saved it from a blood-bath.  Some of the banks look like improvers.  Otherwise there’s not much in the blue-chips to get excited about.

CONTENTS

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

XJO Charts, Daily, Weekly, Monthly

XJO Daily:

Screen Shot 2017-07-23 at 11.56.02 AM.png

Yes – this is a curious chart.  It’s been in a sideways, coiling motion since early June and the Average True Range expanded and has since plateaued at a high level.  Usually breakouts from such patterns start with a low Average True and then expand.

I have no explanation.  It probably has something to do with the uncertainty surrounding our big banks which are being pushed around by a series of political and regulatory announcements.  Because the big banks are such a large part of the Australian market, that’s having an unusual impact on the Average True Range.

We probably have to ignore the causes of this anomaly and concentrate on the chart pattern.  Watch for a breakout, one way or the other.

XJO Weekly:

xjo wkl.png

XJO finished down this week, -0.73%.  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.  Indicators suggest the medium term trend is on the cusp of a possible move to the upside.  A decisive break below the 49-Week MA would suggest more downside.  Wait

XJO Monthly:

xjo mnth.png

This is the third week of July, XJO flat +0.02%.    Momentum indicators are all flashing bearish signals (below their 5-Month MAs).  It’s still too early in the month to make any long term decisions based on just this week.

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

INTERNALS – AUSTRALIAN MARKET.

This week (XJO down -0.73%) would have been a slaughter-house but for the Financials (including Property).

SCTR chng.png

Nine out of 11 sectors were down.  XPJ (Property) was the best performer +0.88%.  XXJ (Financials Ex-Property) was next best +0.82%  The three negative sectors (XTJ,

Five sectors were down >2% with Telecomms (XTJ) taking the wooden spoon -4.1%.

For the second week in a row, defensive sectors are well on the negative side.  XDG (Gold Miners) was also weak – it tends to be a defensive.

It’s all very curious.

The number of stocks in the ASX100 above the 200-Day MA dropped from 60% to 56%.  That’s still in bullish territory, but the trend is down.

The number of stocks positive on the Directional Movement Histogram fell from 50% to 31%.   That’s the level last seen in early February, which marked the end of the January pullback.

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).

Until we see a reversal in this data, there’s no point in entering this market.  Listen to the trend.  This is again saying:  Wait.

200-D DM Hist.png

SECTOR CHARTS (Daily)

XMJ (Materials)

XMJ was down this week -2.73%.

xmj.png

XMJ is in a short-term downtrend within a longer term sideways trend.  Expect the Index to revisit the lower edge of the trading range.

Bluescope Steel (BSL) remains the best performer with a short-term momentum (MOM) rating to 0.94 but lost -3.59% this week.   Anything with a MOM Rating >1 is worth a look, but BSL is falling below that level this week, so it might be disregarded.

Nothing else is performing well enough to consider.

XEJ (Energy):

XEJ was down marginally this week -0.07%

xej.png

XEJ is well below its 200-Day MA and finding resistance at the 49-Day MA.  That’s far frp, encouraging.

Energy tends to be volatile.  I’d leave it alone until we see further developments.

3. XXJ Financials X-Property:

xxj.png

XXJ up this week -0.82%.  XXJ is in a gentle up sloping channel.  These have a tendency to continue.  They  play mind tricks with traders as very short term trends up and down occur within the shallow uptrend.

The Index has moved above the 200-Day MA.  Perhaps more importantly, the 13-DMA has crossed above the 49-DMA for the first time since the Bearish x-over marked on the chart.  So the long-term down trend in XXJ is probably over.

Four banks are now the strongest in the sector.  That’s the first time in yonks.  The four banks are ANZ, BOQ, Westpac and CBA.  This is a major change in the structure of this sector.  They’re all worth considering.

XUJ Utilities

Screen Shot 2017-07-23 at 2.19.27 PM.png

XUJ has been a consistent top performing sector, but is now in a downtrend, this week -1.64%.  Utility companies tend to be bond proxies.  With the possibility of interest rate rises occurring, the attractiveness of these stocks is lessened.

The 200-Day MA beckons.

No stock is performing well.  Wait and see how this goes.

XNJ Industrials

xnj.png

XNJ was flat for the second time in two weeks (-0.16%).  Like XUJ, XNJ was a good performer.  Its pull-back may be over.  The Index is back to a major horizontal support level.  Indicators are turning up enough to suggest that XNJ could bounce here.  Watch.

A couple of the strongest Momentum stocks in the ASX100 were in this sector but have now turned down (e.g., Qantas).  Cimic and Seek are two improving stocks that are worth watching.

XSJ Consumer Staples

XSJ had a poor week, -2.02%.

xsj.png

XSJ is in the middle of a trading range.  Traders can look to buy at the lower end of the range.

Indicators are giving short term bullish signals.

WOW has improved its edge over WES.   If you must have one of the two big retailers, WOW is preferred.

XHJ Health

xhj.png

Health down this week, -2.43%.  That’s the fourth week in a row where XHJ has suffered substantial falls.  It has consistently been one of the best-performing sectors, but investors might be rotating out of this sector.  The rising Ozzie Dollar negatively affects some stocks in this sector which earn substantially in overseas markets.  Technically, the chart doesn’t suggests that the fall might be over.  Until we see signs of improvement – Avoid, but don’t count it out.

XPJ Property

xpj.png

XPJ was the best performing sector this week +0.88%. This looks, however, like a counter-trend rally.

Only one stock (LLC) in the Property Sector remains positive on the Momentum scales. Forget about Property until we see some definite signs of a turn-around.

XGD Gold Miners

xgd.png

XGD down this week -2.05%.  It’s been in a downtrend since mid-June and now getting close to horizontal support.

We’re in a seasonally favourable time of the year for Gold.  So I’m looking for a solid up move in the Gold Miners.  Many factors can affect the POG.  Currently, with the Fed on a move to raise interest rates – that’s a negative for Gold.  So, be careful.

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 finished down for the week -1.78%.  It remains in a range.  It is getting back close to the lower edge of the range so traders might make money here.  Others can wait.

xdj.png

Flight Centre was one of the Stock Market’s darlings.  It fell this week after hitting a major horizontal resistance level and its run might be over.  Navitas is the other stock in this sector worth a look.

XTJ Telecoms.

xtj.png

Telecomm was the worst performing this week -4.15%  It has fallen out of its sideways trend which had lasted for about two months.

Forget about XTJ until we see solid improvement.

Summing Up:

There’s not much to get excited about in the Australian market, except, perhaps the resurgent banks in the Financial Sector.

The XJO remains in its frustrating sideways coil.  Until we see a break-out from that, one way or the other, it’s best for longterm investors to wait patiently.

I’m no longer cautiously bullish, but neutral.

RB

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