Indices 2/10, page-293

Late news: War in Israel looks like a Black Swan event.

September was crook. XJO down -3.5% for the month. The first week of October hasn't improved matters. XJO down this week -1.34%

What about October? October gets a bad rap for big, big declines. Anybody who lived through it cannot forget 19 October, 1987 when the Dow Jones dropped 22.6%, in one day. But - that's the exception to the rule, XJO is usually up about +1% in October but that usually occurs later in the month.

September is behind us. We can look forward to better times.

XJO Weekly Chart.

This week XJO was faced with a test of the crucial horizontal support level at about 6900. It fell below that level and bounced back above it. So far so good.

XJO Daily Chart.

Thursday and Friday resulted in a bounce back above the crucial 6900 horizontal support.

The Index remains below all important moving averages: 200 SMA, 50 SMA, 10 DEMA and Suypertrend (10/1).

The Index is close to breaking above 8 DEMA, Supertrend and horizontal resistance at about 7000. A break to the upside of those would be bullish.

Positive divergence on MACD Histogram suggests the next major move will be to the upside.

Sector Performances this week.

No sectors were up this week. GDX (Gold Miners), an industry subsection of Materials (XMJ). was up marginally +0.14%.

Energy (XEJ) took a hit this week - 6.6%. But XEJ was a better performer in recent weeks so a turn down was not unexpected.

Again this week, Defensives did realtively well. Health -0.57%%, Staples -0.34%.

Financials (XXJ) continues to ourperform the market, although still falling -0.45.

100 Leader Stocks above their 200-Day, 50-Day and 10-Day Moving Averages.

• Above their 200-DMA: last week 36%, this week 36%.
• Above their 50-DMA: last week 27%, this week 15%
• Above their 10-DMA: last week 30%, this week 32%.

The Stocks above 50DMA are at 15% - the last time we saw figures below 20% was back in September, 2022. Notice that is September - the worst performing month of the year.

September 2022 was down -7.34%. That compares to this year's September of -3.5%.

October 2022 was up +6.01%. What will October 2023 bring us. +2.9%? We can wish.

SP500 - American Market.

Here's the SP500 Chart:

Friday night (Oz Time) saw a remarkable session on the SP500. The candle is a "bullish engulfing candle", which, when it occurs at the end of a trend, is a strong "buy" signal.

Friday's action took the Index back above Supertrend (10/1) and 8Day EMA. Another "buy" signal.

Strong Stocks v Weak Stocks 100 Leaders.

This week saw a new record in this metric (an invention of yours truly).

This week there were no Strong Stocks in the ASX 100 Leaders. - the first time this has occurred since I started records back in February, 2021. I classify all stocks according to a variety of timing indsicators and give each stock a rating of 0-14. Stocks with a rating of 14 are classed as "Strong Stocks". Stocks with a rating of 0 are classed as "Weak Stocks".

Conclusion.

September was, predictably, poor - worse than usual - but not as bad as September 2022. Small mercies..

We're coming into October, usually a better month than September. There are plenty of signs to suggest that the worst may now be past and we could be looking at some upside from here.

I think Financials (XXJ) are likely to lead the way higher.

War in Israel looks like a Black Swan event. Not even the Israelis saw it coming. That might rock the boat for a few days.

Good Luck