Thursday Morning Joe. 28 July, 2016.

July 28, 2016 Comments off

In America:

Screen Shot 2016-07-28 at 10.21.44 AM.png

Dow Jones -0.1%, SP500 -0.12%, Nasdaq +0.58%, NY Composite -0.31%, Russell2000 +0.17%.  Mixed  results last night, but still nothing drastic.  Nasdaq was the benefit of good rises in a couple of big tech stocks. Stochastic RSI has broken below mid-lines on three out of five indices.  This is developing more and more like a bear case.

But, NYSE NewHigh/NewLow Ratio remains bullish at  96.2%.   New Lows registered just nine.

SP500:

Screen Shot 2016-07-28 at 10.29.29 AM.png

Indicators are turning down.  CCI and MFI have both closed below the middle line of their Bollinger Bands.  Such a negative x-over could be a catalyst for downside action in the Index.  Wait. We still need to see a confirming big down day.

Commodities:

Screen Shot 2016-07-28 at 10.33.06 AM.png

DBC, the Commodities Index tracking ETF, was down last night -0.98%.  Commodities Index has a marked effect on the Australian market, particularly showing up in Materials and Energy.  Iron Ore, however, rose +1% which should have a positive effect on our big iron ore miners and Gold rose +1.61%.

DBC is now oversold, so some relief could be in store in that sector of the market.

Bonds Ratio:

Screen Shot 2016-07-28 at 10.35.51 AM.png

Bonds Ratio is a good guide to Risk-On/Risk-Off.  It is currently in neutral.  A fall below the 50-Day MA would suggest a Risk-Off Market.  Wait.

Consolidations like these try one’s patience. This can still go either way.  Wait.

RB.

Categories: Uncategorized

Wednesday Evening Liqueurs. 27 July, 2016.

July 27, 2016 Comments off

XJO barely moved from yesterday’s final quote, up +0.04%.  That, of course, hides the intra-day action.  The Index was up early but faded off as the day progressed.  Today’s candle is a bearish “pin”.  If, indeed, it is bearish it has to show downside action tomorrow.

Screen Shot 2016-07-27 at 7.41.15 PM.png

Today’s action comes at horizontal resistance and an overbought reading on the RSI.  That increases its reliability.  But, we still have to see downside action in the next day or two.

RB.

Categories: Uncategorized

Wednesday Morning Joe. 27 July, 2016.

July 27, 2016 Comments off

In America:

Screen Shot 2016-07-27 at 12.35.45 PM.png

Dow Jones -0.1%, SP500 +0.03%, Nasdaq +0.24%, NY Composite +0.19%, Russell2000 +0.58%.  Mixed  results last night, but still nothing drastic.  A cross below the mid-line on the Stochastic RSI would suggest a change to a down trend.  DJ is the closest to such an event.

NYSE NewHigh/NewLow Ratio remains bullish at  97.3%.   New Lows registered just six.

SP500:

Screen Shot 2016-07-27 at 12.47.15 PM.png

The above chart is a Heiken-Ashi Chart for the SPX.  The spinning candles suggest a possible change in trend.  It needs to be confirmed by a blue candle with a flat top.  Indicators are turning down.  CCI and MFI have both closed below the middle line of their Bollinger Bands.  Such a negative x-over could be a catalyst for downside action in the Index.  Wait. We still need to see a confirming blue candle.

Commodities:

Screen Shot 2016-07-27 at 12.49.17 PM.png

DBC, the Commodities Index tracking ETF, was down last night -0.42%.  Gold was down last night -0.7%.  Commodities Index has a marked effect on the Australian market, particularly showing up in Materials and Energy.  Iron Ore, however, rose +2.9% which should have a positive effect on our big iron ore miners.

DBC is now oversold, so some relief could be in store in that sector of the market.

Bonds Ratio:

Screen Shot 2016-07-27 at 12.51.02 PM.png

Bonds Ratio is a good guide to Risk-On/Risk-Off.  It is currently in neutral.  A fall below the 50-Day MA would suggest a Risk-Off Market.  Wait.

Consolidations like these try one’s patience, but, in these cases, patience is a virtue.

RB.

Categories: Uncategorized

Tuesday Evening Liqueurs. 26 July, 2016.

July 26, 2016 Comments off

XJO up today +0.07%.  The index was in negative territory most of the day but a late surge  after 3.00 p.m. got the bulls into positive territory.

Here’s a Heiken-Ashi Chart for the XJO:

Screen Shot 2016-07-26 at 9.30.53 PM.png

There is still no sign on this chart that a reversal is likely to occur.  The chart is at resistance, but we need to see at least a spinning candle on the H-A Chart to suggest we can expect a reversal.

Indicators, however, are stretched to the upside, or, in fact, starting to descent.  (See the CCI).

It’s difficult to see that there is much more in this up-trend.  I certainly wouldn’t be buying into this at this stage.  Wait for a better buying opportunity after the index falls.

RB.

 

 

Categories: Uncategorized

Tuesday Morning Joe, 26 July, 2016.

July 26, 2016 Comments off

In America:

Screen Shot 2016-07-26 at 7.44.33 AM.png

Dow Jones -0.42%, SP500 -0.3%, Nasdaq -0.05%, NY Composite -0.49%, Russell2000 -0.26%.  Negative results last night, but still nothing drastic.  A cross below the mid-line on the Stochastic RSI would suggest a change to a down trend.  DJ is the closest to such an event.

NYSE NewHigh/NewLow Ratio remains bullish at  96.6%.   New Lows registered just nine.

SP500:

Screen Shot 2016-07-26 at 8.13.53 AM.png

The above chart is a Heiken-Ashi Chart for the SPX.  The spinning candles suggest a possible change in trend.  It needs to be confirmed by a blue candle with a flat top.  Indicators are turning down.  CCI and MFI are both close to falling below the middle line of their Bollinger Bands.  A negative x-over could be a catalyst for downside action in the Index.  Wait.

Commodities:

Screen Shot 2016-07-26 at 8.18.36 AM.png

DBC, the Commodities Index tracking ETF, was down last night -1.1%, mainly under the influence of weak oil prices.  Gold was down last night -0.7%.  Commodities Index has a marked effect on the Australian market, particularly showing up in Materials.

DBC is now oversold and at support, so some relief could be in store in that sector of the market.

Bonds Ratio:

Screen Shot 2016-07-26 at 8.23.55 AM.png

Bonds Ratio is a good guide to Risk-On/Risk-Off.  It is currently in neutral.  A fall below the 50-Day MA would suggest a Risk-Off Market.  Wait.

RB.

Categories: Uncategorized

Monday Evening Liqueurs. 25 July, 2016.

July 25, 2016 Comments off

XJO up today 0.64%, on typical Monday volume – down a bit on the average.

Screen Shot 2016-07-25 at 10.20.07 PM.png

RSI.14 is up above 70 which is overbought.  That doesn’t mean this rally is over, but if you think you can enter now and make big short term gains – the odds are against you.

Here’s a Heiken-Ashi Chart for the STW (tracking ETF for the XJO).

Screen Shot 2016-07-25 at 10.35.56 PM.png

This chart is clearly getting stretched to the upside, but there is nothing obvious in this chart to suggest an imminent trend reversal.

The STW Chart has the advantage of being able to show the influence of volume which is difficult to obtain for the XJO.  The MFI (Money Flow Index) is high but not into the unsustainable level.

Until we see clear signs on this chart that a trend reversal has occurred, we’ll have to assume that the trend is up (if a little tired).

RB

 

Categories: Uncategorized

Sunday Smorgasbord. Weekly Report, week ending 22 July, 2016.

July 24, 2016 Comments off

CONTENT

  1. Australian Market:  Weekly Performance Charts
  2. Australian Market. XJO – Monthly, Weekly, Daily Charts.
  3. ASX 100 – Stock Ratings
  4. Australia, Risk-On or Risk-Off?
  5. Summing up.

AUSTRALIAN MARKET:  SECTOR PERFORMANCES IN THE PAST WEEK.

Screen Shot 2016-07-24 at 1.48.41 PM.png

XAO up +1.17%.

Nine out of ten Sectors were up.  The one failure was Materials, down heavily +3.49%.

The best two sectors were both Defensives:  Health +4.37% and Utilities +3.45%.  We might be seeing some stock rotation here out of Cyclicals into Defensives.  Too early to say.  It is note-worthy, however, that Small Ordinaries was relatively weak +0.29%.  Small Ords has been the strongest of the key market Indices, outperforming the Fifty Leaders and the Mid Caps.  Once again this suggests some rotation out of risky assets into “safer”  assets.

This week 32 Stocks from the ASX100 made New 52-Week Highs.  Only one Stock made a New 52-Week Low.  That’s a ratio of 97%.  Exceptionally bullish.

84.8% of ASX100 Stocks are above their 200-Day Moving Averages.  That’s an extremely bullish figure and into very overbought level.   As a contrarian, that rings loud alarm bells.

Screen Shot 2016-07-24 at 1.59.02 PM.png

90.2% of ASX100 stocks are positive on the short term trend measurement indicator, DPO.  That puts the reading into the extremely overbought region and is the highest reading since I began record keeping over two months ago.  A sharp fall followed that reading on 13 May.

Screen Shot 2016-07-24 at 1.54.54 PM.png

Screen Shot 2016-07-24 at 2.02.13 PM.png

On a one-year basis, the strongest sectors are Health, Consumer Discretionary and Utilities.  All three of those Sectors hit 52-Week Highs this week.  Industry Groups, Gold Miners and Property are also strong.  The worst performers are Telecomms, Energy and Financials.

Look for trading opportunities in the strongest sectors and avoid the weakest sectors.  (There are always exceptions.  See below for more details.)

XJO:  Monthly, Weekly, Daily Charts.

Monthly Chart:

Screen Shot 2016-07-24 at 2.06.13 PM.png

We now have one week left in this month.  Currently it looks promising.  The July Candle is above the 20-Month MA and the 3 Month MA is on the cusp of pushing above the 20-Month MA.  If the chart can hold that profile to the end of the month, it would be a bullish event.  Several Indicators are above their mid-lines.  Stochastic (14.3.5) has turned up and the very long term Stochastic (50.10.10) has also turned up.  Looks good.

Major horizontal support lies at 4987.  The Index closed on Friday at 5498.2

Weekly Chart:

Screen Shot 2016-07-24 at 2.10.18 PM.png

XJO up this week +1.26%.

The medium term uptrend is up.  This week the index hit horizontal resistance and had a mild sell-off at the end of the week.

Stochastic (14.3.5) is showing a potential negative divergence.  We need to see a down week to confirm.

Daily Chart:

Screen Shot 2016-07-24 at 2.14.05 PM.png

Short term Stochastic (14.3.5) is overbought at 90.2 on the Daily Chart.  The RSI hit above 70 this week – overbought.  With both of these in overbought regions, a pull-back is likely.

Any pull-back, however, is likely to be bought.

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 2016-07-24 at 2.17.49 PM.png

Utilities was up this week +3.45% and set a new 52-Week High.   It continues to be one of the better performing Sectors, if unspectacular, on a one year basis.  It tends to be a steadfast defensive sector.  The stand-out is AGL.  With a Relative Strength of 0.88, it is one of the best performing stocks in the ASX100.  On current prices, AGL pays a dividend of 3.2%.   All the ASX100 Utilities stocks set new 52-Week Highs this week.  An exceptionally good performance.  Dividends are:  APA 4.1%, AST 5%, DUE 6.6%, SKI 4.6%.

Industrials:

Screen Shot 2016-07-24 at 2.24.46 PM.png

The Industrials Sector is home to some of the better performing stocks on the ASX100.  Aristocrat Leisure is the standout and set a new 52-Week High this week. Relative Rating 1.18. Blackmores looks good but that’s due to a great performance early in the year. Blackmores is now below its 200-Day MA, so ignore it.

Aristocrat is the best performer.  It set another new 52-Week High this week.  Transurban, Seek, Sydney Airports and Brambles are all performing well.  TCL (Transurban) pays a solid dividend of 3.4%.  Sydney Airports also pays a solid dividend of 3.7%.

Materials:

Screen Shot 2016-07-24 at 2.29.11 PM.png

Materials was the only negative sector this week.

The two best performers are non-miners:  Bluescope Steel and James Hardie.  Both are building materials companies and riding the property boom.

The following stocks made 52-Week Highs this week:  Adelaide Brighton, Bluescope, FMG, JHX, Orora.   FMG is the only miner in that group.

On current pricing, ABC pays 4%, ORA pays 2.9%, Amcor 3.5%.  None of the top performing miners pays a good dividend.

Financials X-Property:

Screen Shot 2016-07-24 at 2.34.31 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.

CGF is the best performing stock and pays a dividend of 3.3%.  CGF is a fund manager.

ASX made a new 52-Week High and pays a dividend of 3.9%.  It’s an improver and worth a look.

The banks all pay healthy dividends, but until we see a turn around in their prices, the risk is a bit too high.

Health and Information Technology:

Screen Shot 2016-07-24 at 2.36.49 PM.png

Health remains the best performing Index and made a 52-Week High this week.  Cochlear is the standout and set a new 52-Week High this week.  Five stocks made new 52-Week Highs:  Cochlear, CSL,  Resmed, Ramsay Health and Sonic. also made a new 52-Week High this week.  Sonic (SHL) pays a dividend of 3.2%.

Carsales.com (CAR) is clearly a standout in Info.Tech.  Dividend Yield 2.9%.  CPU made a new 52-Week Low.  Avoid.

Consumer Staples:

Screen Shot 2016-07-24 at 2.41.14 PM.png

TWE is one of the best performers in the ASX100. It performed poorly June, but it might be returning to favour, but remains below the 20-Week MA.  It’s been a great growth stock and is once again worth a look.   WES is still the pick of the two big retailers, if you must have one in your portfolio.   Wesfarmers yield is 4.8%.  Woolworths is at the top of its long term down trend channel.   That suggests that it will once again see sellers getting stuck into it.  It could be turning out of its down trend, but more evidence is needed.Dividend is 5%.  Avoid until a new uptrend becomes clear.

Consumer Discretionary and Telecomms.

Screen Shot 2016-07-24 at 2.46.11 PM.png

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

Five stocks made 52-Week Highs:  Rea Group, Navitas, DMP, Fairfax and JB Hi-Fi.

DMP is the stand-out.   I’ve been nervous about the status of DMP, but it made a new 52-Week High off the back of financial troubles with Eagle Boys.  So it seems to be OK.

Navitas pays a dividend of 3.4%.  Fairfax pays 4.4%.  JBH pays 3.8%

Telecomms are interesting.  Telstra remains enticing to the dividend hunter:  dividend +5.3%.  It is now at the top of its trading range and may be due for a pull-back.  It remains a poor performer on a one-year basis.

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

Energy.

Screen Shot 2016-07-24 at 2.51.53 PM.png

On a one-year basis, Energy is a dreary sight.  It performed reasonably well early in 2016, but since then has been in a sideways trading range.  If it can break sharply upwards out of that trading range, some good buying can be expected.  Until that happens, I’d avoid the Energy sector.

Property

Screen Shot 2016-07-24 at 2.52.57 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.  Most of the stocks are performing well.  The only stocks not making 52-Week Highs this week were Westfield and LLC.  All stocks in the sector pay dividends better than 3% so are worth a look, with the exception of LLC which is performing poor.y.

A cost effective entry to the sector is provided by ETFs such as SLF.  Dividend Yield: 3.8%.  It went ex-dividend on 29 June.  Dividends are paid quarterly.

RISK-ON/RISK-OFF

Screen Shot 2016-07-24 at 2.59.01 PM.png

The above chart shows the Utilities Sector.  It’s relationship to the XJO (bottom panel) does a reasonable job of indicating Risk-On/Risk-Off. At the beginning of July, XUJ/XJO ratio fell strongly indicating Risk-On.  This week, however, XUJ has outperformed the XJO and we may be returning to a Risk-Off environment.  Look for a sell-off in the XJO to confirm.

TOP TEN STOCKS FOR JULY:

The Top Ten Stocks for June returned +0.026% while the XJO fell -2.7%

The Top Ten Stocks for July are:  TWE, AGL, Cochlear, MGR, DMP, VOC, JHX, BSL, ALL, TPM.

Summing up:

Short term the market is overbought and the XJO has hit resistance.  Some potential negative divergences are setting up.

Materials sold off this week, and some stock rotation from cyclicals into defensives appears to be occurring.

Breadth measures such as % of Stocks +ve on the DPO and % of stocks >200 Day MA are at very high levels.  They are higher than we saw in mid-May when a steep sell-off occurred.

Monitor the XJO closely this week.  A big down day would almost certainly indicate that a pull-back is occurring.  Such a pull-back should provide a good buying opportunity.

Already the press is beginning to paint Donald Trump as a bigger bogey man than ever before (See Fairfax Press today).  Such negativity might be the catalyst for a sell-off.

RB.

Categories: Uncategorized
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