7/11 Indices, page-161

13/11/22. Sunday Report - The Week That Was. Week Ended 11/11/22,

XJO Monthly Chart.

The down-trend in the Monthly Chart may have been reversed.

The Hull MA13 has turned up. Remember that this was the first indicator to turn bearish back in October 2021. If it can remain up at the end of the month, we will have had one significant change on the indicators.

This week, the chart has finished above the 8-Month Exponential Moving Average and above one of the Supertrend Lines. Another bullish sign.

If these gains can hold until the end of the month, we are entering a new bullish trend.

XJO Weekly Chart.

XJO had an exceptional week this week with the index up +3.58%. That's the third week in a row that it's been up, and momentum is increasing not decreasing.

Hull MA13 and both Supertrend Lines are bullish. The index has formed a double bottom

The Index has closed above the 50-Week MA which is a bullish signal.

XJO Daily Chart.

XJO has finished decisively above the 200-Day MA. That's bullish.

RSI is at 67.08 - close to the overbought level of 70. It might get over that given solid results in the U.S. on Friday.

Look to buy pull-backs.

SP500 Weekly Chart

SP500 had a great week, up +5.9%. It remains below its 50-Day MA and lags the XJO in that regard. That's mainly because of the poor results in big tech stocks which have taken a caning in recent months.

Both Supertrend Lines are now bullish and Hull MA13 has turned up. Those are bullish events.

SP500 was up +0.92% on Friday after its big rise on Thursday of +5.54%.

SP500 weekly is in an uptrend - Higher High and Higher Low. Stay with the trend.

ASX Sector Results for this week.

It was a good week for the XJO with ten out of eleven sectors up. The only negative sector was Energy (XEJ -2.24%). It has been one of the leading sectors in recent times so a pull-back is to be expected.

Financials (XXJ +0.92%) was a relative damp squib compared to some of the other sectors. XXJ has been a leading sector, so we're probably seeing rotation out of that sector into some of the stronger ones.

Four sectors rose >5%. (Materials, Health, Utilities, Property). The big rise in Utilities was due to take-over activity in that sector.

Relative Strength of Sectors.

RSI (Relative Strength Index) is calculated using the default setting of 14 days - almost three weeks of trading. It provides a more reliable guide to changes in sectors than the one-week results which can jerk around quite a lot and, thus, RSI is probably a better guide to recent strength in the sectors. (Click here for a description of RSI.)

All eleven sectors are above the 50 level - that represents a bullish result.

The strength in Utilities comes up clearly again in this graph.

Gold Miners (XGD) is above RSI/70 so it is well overbought. We might see a pull-back in the leaders in the XGD leaders group, e.g., NCM and NST.

NewHighs-NewLows Cumulative.

This is a lagging indicator but bullish signals are usually highly reliable.

This is a metric for the long-term investor. While NH-NL Cumulative remains below its 10-Day Moving Average, it is best for long term investors to remain cautious and defensive regarding the market.

The gap between the NH-NL Cum and the 10-Day MA has narrowed down so a new bull signal may not be far off.

% of Stocks above key moving averages.

1. % of stocks above 10-Day Moving Average: Last Week 59%, This Week 83%.

2. % of stocks above 50-Day Moving Average, Last Week 58%, This Week 83%.

3. % of stocks above 200-Day Moving Average, Last Week 35%, This Week 44%.

The two shorter term measures (Nos. 1 & 2) are now >80%. That's an overbought signal. Expect some weakness in the market in coming days.

Stocks >200Day MA have improved above the crucial 40% level. That suggests that any pull-back will be bought.

% of stocks above the 200-Day MA rose again this week. Steady improvement can be seen in the bar chart and the 5-Week MA is rising.

Conclusion.

The ASX is now looking bullish. We can expect more upside early next week, but the ASX market in the short term, is now at or close to being overbought - depending on how you measure it. Expect a pull-back in the near future - and that will probably be a chance to buy into this market.

Stay Safe