07/03 Week, page-273

XJO was down this week - it remains bearish.

XJO Monthly Chart.

XJO has been in a down-trend since September, 2021 as indicated by the Hull MA 13 (blue dashes)

In January, the monthly chart gave a long-term sell signal on both the Supertrend (1.5/7) and the 8-Month EMA. January was brutal for the XJO. A long standing adage of stock market pundits is: As goes January, so goes the year.

Now, after the second week of March, the March candle remains below the 8-Month EMA and below the Supertrend.

I'd like to see the Hull Moving Average turn positive (blue dashes change to yellow dashes) before taking buy action. For long-term investors - stay defensive.

Weekly Chart.

XJO was negative this week, -0.66%. It remains below the 8-Week EMA, the 50-Week MA and Supertrend (1.5,7). The Hull Moving Average remains negative (blue dashes).

Stay defensive.

Daily Chart.

XJO remains in a short-term trading range. Even if it breaks up out of that range that only moves into another trading range. Plenty of overhead resistance for the XJO to overcome.

It's not inconceivable for the XJO to take off in a big spurt higher - signs of a peace settlement in Ukraine would be helpful. Less aggressive action than expected by the Federal Reserve would also be helpful. A combination of those two events could see a strong up move helped by short-covering. (Maybe I'm smoking hopium.)

Sector changes this week.

Only two sectors were up this week, Financial (XXJ) +2.2% and Consumer Staples (XSJ) +0.28%.

The outsized gains from the previous week ended in Energy (XEJ -0.56%) and Materials (XMJ -3.44%). Materials was the worst performer this week

The War in Ukraine continues to do wonders for Gold, up this week >6%.

New Highs - New Lows Cumulative.

NH-NL Cumulative this week remains clearly below its 10-Day Moving Average. Until we see a decisive move back above the 10-Day MA, it is best to stay defensive. This is a good indicator for long-term investors.

Weakness in the NH-NL Cum is confirmed by my weekly Strong-Weak Stocks Cumulative chart. It remains below its 5-Week Moving Average.

S-W Cum tends to act a little earlier than NH-NL Cum, but NH-NL Cum has an advantage in being compiled on daily data rather than weekly data.

Advances-Declines Cumulative.

The dashed line in the above chart is the 20-Day Moving Average. It shows a distinct down-trend. Until this down-trend ends, stay defensive.

Bonds versus Stocks.

At the end of the week, Bonds had a slight advantage over Stocks, but there wasn't much in it.

Remember that this is a relativity chart. Both can be going down but one may be going down less than the other. In this case, Bonds were going down less than Stocks. Not a lot of joy in that for anybody.

Stocks above key moving averages - last week and this week.

A look at the number of stocks in the ASX100 above key moving averages provides an idea of how bad things are.

ASX100 stocks above the 10-Day MA: Last week 38%, this week 41%.
ASX100 stocks above the 50-Day MA: Last week 37%, this week 35%.
ASX100 stocks above the 200-Day MA: Last week 37%, this week 37%.

ASX100 stocks above 10-Day MA: Last week 38%. This week 41%.

ASX100 stocks above 50-Day MA: Last week 37%. This week 35%.

ASX100 stocks above the 200-Day MA: Last week 37%. This week 37%.

Until we see all of these above 50%, it's best to assume we are in bearish conditions.

Conclusion.

Measures of breadth all indicate bearish conditions. XJO remains in medium and long term down trends. Short term, XJO is consolidating.

While internal measures of breadth remain weak, stay defensive.

Good luck and good investing.