21/6/25. ASX Weekly WrapXJO down this week -0.49%. STW down...

21/6/25. ASX Weekly Wrap

XJO down this week -0.49%. STW down -0.52%.

STW took small steps to the downside all five days this week. The biggest move was on Friday when it was down -0.3%. Five days down is unusual, but the size of the moves was modest to say the least.

Of some concern is the steady increase in volume. So while price changes are modest the increasing volume tells us that something of a battle has been going on in the market between the bulls and the bears. A resolution must be coming in the near future.

Relative Strength, Market/Sectors.

Sectors out performing the XJO this week:

1. Energy 5.31%.
2. Technology +1.54%
3. Industrials +0.87%
4. Health +0.67%.
5. Communications +0.29%.
6. Property +0.17%
7. Finance -0.05%
8. Discretionary -0.27%.

Sectors under-performing the XJO (in order)

1. Staples -1.4
2. Utilities -2.18%
3. Materials -4.26%

I've also included Gold (an industry group) -7.54% and IAF (Bonds) -0.11%

Energy has benefitted by the Middle East turmoil which may affect the supply of oil to the market. I'm surprised that Gold Miners had such a poor week given the Middle East. Gold usually does well in times of distress because of its "safe haven" status. It doesn't seem to be working this week.

The Ratio of Bonds to Stocks has improved in favour of Bonds this week. That goes with the Middle East turmoil.

Cumulative NewHighs-NewLows.

Cumulative NH-NL chart is beginning to roll over and is close to crossing below the 5-Day MA. A cross below the 10-Day MA is taken as a medium term bearish signal. We're not there yet, but the Cum NH-NL needs watching. NH-NL actually turned negative on Friday for the first time since early April

Australian VIX

Australian VIX (Implied Volatility) has kicked up a little over the past two weeks in response to Middle East events. But has levelled out at its new slightly higher level. That's still not a sign of panic in the market.

U.S. Fear and Greed Index.

The F&G Index is made up of seven components. It attempts to measure the sentiment of investors.

It dropped a little this week from the low end of the Greed section to the high end of the Neutral section.

Again no sign of panic.

Conclusion.

The Australian market was reasonably resilient this week in the face of dire geo-political events in the Middle East. The ASX and the U.S. market are both holding up reasonably well, if a little weaker, this week. The ASX remains in a consolidation despite falling a little this week.

1. The market remains bullish .
2. NewHighs-NewLows Cumulative remains bullish.
3. Energy has spiked higher due to escalation of hostilities in the Middle East.
4. The trend in VIX has twitched a little higher but still no real concern.
5. Volume is trending higher - that might be a sign that all is not well within the market, but still hasn't turned into a rout.

I think that volume is indicating that the market is on the edge of a precipice - it could well turn back from the edge - or go higher.

The coming week could be a turning point. The Middle East remains problematic. Then we also have the Ukraine issue for which there is no end in sight.

The trend of the ASX remains up although momentum has slowed - it is time to think tactically about defensive measures.

Take care.