The daily XJO chart has been in a positive uptrend since early April. It had a solid week this week, up +0.68% against a backdrop of coruscating evidence about Financials at the Royal Commission. That remains a major negative for our market.
XJO is now at major resistance levels (horizontal, plus the 50-Day MA and 200-Day MA).
This is a critical time for the XJO. Expect a pull-back. What happens after that pull-back is important. A break above those major resistance levels would be bullish.
XJO Weekly:
The weekly chart is out of sync with the daily chart. It appears to be at the beginning of a sustainable uptrend. That confirms the idea that the pull-back in the XJO Daily chart will be bought – and probably break above major resistance levels.
INTERNALS – AUSTRALIAN MARKET.
Measures of internal strength confirm the critical state of our market. Percent of ASX100 Stocks above their 200-Day MA stands at 49%. This market is in the balance.
Nine out of 11 Sectors were up this week. The only weaknesses occurring in Telecoms (XTJ) and Financials(XXJ). XXJ makes up more than a third of the XJO, so that’s a major drag on our market.
Nine out of 11 Sectors were up. The only weaknesses occurring in Telecoms (XTJ) and Financials(XXJ).
XXJ makes up more than a third of the XJO, so that’s a major drag on our market.
The longer term picture is much weaker:
Only Health (XHJ) is showing major strength. Materials (XMJ) and Energy (XEJ) seem, however to be on the rebound and were the best performers this week.
Those three sectors are the sectors to focus on in the near future.
XMJ has been up ten of the past eleven days. It was down on Friday. That suggests we’ll see a bit more downside before the next move.
XEJ has been in a strong uptrend since mid-March. It is now overbought and probably needs a rest before moving higher.
CONCLUSION:
The Australian market has had a good run recently particularly in Resources. It looks ready for a rest. A break above major resistance levels would be bullish. The Weekly Chart suggests that is a possibility, but the Daily Chart says, not yet. Wait.
(20min delay)