AZL Chart, page-315

Day of consolidation - and uncertainity

Yes AZL gained 1 pip to finish on 9c. Our volume was decent but on lower side, just over 44m shares traded. The high 8s held to day as well. We need a good day to get to double digits.

ASX Li stocks just inched forward. Although some stocks eased, more stocks were in green than red. Roughly one third of stocks were in red, rest two thirds flat or small gain. Of the 54 stocks that I track, average increase was 1%.

Overnight US Li stocks were mixed. The ETF of LIT lost around 1%, some stocks made gains around 2, but there were a few which had a decent loss.%.

What next -

Yesterday US indices were fairly flat though 3 of the 4 indices finished in green. ASX again mirrored US indices and was very flat today.

So yesterday I had written - "Usually when there is no bad news and stocks consolidate and drop, it usually lasts 3 days (but this is probability, no guarantee). We have now lost for 3 days. Probability says we should stabilise and not drop further". Although individual stocks did make some gains and losses, across the sectors I could see the stabilisation/consolidation. The sectors I follow, average they did not drop. So somehow what I wrote yesterday stood its ground.

After slight gain in DOW yesterday, it has regained its 200 day moving average. SP 500 and Russell 2000 are within striking distance. Nasdaq a bit further down. Why do I talk about this 200 day moving average constantly? Lot of analysts/chartists consider crossing of this and holding a very bullish pattern. Many fund managers/investment house start buying if that happens. Hence if that happens, we can expect a good rally before further consolidation happens.
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Another thing I had written yesterday was - "There are 2 other negative factors in play. A few of US indices fell below their 200 day moving average - many fund managers are blind sellers if that happens. Also historically September is weak month for US indices, which is not far away.". Although there are negative factors, we also have to consider the probability of this happening. These same fund managers who blindly sell, did not pick up a big rise that has happened since June bottom. Their performance is looking poor. They made a mistake once, they can make it again. Everyone is comparing from what has happened previously - very few think that we may be setting a new pattern - its possible, though on an average history does help. Secondly, in most years September was weak month. But most analysts blindly following it are missing the point that when September was usually reached previously, most years stocks had made good gains in the previous 8 months. This year its different. First 6 months there was big loss. We have only partially recovered. So the configuration is not the same. There is a possibility that September may not be weak just for this reason. this is just my thought, I will check on weekend if other analysts are talking in the same manner.

Personally, after doing some buy and sells across some stocks, I am back to where I was, in the process saved some coins but on same holding. Honestly, things are very unpredictable and no one can say what will happen. There is 50-50 chance either up/down, but I am slightly in positive thinking as my two indicators SP 500 above 4200 and Volatility Index below 20 is still there. I had to take a chance in June end with big buys, I was lucky there. May need anther luck. Since its 50-50 I can very well understand if some people want to be on the sideline - individual risk/reward.

So what will happen tonight? US Futures are moderately in red, similar to yesterday at this time. Asian markets were mixed - half finished flat, other half lost between half to one percent. Volatility index VIX dropped slightly yesterday and is currently at 19.56 - below 20. My biggest concern at this stage? Cryptos. They are panicking. Although I don't trade Cryptos but I believe many there play for a volatile market and try to pre-empt where the market is heading - unless we can say they are decoupled from stock market. Yesterday at this time when I wrote, Bitcoin was trying to hold 23.5k. Now it is trying to hold 22.5k, so a decent loss in 1 day. Announcement - key data of Personal Income and Expenditure but after market opens. So how do this look? I would be happy for US indices to be sideways for now, consolidating for next leg, so even a small red is fine. Last 6 trading days, only 1 red, but except for 1 day, gains were small other days. We need another decent green to give boost. Will that happen? Lets hope so. Enjoy your weekend and all the best.