XJO was up +0.57% this week.
XJO was up eight days in a row until the negative day on Thursday. That's an unusually strong short-term rally, and it appears to be faltering with three narrow-range doji candlesticks in a row. That's occurring at a support-resistance line at 7226. XJO finished the week at 7219 - marginally below horizontal resistance.
That Horizontal Resistance Line also coincides with the 50% retracement of the fall from early Feb. to late March. Reversal of trends often occur at the 50% level.
DZ Stochastic has turned down but remains above its "sell" line. Schaff Trend Cycle also remains above its "sell" line. PPO is marginally above its zero line.
All that suggests that the coming week could be crucial to the future of the XJO.
XMJ (Materials) was the dog in the major this week. (Not quite an appropriate metaphor in the Easter Week).
Defensive Sectors were fairly strong this week: XHJ +3.83%, XSJ +1.78%, XUJ + 1.78%, XTJ +1.68%.
That suggests we've seen a rotation into defense against the usually strong XMJ. It should be kept in mind that XMJ was up +7.01% in the previous week. So it's not surprising that it had a fall this week.
All three columns sloping up - bullish trend. XDJ, XIJ, XTJ, XHJ, XSJ, XNJ, XGD, IAF.
All three columns sloping down - bearish trend. XMJ, XPJ
Down then up - counter trend bullish rally. XXJ, XEJ, XUJ.
Up then down - counter trend bearish rally. No sectors.
Some sectors were affected this week, XHJ moved into the bullish section. Materials moved from "bullish counter trend rally" to "bearish". Again - this emphasises the shift into defense from offence.
Gold Miners and Composite Bonds (IAF) are bullish - both of those tend to be safe havens.
XJO remains in a "counter trend rally"
NewHighs-NewLows.
This is a long-term indicator, but a good guide for long-term investors.
NH-NL Cumulative started falling on 9 Feb. This week it moved back above its 10-Day MA. That's a promising sign for long-term investors.
Stocks/Bonds Ratio.
The recent strong 8-Day bullish rally took the Stocks/Bonds Ratio into an upside movement.
Then, the past couple of days has seen it equivocate. It nudged above the zero line, then fell back below the zero line. The zero line is the demarcation between medium tern bullish and bearish.
Historical and Implied Volatility.
When Historical Volatility falls below Implied Volatility - the market is usually in a short-term bullish trend. (HV is based on historical data of the XJO. Implied Volatility is based on data from the VIX Index.)
When HV gets down to around the 5 level, a reversal in the XJO trend usually occurs. HV is not far off that level.
(This is often a leading or co-incident indicator.)
% of Stocks above key moving averages.
1. % of stocks above 10-Day Moving Average: Last Week 77%, This Week 77%.
2. % of stocks above 50-Day Moving Average, Last Week 40%, This Week 51%.
3. % of stocks above 200-Day Moving Average, Last Week 50%, This Week 60%.
Stocks above the 10-Day MA has stalled this week at 77%. Medium term and long term the market improved.
Conclusion.
XJO has had a strong counter-trend rally but appears to be stalling at Horizontal Resistance.
(20min delay)