XJO Weekend Charting and Chat - 20th April 2018, page-4

Yesterday In Australia.

Australia was down modestly yesterday -0.21%. As expected, the XJO opened on the negative side but rose to be marginally positive just after the first hour of trading. Bulls then gave up the ghost resulting in a small drop in the XJO. Eight out of eleven sectors were weak. Telecoms the weakest -1.1%, Energy the strongest, +0.3%. The range in the XJO was tight resulting in an “inside day”:



XJO is now at a triple resistance: horizontal and the 50-Day and 200-Day MAs. The trend channel remains up, so bulls have some hope. A move to the downside on Monday should bring in more selling.

Among the four big banks, only CBA was on the weak side. Westpac was flat, ANZ +0.1% and NAB +0.4%. CBA has borne the brunt of revelations at the Royal Commission this week.

OVERNIGHT

Overnight, the American market was weak, Dow Jones -0.82%, SP500 -0.85%, Nasdaq -1.27%.

SP500 Chart:

Indicators have turned down. Trend Channel has turned down. Until they turn up it is wise to be cautious. The 20-Day MA looks a possible target. This pull-back is likely to be bought as the medium term trend remains up.

How will that translate in Australia Monday?

The poor finish in America will probably cause a weak opening in Australia.

We could see a surprise after that. XLF (Financials +0.04%) in America was again the only sector not in negative territory. That could put a floor under our Financial Sector which has been down the past eight days in a row after taking a flogging in the Royal Commission. XXJ down -0.14% yesterday after being well into positive territory in the morning session.

Resources in America were marginally stronger: Industrial Metals (DBB) +0.15% and Energy +0.13%; so that should help our Miners and Energy producers.

Overnight, the Australian Futures are down modestly. If we get a bounce in the first hour, we could even see a modest rise on Monday – barring any more damning revelations in the Royal Commission to damage our Banks and AMP.

Webcast’s of the hearings can be found at: http://webstreaming.lawinorder.com.au/fsrc