Indices: One-Week Performance. XJO - Monthly Chart (for the long-term investor) XJO - Weekly Chart XJO - Weekly Chart - very long term view. XJO - Daily Chart Small Ordinaries - Daily Chart Gold in Oz Dollars - Daily Chart Ozzie Dollars - Daily Chart Dow Industrials - Daily Chart EWA - Australian Shares - NYSE VIX Ratio Chart - American Commodities:Bonds Daily Copper Chart Seasonality - March Just for Fun - the RRRI Summary and Conclusion
INDICES ONE-WEEK PERFORMANCE XAO: -4.5% All ten S&P Sectors were down.
MONTHLY CHART - XJO (for the long term investor) XJO: above the 10-Month Moving Average. Positive. Broke below uptrend line. Negative. MACD: above its signal line. Positive MACD: Above Zero Line. Positive MACD Histogram. Negative divergence from price. Caution RSI: above 50 (just). Neutral. Crossed below its uptrend line. Caution Stochastic: Negative divergence from price. Caution In the very Long term the outlook remains bullish (above 10-Month MA). N.B. Market has been in a sideways consolidation since July 2009. Major Support and Resistance: 4200-5000
We are not yet half-way through the month. The technical picture may change dramatically by the end of the month.
WEEKLY CHART - XJO XJO: Below its a long-term up-trend line. Negative RSI.14: Below mid-line. Negative MACD Histogram: Below Zero line. Negative. MACD: Above Zero. Positive Stochastic: Heading down Negative. Chart is below 13-Week Moving Average: Negative Chart broke below the support of a bearish wedge. Negative.
In the medium term, this chart has turned bearish.
WEEKLY CHART - VERY LONG TERM If the chart breaks the very long term up trend that will probably mark the end of this bull market.
This chart looks oversold in the short term. Expect at least a short-term bounce.
DAILY CHART - SMALL ORDINARIES MACD below Zero line. Negative. RSI at 24.1. Oversold. Completed two equal measured moves down to important support lines. Stochastic: 4.8. Oversold.
This chart is very oversold. Expect at least a short-term bounce.
GOLD IN OZ DOLLARS Gold in Oz Dollars (tradable through the Gold ETF) tends to trend inversely to the general market. MACD: Above Signal Line. Positive MACD Histogram: Negative Divergence from Price RSI: At horizontal support line. Neutral. On Friday broke below the 13-Day MA. Negative Relative Strength: Gold:XJO still favours Oz Gold.
Medium Term trend could be breaking lower. Gold in Oz Dollars fell considerably in overnight trade on Friday night. The chart at left is for the Gold ETF - traded last on Friday afternoon.
OZZIE DOLLAR
Oz Dollar remains within a sideways consolidation since beginning of February 2011 13-Day Moving Average: Above. Positive MACD: Below signal line. Negative. RSI: Above mid-line. Positive. Stochastic. Below signal line but hooking up. Neutral. Resistance: 1.022 Support: 0.996 Bullish engulfing candle on Friday night. A strong Ozzie Dollar is needed to support further rises in the Australian Stock Market. This chart remains positive and relatively unaffected by MiddleEast/NorthAfrica turmoil.
DOW INDUSTRIALS
Long Term Trend is UP RSI.14: Below 50. Negative. MACD: Below signal line. Negative. Above Zero. Positive Remains within a narrow trading range: 12000-12250 Break from consolidation should determine direction.
Lowest pane shows comparison DJIA/XJO. Last few days the outperformance by the DJIA has been extreme. This may be due partly to Labor Government?s proposed Carbon Tax.
EWA - AUSTRALIAN SHARES - NYSE
EWA is an Exchange Traded Fund on the NYSE. It is basically an Index of Australian Shares priced in U.S. Dollars. Long Term Trend: Up. Short Term Trend: Down. RSI: At the 40 line and bounced.
The last four times that has happened the short term down trend has reverted to the upside.
Friday was a big ?bullish engulfing? candle bouncing off support. Positive.
A break below horizontal support (dashed line) would be very bearish. Needs to confirm with another up day taking the chart above the resistance of the April high (solid red horizontal line).
VIX
This chart shows an ETF that tracks the Vix Index (the Fear Index). The Vix is an index based on traders? expectations of volatility in the next 30days. High volatility equates to fear and a falling general market. A big bearish engulfing candle at resistance: Positive for the general market. Further movement UP - negative for the general market. Further movement DOWN - positive for the general market.
DAILY RATIO CHART U.S. COMMODITIES:BONDS
While Commodities outpace 30Yr Bonds, the American market should continue to be bullish. Big Fall this week. Support lies at the congestion area circled.
Chart remains above the 50-Day MA and the up-trend line. Bounce here would be positive.
DAILY COPPER FUTURES CHART
Copper this week completed a down move similar to the previous down move (see down arrows). Positive if bounce occurs. Two long-legged dojis in a row occurring at support suggest a possible trend reversal (upwards). MACD below signal line and Zero line. Negative RSI close to oversold. Stochastic: Oversold.
This chart may be forming a head/shoulders top. Technicals suggest a bounce here.
SEASONALITY - MARCH
Usually, the market reaches a peak in late March or early April. (Related to the 15 April tax deadline in America.) Since 1963, general market in March has been up 63% of the time with a gain of 0.6%. We?re in the Third Year of the Presidential Cycle. In the Third Year since 1963, the general market has been up in March 100% of the time with a gain of 4%. Since 1959, the SPX has been up 100% of the time in March. Since 1979, the Russell 2000 has been up 100% of the time in March.
Next week, according to Stock Trader?s Almanac, has a strong seasonal bias. Historically next week (the week before March option expiration week) is bullish. Over the past 22 years, this week has advanced on 17 occasions and declined just five with an average gain of 0.62% for DJIA.
So far March has not followed the usual seasonal bias. Let?s see if the coming week returns to historical norms.
Just for Fun - The RRRI (The Redback Report Readership Indicator)
Spikes in page views of my blog, "Redback?s Australian Market Report", tend to mark short term bottoms in the market. The previous spike was on the 24 February, 2011 (a short term low).
INFALLIBLE. :)
SUMMARY & CONCLUSION
TRENDS: - XJO: monthly chart - Still above the 10-Month MA. Positive. - XJO: weekly chart - down. Close to very long term uptrend line. - XJO: daily chart - down. Oversold. RSI below 30 - oversold. - Dow Industrials: medium-term - sideways - Dow Industrials: short-term - sideways. - Small Ordinaries: daily chart - down. Oversold. - Ozzie Dollar: Medium term. Sideways consolidation. No significant reaction to Middle East instability. - Gold in Oz Dollars: Medium-term trend - up. May be turning down. If so - positive for general market.
XJO currently at 4645. Major Support and Resistance for XJO: Resistance: 5000; Support 4200 . Mid-point 4600. Copper and Commodities in the short term have turned down. XJO Long-term Chart Pattern: Rising bearish wedge. Broken to the downside. Bearish. Any correction is likely to be muted because of Bernanke?s money supply (QE2) and the strength of the Presidential Cycle in the 3rd Year. QE2 effect seems to be fading. Next Week: Geo-political events (oil price) will continue to dominate sentiment. Oil Price currently falling below 100.
The Game Plan: - Seasonality favours further upside in March. - The long-term ?overbought? conditions which prevailed in February have been eased. - Short-term the market is oversold. - Market is at a cross-roads. Technicals favour a short-term bounce. Direction after that is uncertain. Big up-day on Monday - short term reversal upwards signal. If escalation of Middle East turmoil occurs, it will raise oil price and scuttle the longer term trend. Be flexible. Watch energy and steel/aluminium companies for possible positive price reactions to events in Japan (rebuilding and switching out of nuclear).
JAPAN I have a great affection for Japan, its culture and its people. I?ve travelled to many countries but the kindness and safety I felt in Japan have never been surpassed.
The Courier Mail (a paper I often criticise) has a remarkable report today. Television, for all its graphic abilities, cannot match the coverage provided in this report by the Courier. http://www.couriermail.com.au/news/magnitude-quake-strikes-japan/story-e6freon6-1226019903430 Donate to the Red Cross.
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