Weekly Wrap. Week ended 15/11/24. XJO stagnates, weakness stems...

Weekly Wrap. Week ended 15/11/24. XJO stagnates, weakness stems from the influence of the Chinese economy

XJO down -0.12% for the week. There were wide variations between sectors. Technology led to the upside, +4.63%. Materials led to the downside, -5.56% (China trade).

XJO Daily Chart.

XJO went no-where this week, and is caught in a large symmetrical triangle. Given events in the U.S. on Friday, XJO will fall from near the top restraining line of the triangle back into the middle of the triangle.

That will also keep it within the short-term Bollinger Bands (10/1). That's the neutral zone.

We are now playing a waiting game to see which way this breaks.

Dow Jones

At the end of the previous week, DJ was close to the top of the SEC and at the rising oblique resistance line (not shown on this chart). That resistance played out this week with the Dow Jones recording a negative week. -1.24% as the relief rally from the Trump election faded.

DJ is now lying close to the 10-Day MA, the 20-Day EMA and strong Horizontal Support. That's powerful stuff. Expect a bounce, but we could see the Index revisit the lower edge of the SEC in the longer term.

Money Flow is weak and suggests a return to the bottom of the SEC is probable.

Sector Results for this week.

(In the above chart, GDX is a sub-index of XMJ, and IAF is a Composite Bond ETF)

Seven sectors were up this week and four down.

The four negative sectors were Materials -5.56%, XSJ -2.66%, XHJ -2.45%, Energy -2,14%.

The weakness in the China trade is seen in the poor results in Materials and Energy. Health is an interesting. Health has plenty of big stocks with earnings exposure to America, e.g., CSL, COH, RMD. Those are the big 3 in the Health space, and all fell in recent days, in concert with the fall in the U.S. market.

XSJ (Staples) is still being affected by the negative impact of ACCC investigations and bashing by the media because of the cost of living.

Gold has been falling as the U.S. Dollar rises. There tends to be an inverse relationship between the two. Dollar up, Gold down.

U.S. Dollar.

The rise in the U.S. Dollar could be coming to an end. It is now up to the Rising Restraining line and negative divergences show up on MACD Histogram and Money Flow Index.

U.S. Dollar staggered a little on Thursday and Friday. A fall in the U.S. Dollar would be bullish for Gold.

Copper

Copper, a ubiquitous metal in the industrial world, especially in EVs, has also fallen inversely to the rise in the U.S. Dollar.

The fall in copper may also be coming to an end. The chart has fallen to a major horizontal support and showed strond intra-day buying on Thursday.

Positive Divergence on Money Flow Index suggests that the big pull-back is gaining interest from investors.

Both BHP and Rio are big copper producers so they would benefit from any rise in the copper market.

Conclusion.

Australia is not the U.S., and this week we saw the XJO static while the U.S. market fell.

The XJO is in neutral, consolidating around the current levels. Watch for which way it breaks.

We could see movement to the upside in Gold and big miners if the U.S. Dollar falls

CBA is too far stretched to the upside - so watch for a reversion to the mean.

Hamlet: The readiness is all.


Take care.

RB