Weekly Wrap, week ended 13/3/20This is a bearish market. This is...

Weekly Wrap, week ended 13/3/20

This is a bearish market. This is a market for traders. Investors - sit out.

Strategy - sell rallies.

XJO down this week -10.9%.

XJO is now well below the 200-Day SMA which counts as a line between bull and bear markets.

Friday was a massive positive reversal day, with the XJO finishing up +4.42%. Some people are calling this the bottom of the pull-back. I think that is unlikely. Bear market rallies can be spectacular, but usually fail. How far up will this one go? Don't know. But an educated guess would put it back up to the small congestion zone on the chart about the 6400 level. XJO is currently at 5539. That would also coincide, more or less, to where the 20-Day MA will be later in the coming week. But we need to be aware, and play this as we see it - not what we think will happen.

Cumulative New Highs Minus New Lows for the Australian Market continues to deteriorate:

This chart changes slowly. But when it changes - it should not be ignored. It is currently bearish. Conservative investors should wait until a positive 3/10 MA x-0ver occurs.

Rate of Change, Bonds/Stocks. (Bonds in this graph are represented by IAF, a composite bond ETF, and stocks are represented by STW, a tracking ETF for XJO.)

ROC is staggering so we should see at least a short-term rebound in stocks.

Next, a graph of stocks above key MAs, 200, 50 and 10:

The % of ASX100 stocks above the 200-DMA is now down to 11%. It usually doesn't get much worse than this without some sort of counter-trend rally.

While I'm on about stocks showing some positive qualities, here's a list of stocks that are above both their 200-DMA and 50-DMA:

CSL, A2M, COL, TPM. All are defensives.

Only one sector XHJ (Health) remains positive on the Cumulative Momentum Index:

Next best is Consumer Staples (XSJ) which contains two of the stocks in the above list (A2M and COL).

Here's the CMI Chart for Large Cap stocks with low volatility:

The only positive stock is CSL. That qualifies it as a pick for this week. It is disqualified, however, because it remains short-term bearish with the 5-DMA below the 20-DMA. So there are no stock picks for this week.

Only one ETF qualifies on the basis of both criteria - Gold (POG in Ozzie Dollars). Last week we had two picks: Physical Gold in Oz Dollars (ETF) was down this week -2%. IAF was down -2.45%. That's not a good result from Gold and Bonds, but still a lot better than the XJO -10.9%.

I have one speculative buy for this week: XRO. It's bounced strongly off the 200-Day MA and is positive on Hull MA13. This is for trading not investing.

That's it for this week. I'm optimistic about a short-term bounce, but expect it to be a counter-trend rally.