Weekend Chat 31/01 - Many Were Played, page-13

Sat. a.m. 31/10/20. American Election Jitters, Rising Covid Cases, Millions Protesting. What could go wrong? DUH!

Yesterday in Australia.

STW (tracking ETF for the XJO) fell below the Cloud and the 200-Day MA. That's now in bearish territory.

Indicators are all on sell signals.

RSI(2), which is used as a contrarian indicator, is below 5. Contrarians take that as a possible "buy" signal.

Wait.

ASX 10 Leaders, 5-Day Performance

The only positive this week was Woolworths - a classic defensive stock. Banks, which had been bullish, are now falling heavily. The worst performers are BHP and Macquarie.

Overnight:


Dow Jones -0.59%. SP500 -1.21%. Nasdaq -2.45%. Small Caps -1.36%. Banks +1.23%.

Banks diverging from the main indices? WTH?

SP500:

SP500 is on the cusp of a Double Top break-down. The demarcation line is the horizontal support level from late-September.

Indicators are on sell signals.

CCI and RSI(2) show tight positive divergences.

Wait.

Commodities:


Commodities Index flat +0.00%. Base Metals +0.06%. Energy -0.68%. Gold +0.46%.

AAII Bull/Bear Chart:

Last week, AAII went bullish for the first time since March. This week, the SPX had its worst week since March. AAII are great contrarian predictors. On recent history, they remain too bullish.

(Don't use contrarian indicators without other supporting evidence.)