XJO Weekend Charting and Chat. 17/18 October.

Sat. a.m. 17/10/20. Mixed results in American stocks.

Yesterday in Australia:

XJO down -0.54%.

XJO is oscillating around a major horizontal resistance level which has stymied upside potential for most of this week.

The chart remains bullish. Stay with the trend until we see definite signs of a bearish retreat.

American "Best Six Months of the Year" buy signal has been triggered.

MACD is above its zero line on the 16 October - that's the trigger for the "best six months of the year buy signal.

That doesn't mean that it triggers for the Australian market. Towards the end of the year, the Oz market tends to lag the American market by a month or so:

November tends to be a weak month in Australia on an historical basis. Wait for an MACD buy signal in mid-to-late November best-six-months buy signal.

Here are results for November-May and May-November:


There is no guarantee, of course, that any particular year will follow the script. This year, for example, saw a fall of about -16% for the November-May period as a result of the crash in February-March. Don't blindly follow this recipe - continue to watch the charts and exit if things turn turkey.

Overnight:

Dow Jones +0.39%. SP500 flat +0.01%. Nasdaq -0.36%. Small Caps -0.63%. Banks flat -0.03%.

Intra-day selling was evident across the board which knocked the top off early rises.

SP500:

This chart remains mostly bullish. The only weakness is the DZ Stochastic which has crossed below its top band. That's often a short-term sell signal for swing traders.

The chart is still above its Trigger Line (8-Day EMA). If the chart drops below that, it would confirm the short-term sell signal from the DZ Stochastic for swing traders.

Commodities:

Commodities Index -0.67%. Base Metals flat -0.06%. Energy -0.82%. Gold -0.35%.

Overnight Oz Futures +0.27% point to a modest positive start on Monday.

AAII Sentiment:

AAII Sentiment is the most bullish it's been (relatively) since late February - just before the big crash.

That doesn't mean we'll see a crash, but Independent Investors are becoming a little more bullish than they were. The chart, however, still remains below the zero line.

Since the big crash early this year, anytime the Independent Investors become a little bullish (relatively) the market has tended to pull-back.

This is a contrarian indicator and should not be used by itself.