SP500 remains bearish on the Directional Movement Histogram.
Much of this chart is indecisive. It is oscillating around the 20/50 Day MAs. It is contained within the dark yellow One Standard Deviation Bollinger Bands. Friday could be the start of an up-side reversal, but we'll have to wait and see how this pans out.
The short-term trend channel has fallen. Respect the trend
XJO Charts, Daily, Weekly.
XJO Daily:
The daily XJO chart has turned bearish on the Directional Movement Histogram.
Like the American SP500, this chart is showing some indecision. It is mired in the middle of the dark yellow One Standard Deviation Bollinger Bands. This could go either way.
The short-term Trend Channel has turned down and indicators have turned down. Probabilities suggest a test of the 200-Day MA.
XJO Weekly:
The weekly chart is out of sync with the daily chart. That calls for some caution on the part of traders.
The Directional Movement Histogram is choppy - no clear direction. Wait.
INTERNALS – AUSTRALIAN MARKET.
Measures of internal strength were generally weaker this week, and returned to bearish conditions.
We have six out of eleven sectors above their 200-Day Moving Averages. The six sectors above their 200-Day MA are: Energy, Consumer Staples, Consumer Discretionary, Inf.Tech., Health, Materials. The 200-Day MA marks the long term trend.
The medium term trend is marked by the 50-Day MA. Eight out of eleven sectors are below the 50-Day MA. So the market is bearish in the medium term, but the long term trend remains bullish - just.
The number of stocks in the ASX100 positive on the Directional Movement Histogram fell from 60.6% to 35.4%. That's in the zone where the market turned around for most of 2017. Stocks above the 50-Day MA fell from 53.5% to 34.3%. Those are both now in bearish territory but have the possibility of returning to the upside.e
The slowest moving trend indicator is the line for stocks above the 200-Day MA. That fell this week from 54% to 49%. That's marginally into bearish territory.
Sectors:
Materials
XMJ fell this week -2.55%.
The chart is in a choppy sideways movement. The XMJ is underperforming the broad market index, XJO.
Indicators have turned down.
Until this sideways movement is concluded, its best to wait on most of the stocks in the Materials sector.
Four stocks in XMJ are, however, worth considering: Bluescope Steel (BSL), CSR, EVN and NST. The last two are both gold miners.
2. Health
Health reached another new one-year high this week but fell back on the last three days of the week. It finished down -1.15% for the week.
Three indicators have had bearish crosses. The Relative Strength shows that Health may be about to underperform the XJO.
Not a lot appeals currently in XHJ. CSL is the exception. Look to buy dips.
3. Inf.Tech.
XIJ is the smallest sector in our market. Only three large-cap stocks stocks make it into the ASX100. XIJ down this week -3.28%
The chart has formed a broadening top formation. These are unstable conditions.
The Index is underperforming the XJO. Look elsewhere for possibilities.
4. Consumer Discretionary.
Consumer Discretionary was sitting on the 200-Day MA, but bounced strongly off that, then fell like much of the market Wed-Fri. It finished down -2.74% for the week.
The performance of XDJ against the XJO has been very choppy for many weeks. It is currently underperforming. Until these unstable conditions disappear, it's probably best to look elsewhere.
FLT was the best stock in this sector, but it's run looks to have ended. This stock is showing a major divergence between Money Flow Index and RSI - that's usually a recipe for a pull-back.
5. Consumer Staples.
Consumer Staples was down this week -1.5%.
The "pipe stack" which occurred the previous Thursday right at horizontal resistance looked like an exhaustion move, and so it proved.
The chart remains above all key moving averages (20/50/200), so it might be OK if we get a bounce in the coming week.
Action in Consumer Staples is dominated by Wesfarmers and Woolworths. Woolworths has once again favoured over Wesfarmers.
6. Energy.
XEJ was one of the mainstays of the Australian market - until mid-January. Since then it has underperformed (see the bottom panel). This week it was down -2.6% and appears to be forming a bear flag.
Energy prices had a bullish reversal on heavy volume in America on Friday, so that might be a pointer to where XEJ will go - but we need to see evidence first before committing to this sector.
Steer clear of Energy until we see definite improvement.
7. Telecoms.
XTJ was down -4.8% this week, everything about this sector remains bearish. Any rally is likely to be a counter-trend rally. Avoid.
8. Industrials.
XNJ down this week -0.91%.
It's been out-performing the XJO since mid-January, but remains below its 200-Day MA. I'd need a more compelling reason to look at this while it remains in bearish territory.
Qantas, however, is an exception - it's worth a look
9. Financials
No chart currently available for XXJ. I'll try later.
XXJ is always the elephant in the room when we're talking about the Australian market. It has about 40% market share, so if XXJ struggles, it's likely that the Australian market will also struggle.
XXJ was up marginally this week, +0.07%. Despite being below the 200-Day MA, XXJ is outperforming the XJO since early December, 2017, except for a little dip in mid-February. That's not enough to say this is a "buy".
The best performer is IAG. It's worth a look.
All of the four big banks fell back below their 200-Day MAs this week. If you must have a big bank, then look to NAB - but there are better options around.
10. Utilities
Utilities was just down this week, -0.43%. It's been in a down-trend since early December, 2017.
Until we see a bullish situation develop in Utilities, avoid this sector.
11. Property.
Property had a positive week, +0.31%. It still remains in bearish territory.
There is one stock in this sector which is worth a look, LLC. Leave the others alone. LLC is a little different from most other Property stocks. It has a big construction component and operates in many overseas countries. It was up this week +2.17% and was the chief ingredient in the sectors positive result.
Summing Up:
The market is indecisive and, in some cases, unstable, resulting in large moves up and down.
It's best to wait until clear direction declares itself.
The short-term and medium-term trends are down. The long-term trend remains up, but only just.
Caution.
(20min delay)