Australian Market: Weekly and Monthly Sector Performance Charts
Australian Market: Weekly Sector Performance Chart for Alternative Investments.
Australian Market. XJO - Monthly Chart
Australian Market. XJO - Weekly Chart
Australian Market. XJO - Daily Chart
Australian Market: Best Sectors
Australian Market: Worst Sectors
Australian Market: Alternatives – IOO and IEM
America.
Summary and Conclusion
GLOBAL PERFORMANCE – WEEKLY AND MONTHLY
Australia was the strongest performer this week in this comparitive grouping. It and Japan are the only two up on both the weekly and monthly figures.
Here are the weekly figures:
Australia (ASX200) +2.24%.
America (SP500) -0.88%.
Germany (DAX) -3.4%.
UK (FTSE) -0.67%
China (China88) -3.61%.
Japan (Nikkei 225) +0.34%.
Global Dow -1.53%.
Only two out of seven indices were up.
After strong performances last week, both the German and Chinese markets fell back very strongly this week.
Once again, the Australian market has an insignificant correlation to the U.S. market at 0.02 over the past 30 days, so there’s not much point in looking to the U.S. for direction.
AUSTRALIAN MARKET:
WEEKLY and MONTHLY SECTOR CHANGES
Australia had a strong week this week, led by the big banks, that can be seen in the strong performance of the Financial Sector, and indirectly in the comparative outperformance of the 50 Leaders over the Mid-Cap 50. The 50 Leaders is skewed heavily in favour of the big banks which are absent from the Mid-Cap 50,
The best performer was the Utilities Sector, up +4.59%. That sector is dominated by one large stock, AGL Energy, which was up 6.92% this week.
This week saw a turn-around in the Financial Sector, up +2.67% this week, but down on the month, -2.25%.
So the pull-back in the Financials might be over.
The other poor performer on a monthly basis is the Consumer Staples Sector, -2.21%. Although positive this week, it was the worst performing sector, +0.24%. The second worst performing sector was Telecoms, up +0.26%.
On six monthly basis, we've seen a change in leadership. Health and Telecoms had been the best long term performers. That role now has shifted to Utilities and Industrials. In the Utilities, I've already mentioned that AGL is the single biggest stock. In the Industrial Sector, TCL (Transurban) is the biggest stock but doesn't dominate the Sector. Some other large stocks in the sector worth considering are: BXB (Brambles), SYD (Sydney Airports), AZJ (Aurizon), CIM (the old Leighton's) and QAN (Qantas).
AUSTRALIAN MARKET:
ALTERNATIVE INVESTMENTS – WEEKLY CHANGE
I use three iShares to measure the performance of Alternative Investments. These shares are tradable on the Australian Stock Exchange and gives investors the opportunity to diversify their portfolios into international shares and fixed income securities.
The Alternative Investments on average were up +0.89%, a good performance but lagging the All Ords.
IAF (largely invested in Australian Government Bonds) was up, +0.72%.
IOO (invested in 100 large international companies) up +1.41%.
IEM (invested in a range of large capitalisation and mid-range capitalisation companies in Emerging Economies) was up +0.24%.
If these are included in a long term diversified portfolio, they would have provided a countervailing effect on the falls in the Australian stocks.
AUSTRALIAN MARKET:
MONTHLY CHART - XJO
Our market is down this month -0.22%. We've had a very strong week, in the last week of the month, which resulted in the Index have a modestly loss for the month. The buying that came in this week can be seen in the long lower tail on this month's candle.
Currently, the chart is > 10MMA, >20MMA, and the 10MMA>20MMA. So that is still a bullish profile.
If the 10-Month MA crosses below the 20-Month MA we could be looking at a major bear market. That doesn’t appear to be imminent any time soon.
AUSTRALIAN MARKET:
WEEKLY CHART - XJO
XJO up this week +1.99%.
The chart now looks bullish. This past week has seen a bullish engulfing candle and the previous week, although negative, showed some buying pressure. (See the long lower tail). Bullish Engulfing Candles on the Weekly Chart are usually a positive sign. The Index has also risen back above the old August, 2014 highs - another bullish signal. All Indicators, except the MACD Histogram, have turned up. Seasonally, June has a poor record in Australia, so the current bullish sentiment could be misplaced.
AUSTRALIAN MARKET:
DAILY CHART - XJO
I've marked a few bullish engulfing candles on this daily chart. They are usually reliable, at least in the short term. Friday's bullish engulfing came after another one just six days prior. The problem for the XJO now is the strong resistance just overhead. It is butting up against the 100-Day MA and running into the old consolidation zone.
The chart has risen above the Super Trend Line. I've shortened the parameters of this indicator from the default 3,10 to 2,10 which makes it more reactive. The STL is a complex trend line derived from the Average True Range and the Commodity Channel Indicator. Like all trend following systems it whipsaws in sideways markets, but is good at catching long term trends fairly early. The chart broke above the STL on Tuesday. Friday's bullish engulfing candle promises more upside.
Indicators are still not overbought, so that supports a prognosis of more upside, at least in the short term.
The other potential problem is the bearish rising wedge. These can break either way but the probabilities lie more to the downside than the upside.
So we have a variety of forces acting on the market - but the short term trend is up, so we'll stick with that - with caution.
AUSTRALIAN MARKET:
BEST WEEKLY SECTORS: XFJ and XUJ
XFJ had a good week this week, up +2.67%. The weekly candle (not shown) is a bullish engulfing. The daily chart moved a is above the STL (2.10) on Friday. The recent correction resulted in a loss of >11%. At least a counter-trend rally is now in place. Westpac looks the weakest of the big banks and is probably best avoided. QBE amongst the insurers has been particularly strong.
XUJ is currently looking strong, up this week +4.59% and has broken back above resistance. The catalyst for this big rise was a well received briefing given by AGL early in the week. It broke above the sTL (2.10) on Monday and then went on with the job. It is now mildly overbought so progress might slow down, but I see no great impediment (other than general market weakness) from further upside.
AUSTRALIAN MARKET: WORST SECTORS, XSJ, XTJ.
XSJ up this week, +0.26%. It's currently in a quagmire and is below both the 50MA and the 100MA. It is currently sitting on support of the STL but Friday's shooting star candle isn't optimistic. Best left alone.
XTJ was up this week +0.26%. Since late February, Telecom Sector has been in a sideways consolidation with a slight downward bias. Until we see more definite evidence of a break out from that consolidation, this is best left to the swing traders working on short term movements.
AUSTRALIAN MARKET:
ALTERNATIVES – IOO & IEM
As mentioned previously, iShares provide Australian investors the opportunity to invest in overseas markets – and are a cost effective method of doing so as iShares are tradable on the Australian stock exchange.
IOO had a big up week this week, +2.13%. IOO is positively affected by a rise in the U.S.$. This gives it a bias to move opposite to our Mining Sector in the medium term. It is, therefore, a valuable addition to a long term diversified portfolio.
IEM was up moderately this week, +0.57%. Like IOO, it is also affected by the direction of the U.S.$. It is in a short term up trend but needs to do more to prove its bullish credentials.
AMERICA - DJ30
The Dow Jones Industrial Average was down this week, -1.21%. It has broken below the STL (2,10). Indicators can fall further before becoming seriously oversold.
Many pundits are saying that America is due for a major correction. That's easy to justify after a very strong up trend for some years.
Currently, this Index is in a gentle medium term up trend. It is now in a short term down trend. The medium term up trend is in a tight coil and is likely to produce a big move in the near future. Given the state of the current short term trend, that could mean that we're seeing the start of a big pull-back. If this doesn't bounce convincingly off the 100-Day MA (blue dashed line) and the oblique up trend line, we could be seeing that start of a mid-year correction - which would not be unusual. Watch.
SUMMARY & CONCLUSION
World Markets:
First, a weekly summary of major world stock markets: Australia XJO +1.99%. German DAX -3.4%. U.K. -0.67%. SP500 -0.88%, Japan +1.47%. China88 -3.61%. Emerging Markets ETF (US$) -3.79%. Global Dow (US$) -1.53%.
Australia performed well this week with a strong performance from the banks.
Commodities and Currencies.
US$ up +0.71%. A positive US$ usually has a negative effect on Commodities. Copper Futures down -2.95%. Crude Oil + GLD (ETF for US$ Gold) -1.3%. Crude Oil +0.97%. Crude Oil was saved from a negative week by a very strong performance on Friday when it was up +4.54%,
While the US$ remains strong, that will have a negative effect on our Miners. That would be a big drag on our market. It would then be up to the Financials to pull our market higher. Given the action in the Financials this week, I'd expect another strong week coming up. That should see us positive next week. The biggest risk is from world-wide action, particularly with the Greek issue plaguing markets. The Americans are looking weak, and the big runs in China and Europe seem to be finishing. So we might not get much help there. Plenty to think about.
But - at this stage, the bullish engulfing candle on the XJO Weekly Chart suggests we'll be up next week. So we'll go with that.
(20min delay)