Vanilla XJO Thread, page-18

Weekly Wrap, Week ended 27/12/24

A short week this week, only two and a half days trading, because of the Xmas break.

XJO up this week, +2.41% reversing most of the previous week's big fall.

XJO has bounced off a major horizontal support level.

The previous week's fall was the worst since mid-April earlier this year. That also started the traditional Santa rally for 2024.

XJO Daily Chart.

Last Friday, XJO reached the RSI oversold level below 30 and responded back up to the upside this week.

Dynamic Zone Stochastic also showed a positive divergence which played out with the upside move this week.

Hanging just above the finish on Friday is a strong horizontal resistance zone. We need to see that break to the upside for this nascent rally to have legs.

Sector Performance this week.

All sectors were up this week, with three sectors up more than +3%. Financials +3.36%, Discretionary +3.34%, Property +3.23%.

Materials was the relatively worst performer this week, up just +1% - not too shabby. Staples was the next worst (relatively) +1.22%. Most weeks, investors would take those results with wide grins.

New Highs and New Lows.

This chart shows New Highs and New Lows with 10-Day Moving Averages for each category. New Highs MA concurrent with New Lows MA. That is a concerning development. When New Lows consistently exceed New Highs, the market is undergoing considerable stress.

This year we've seen a case back in August when the X-Over offered a bearish scenario - but the market quickly recovered.

That may be the case now. A rally now in the XJO would be a bullish event and probably avoid a negative X-Over of New Highs and New Lows. We need to see the current rally continue to the upside.

SP500 Daily

On Friday, SP500 failed at the confluence of horizontal and oblique resistance. That's sometimes referred to as "The Kiss of Death". It fell back to hit the 50-Day EMA - which now becomes support.

SP500 is between a rock and a hard place. Which way it moves now could be crucial. A move down to. break recent horizontal support would create a head/and/shoulders top - which could be a death knell for the market.

Conclusion.

The Australian market recovered after the previous week's big fall.

The Australian market is at a crucial level with New Highs possibly falling below New Lows. A definite fall would indicate the end of this strong year-long bull market.

SP500 is also looking to be in a critical stage, hanging between important resistance and support.

The next week seems to be critical for the continuation of the current long bull market.

Take care.