Vanilla XJO Thread, page-42

20 Leaders Weekly Wrap, week ended 10/1/25. Caution.

VLC20 Leaders ETF Daily Chart.

VLC was up modestly 0.58% this week.

Looking at the chart, we can see that VLC has had three major movements since the beginning of November.

1. November saw a strong up- trend.
2. That was followed in December (to 20 December) with a downtrend. Friday, 20 December saw a capitulation event with a big down move on heavy volume. (See the big, wide blue candle on 20 December.)
3. Since 20 December, XLC has been in a sideways consolidation.

Until we see a break-out of that consolidation, I think it's best to remain cautious about the direction of the Large Caps Index. There will, of course, be individual stocks which are moving against the current Index consolidation.

20 Leaders individual stock performances.

12 stocks were up this week.

Best performers for the week were: MQG +3.64%, GMG +2.44%, AMC +2.31%. ANZ +1.49%, Rio +1.34%.

This set of "best performers" is of particular interest, because, until recently, all were in steep down-trends but all have now reverted to up-trends.

This suggests that rotation is occurring within the Large Caps. So, although Large Caps are in a side-ways consolidation, there is rotation between stocks within the Index.

Charts for Best Five Performers.

MQG

In analysing charts, context is everything.

On the Daily Chart, MQG is in an up-trend (higher highs and higher lows).

Fair enough. But that up trend has only reversed the previous down-trend and taken the chart back up to a major consolidation zone and horizontal resistance.

The last two days of the chart have shown a classic short-term reversal pattern, a big impulse upside candle followed by a big impulse downside candle.

We can now expect either consolidation or a move to the downside.

Although MQG was this week's best performer, further upside seems doubtful.

Until horizontal resistance is decisively broken, I think it's best to remain cautious about MQG.

GMG

Trends in GMG are somewhat murkier than for MQG as it has been particularly choppy since the beginning of November.

Indicators or of use here to provide clarity.

We can see three trends. Up for most of November, but a turn-down before the end of November.

December shows a down-trend - longer than most of the other Large Caps.

January has seen a seek up-trend which has ended this week in a small diamond shaped consolidation.

Until upside horizontal resistance is broken, the most likely direction is more consolidation or a move to the downside.

AMC

AMC has been through several distinct phases since the beginning of November.

1. Consolidation around the 200-Day EMA.
2. Up-trend
3. Consolidation.
4. Down-trend breaking below the 200-Day EMA.
5. Small consolidation
6. Up-trend.

Again, context is everything. AMC has been in a big down-trend through December, with a small Consolidation in the first week of January, followed by a small up-trend.

That small up-trend has taken it up to the 200-Day EMA and close to horizontal resistance.

I'd conclude that the current up-trend is a counter-trend movement after December's big down-trend.

Until proven otherwise, I'd think that the next move for AMC is a resumption of the longer-term down-trend.

ANZ

ANZ has a consolidation for much of November, unlike many other stocks which were in an up-trend.

In late November, it started a down-trend which lasted until that key date of Friday, 20December. On that date it marked a capitulation with a big down, wide volume candle, which then reversed into an up-trend. (Notice the posiitve divergence on MACD Histogram before 20 December which signalled the possibility of a move to the upside.)

The past three days have seen a stalling at the 20-Day EMA and horizontal resistance.

Given the previous long down-trend, this recent up-trend is looking like a counter-trend rally.

Until we see 200-Day EMA and Horizontal resistance broken to the up-side, I'll consider the current move as a counter-trend move.

Rio.

From early to mid-November, Rio was in a down-trend. After a small consolidation it reverted to an up-trend to mid-December. From mid-December to early January, it saw another down-trend.

The past few days have seen a short-term up-trend, finishing at the 200-Day EMA.

I'm inclined to think that the gap up and strong finish on Friday indicates a probable break to the upside above 2000Day EMA. But if

Monday sees a bearish engulfing candle, that idea gets put on the back burner.

Wait to see what happens on Monday.

50-Week Relative Strength of Stocks

The five strongest stocks (relative strength) over the past 50 weeks have been: IAG, CBA, BXB, SUN and WBC. Four of those five are from the Financials Sector. BXB is from the Industrials Sector.

The chart of IAG is of particular interest.

Unlike the other stocks reviewed above, IAG has two distinct trends, up from early November to early December, then a long consolidation from early December to early January.

If IAG breaks above horizontal resistance, then we can expect to see much more upside. IAG is currently at $8.56. If a break to the upside should occur, then a rise of some 15% or more seems feasible.

Conclusion.

VLC is in a wide consolidation - until we see the Index break out of the consolidation - caution seems to be the best stance.

The above analysis of the five strongest stocks has been a sobering experience. All would appear to be in counter-trend rallies. I would be happy to be proven wrong about that. That would easily occur if a break above horizontal resistance and/or the 200-Day EMA occurs.

MQG has been the strongest stock this week, and is now close to a 52-Week high. The most likely move now is for MQG to consolidate or fall back. A break to a new 52-Week High would be very bullish.

The other four strongest stocks don't have the same profile as MQG - the idea that they are in counte-trend rallies has strong appeal.

The strongest relative strength stock over the past 50 Weeks (IAG) has the potential for another 15% upside if it breaks horizontal resistance from its current month long consolidation.

Take care.
RB