Australian Market: Weekly Sector Performance Chart for Alternative Investments.
Australian Market. XJO - Monthly Chart
Australian Market. XJO - Weekly Chart
Australian Market. XJO - Daily Chart
Australian Market: Best Sectors
Australian Market: Worst Sectors
Australian Market: Alternatives – IOO and IEM
America.
GOLD
Summary and Conclusion
GLOBAL PERFORMANCE – WEEKLY AND MONTHLY
This week I've added two more countries to the list: Canada and Russia. Both are major energy exporters like Australia, while other countries in the list are more dependent on energy imports.
Overall, it was a poor week, with only China on the positive side.
Australia (ASX200) -4.82%.
America (SP500) -0.69%.
Germany (DAX) -1.9%.
UK (FTSE) -2.57%
China (China88) +6.9%.
Japan (Nikkei 225) -0.5%.
Global Dow -1.12%.
Canada -0.88%
Russia -6.31%
Australia had an exceptionally poor week this week. It looks more like Russia, which is suffering from sanctions imposed by Western countries, than any other of the countries listed.
AUSTRALIAN MARKET:
WEEKLY and MONTHLY SECTOR CHANGES
Nothing survived the big sell-off in Australia this week. The best performing sectors were Health -2.9% and Telecoms -3.35%. The worst two performers were Financials -4.88% and Utilities -4.94%.
Six out of 10 S&P Sectors were down more than -4%.
AUSTRALIAN MARKET:
ALTERNATIVE INVESTMENTS – WEEKLY CHANGE
I use three iShares to measure the performance of Alternative Investments. These shares are tradable on the Australian Stock Exchange and gives investors the opportunity to diversify their portfolios into international shares and fixed income securities.
The Alternative Investments also had a poor week this week, but nothing of the magnitude seen in the broad market.
IAF (largely invested in Australian Government Bonds) was down, -1.36%.
IOO (invested in 100 large international companies) down -1.78%.
IEM (invested in a range of large capitalisation and mid-range capitalisation companies in Emerging Economies) was down -3.47%.
On average, the AIs lost -1.96%, compared to the XJO down close to -5%.
AUSTRALIAN MARKET:
MONTHLY CHART - XJO
Our market is down this month -4.82%. It's far too early to make any decisions on the basis of the first week in the month.
Some indicators are throwing out strong caution signs. MACD Histogram has broken below its zero line. Dynamic RSI and Stochastic are both in bear territory.
Major indicators which provide "sell" signals, are still not negative. 10/20 Monthly MAs still haven't crossed over negative. Currently, the 10MMA>20MMA. So that is still a bullish profile. Super Trend Line still hasn't flashed a sell signal - it needs to turn blue for that to happen. Directional Movement Histogram still hasn't given a X-0ver into negative territory. These indicators rarely give out signals, but keep very long term investors out of the worst secular bear markets and into the best secular bull markets.
Signals from these indicators tend to lag the market, which is a good thing - as they filter out the noise. But they can also test the patience of investors if they watch the market day-to-day. For example, they would have been out of the market for about five years (Feb, 2008 till Feb. 2013) if they used the Directional Movement Histogram. Most investors couldn't stand that sort of experience, but that indicator would have kept the investor out of the major bear market of the GFC, and the big correction in 2011.
At this stage, the chart is now well below the support of the August, 2014 highs.
If the 10-Month MA crosses below the 20-Month MA we could be looking at a major bear market. That doesn’t appear to be imminent any time soon.
AUSTRALIAN MARKET:
WEEKLY CHART - XJO
XJO down this week -4.82%.
The Super Trend Line gave a sell signal five weeks ago. This week the chart fell below the lower edge of the Donchian Channel indicating a bearish pull-back.
We might have to see a touch of the 100-Week MA and positive divergences on the Indicators before we get a positive market again.
AUSTRALIAN MARKET:
DAILY CHART - XJO
Friday's action suggests the possibility of a low. That's a spinning doji candle on Friday, but we need to see a big up day on Tuesday to confirm.
RSI is now very oversold, at 28.4. We have a possible positive divergence on the MACD Histogram, so it is possible to see some upside. But I wouldn't be hopeful of a sustained upside move until I see better indications from the Weekly Chart.
AUSTRALIAN MARKET:
BEST WEEKLY SECTORS: XTJ and XHJ
Neither of these charts is looking bullish. In each case the MAs are stacked in the following order from low to high: 10/50/100. In both charts the Super Trend Line has changed to Blue, indicating a bearish short term market.
AUSTRALIAN MARKET: WORST SECTORS, XFJ, XUJ.
Both these Sectors were the best performers last week. This is what tends to happen in bear markets, we get some good positive action, but the momentum just doesn't carry through. Recent good performers become the current worst performers. That's been a pattern for a few weeks now.
Utilities looks much more resilient than the Financials. Utilities is in a sideways trading range. It has now hit the 100-Day MA and turned in a doji candle on Friday. So the potential lies for a strong move up. We need to see a big up day on Tuesday.
Financials are very oversold. So .... that doesn't mean much in a bear market. It was also very oversold a couple of weeks ago. We got a small bounce, but it came to nothing.
Best to stand aside until we see some basing action and a better weekly chart.
AUSTRALIAN MARKET:
ALTERNATIVES – IOO & IEM
As mentioned previously, iShares provide Australian investors the opportunity to invest in overseas markets – and are a cost effective method of doing so as iShares are tradable on the Australian stock exchange.
IOO is looking the most positive of every chart I've shown so far this week. It had a short term sell signal from the STL early this week. It remains above the 50-Day MA which is above the 100-Day MA. A break below the mid-May low would create a big double top and suggest much lower prices to come. At this stage, this is in the "hold" category.
IEM had a poor week, down every day this week, for a total of -3.79%. On the daily chart it is oversold and down to dual support of the 100-Day MA and horizontal support. It needs to do more to justify entering the stock. But it could be worthwhile watching.
AMERICA - DJ30
The Dow Jones Industrial Average was down this week, -0.9%. It has broken below the STL (2,10). It remains within its sideways consolidation pattern.
Many pundits are saying that America is due for a major correction. That's easy to justify after a very strong up trend for some years.
Currently, this Index is in a gentle medium term up trend. It is now in a short term down trend. The medium term up trend is in a tight coil and is likely to produce a big move in the near future. Given the state of the current short term trend, that could mean that we're seeing the start of a big pull-back. If this doesn't bounce convincingly off the 100-Day MA (blue dashed line), we could be seeing that start of a mid-year correction - which would not be unusual. Watch.
GOLD (GLD)
Gold often has a seasonal rally starting in June, so I'll be watching to see signs of that happening. This chart shows no such signs yet, down this week -1.63% It is oversold, but we might have to see a tag of the nearby horizontal support before getting too excited.
SUMMARY & CONCLUSION
World Markets:
First, a weekly summary of major world stock markets: Australia XJO -4.82%. German DAX -1.9%. U.K. -2.57%. SP500 -0.69%, Japan -0.5%. China88 +6.9%. Emerging Markets ETF (US$) -2.46%. Global Dow (US$) -1.12%, Canada -0.88%, Russia -6.31%. DJ30 remains in a long sideways consolidation. It does have a slight upward bias. A big move will come - maybe soon. Emerging Markets has been in a sideways consolidation for nearly four years. Best action is to trade the swings.
Commodities and Currencies.
US$ down -0.63% but showed some strong buying on Friday. A positive US$ usually has a negative effect on Commodities, and vice versa. Copper Futures up +0.3%. Crude Oil -1.94%. GLD (ETF for US$ Gold) -1.63%. GLD is getting close to a major support level and is currently oversold. Watch.
While the US$ remains strong, that will have a negative effect on our Miners. That would be a big drag on our market. It would then be up to the Financials to pull our market higher. Our Financials were the worst performer this week. Probably next week will be better.
In the week before this, our Weekly XJO Chart showed a big positive bullish engulfing candle. It came to nothing. This is what tends to happen in bear markets. No follow through on momentum.
Until we see more positive signs, it's best to stand aside and wait. Very long term investors will continue to hold until we see more bearish action showing up in the very long term indicators.
(20min delay)