07/08 Indices, page-142

STW Daily Chart. (STW is a tracking ETF for the XJO)

(The above chart is a Candle/Volume chart. The volume is indicated by the width of the candle. This allows a viewer to see the relative volumes entering the market. The volume is also mirrored in the MACD Histogram. The height of a Candle/Volume is the same as a normal candle.)

This week, STW formed a bear flat - and that was on low volume. That's a near perfect recipe for a move to the down side.

The standard measure rule is to take the distane from recent high to the start of the bear flag and project that to the downside from the top of the flag. That takes the measure rule down to a major support level at 64.62. STW finished at 66.19 on Friday.

That level of 64.62 is also a retracement of 61.8% of the rally from 10 July to 1 August.

So there's a lot suggesting that we will see a further fall from the current level to 64.62.

Sector Performances this week.

XJO was up a little this week, +0.2%. Performances in sectors were fairly evenly divided with five sectors up and six sectors down.

The best performing sector was Discretionary +1.96%. That suggests that the stock market is looking to a positive end to inflation which has so far impacted Discretionary. The next best was Telecommunication Servicd +1.06%. That's also pointing to the end of high inflation as XTJ contains stocks like REA (Real Estate Adverting) and SEK (Jobs Advertising).

Energy was third on the list of positives, up +0.76%. That tends to move with global movements in Energy prices.

Worst performer was Information Technology (XIJ), down -1.62%. It is often volatile and impacted by falls in the U.S. Nasdaq Index. Nasdaq was down exactly the same as XIJ -1.62% for the week. Amazing coincidence.

Wisetech (WTC) is the largest stock in the XIJ. It was down -1.45% on Friday on very heavy volume. Here's a candle volume chart for Wisetech:

That huge volume on Friday probably means the death knell for the recent strong run-up in WTC and will impact the ongoing movements in XIJ. (I mentioned last week that the out-look for XIJ was poor.)

Conclusion.

That's all from me this week. I'm not feeling confident about the near future of our market.

Not much happened to the broad market index this week, but some trends are beginning to show.

Our stock market seems to be indicating that we can see an end to inflation jitters for some of the domestic stocks.

Global shifts in markets may not be so kind to our market - especially Information Technology.

I'm looking to a break-down from the bear flag on the STW Chart (i.e., XJO).