Weekend Charts and Chat. 1/2 August

Sat. a.m. 1/8/20. XJO plunges, Apple rockets higher.

In Australia yesterday, XJO down -2.04%.

XJO is now down to support of its 50-Day Moving Average. The last time it visited the 50 was back in early May. That was after a bullish x-over when the XJO was recovering from its February/March bear market.

A clear break below the 50 would be ominous.

I've marked the Head/n/Shoulders pattern and the previous bullish x-over of the 50-DMA with shaded ellipses. XJO needs to bounce here to avoid more down-side.Meanwhile, back at the ranch ...................

Overnight:

Apple rose strongly +10.47%

That set the foundation for rises in major indices in America:

Dow Jones +0.44%. SP500 +0.77%. Nasdaq +1.49%. Small Caps -0.7% (but showed plenty of intra-day buying). Banks -0.37%.

All that looks impressive, but let's put it into a bit of perspective. Apple makes up a 10% weighting in the Dow Jones. That means that it's ~10% rise last night added ~!% to the Dow Jones. Strip out that 1% and the Dow Jones starts to look a bit sick, actually negative.

A bit more perspective. Apple is up +45.41% this year. But .... 22 out of the 30 Dow components are negative for the year.

SP500:


Last night's candle was a rare occurrence - a "dragonfly doji". That occurs when the opening price and closing price is about the same. In between, there is selling and then recovery. Such a candle is often a sign of a bearish reversal in the index when it occurs at the top of a trend. It needs downside confirmation in the next trading session.

Commodities:

Commodities Index +0.54%. Base Metals -0.34%. Energy +0.05%. Gold continued on its merry way after Thursday's down session. Gold up +0.91%.

Gold may be signalling a problem in stocks. Gold, often a "safe-haven" in turbulent times, usually re-acts negatively to the stock market. But both stocks and Gold are strong, with Gold very strong.

"Nobody told me there'd be days like these / Strange days indeed / Most peculiar, mama" (John Lennon)

Sentiment:

A survey of the American Association of Individual Investors shows investors have turned even more bearish than they were a week ago. Since the recovery from March, the AAII investors have been bearish - and wrong. Contrarians usually take the opposite side from the herd. This sentiment reading suggests a bullish market coming up.

"Strange times indeed."

https://www.youtube.com/watch?v=cuuhsqA95iA