Vanilla XJO Thread, page-50

ASX Weekly Wrap, week ended 17/1/25

XJO Weekly Chart

XJO up this week, +0.2%. The long lwer wick on this week's candle shows demand coming into the Index

XJO has been in a long-term up-trend since early April. Imposed on this chart is a Standard Error Channel (SEC) which shows clearly the up-trend. Whenever, the chart breaks downwards to the lower edge of the SEC, it has tended to head back up to the top of the Channel. There seems no reason to think that this time will be any different.

XJO Daily Chart

Monday showed weakness to the downside, with XJO falling -1.23%. The index has reversed that big loss to be up +0.2% for the week.

Friday saw the Index stall at horizontal resistance, but the up-trend from 23 December remains intact. There seems no reason to suspect that horizontal resistance will be overcome and XJO will head higher.

Horizontal resistance, at a big round number of 8500, seems to be a target for the next move to the upside.

Sector Changes this week.

Six sectors were up this week and five down. As well, Gold Miners (XGD), which is a sum-index of Materials (XMJ), was up strongly, +4.99%. That followed on from a strong week in the previous week, +3.95%. That's getting a bit stretched to the upside, so we might see some consolidation or a pull-back in XGD.

Resource sectors were the best performers this week, Energy (XEJ) +3.19%, and Materials (XMJ) +2.63%.

This week saw some rotation out of interest rate sensitive sectors into the resources. Information Technology (XIJ) -3.12%, Health (XKJ) -1.91%, Discretionary -1.17%

That can largely be attributed to the big fall on Monday triggered by interest rate jitters in the U.S. after a good Jobs Report. (Good news is bad news.)

ASX RBA Rate Tracker.

The ASX web-site uses the "30 Day Interbank Cash Rate Target Implied Expectation of change" as an indicator of possible RBA Rate changes. It is currently showing a 73% possibility of a change to the RBA Cash Rate at its next meeting in February.

On Monday, that dropped from 78% to 73% which is hardly earth shattering in the context of possibilities. The Tracker has remained at 73% for the rest of the week. That is still a strong indication that the RBA is set to drop rates in February. It's interesting to note that CBA and
ANZ are saying much the same thing - a rate cut in February.

New Highs and New Lows.

This chart remains bullish with the 10-Day MA of New Highs remaining above the 10-Day MA of New Lows.

In the context of the past year, those two MAs remain relatively close together, so it wouldn't take much to throw this indicator into bearish territory.

This continues to be an indicator worth watching, as an shock to the global system would produce a bearish switch in this indicator.

Conclusion.

XJO was up this week a little this week, after a big fall in the early part of the week. Further upside seems probable. , +0.53%. It pulled back in the last two trading days of the week but remains in an up-trend.

New Highs and New Lows continue to support a long-term bullish stance, but it has weakened from the end of November.

While the trend remains bullish - stay with the trend.

Take care.