Australia: S&P/ASX 200 (ASX:.AXJO) steadies to recover losses after a massive sell-off

Australia: S&P/ASX 200 (ASX:.AXJO) steadies to recover losses after a massive sell-off

Australia: S&P/ASX 200 (ASX:.AXJO) steadies to recover losses after a massive sell-off

Australian shares are set to open higher as markets steadied to recover losses after a massive sell-off.

SPI futures were up 11 points to 6401 at 3.42am AEST. By 5.50am they were up 48 points, or 0.8 per cent, to 6438. The Australian dollar was up 0.6 per cent to 67.60 US cents.

US stocks rebounded after Chinese efforts to stabilise the yuan offered investors some much-needed reassurance, one day after an abrupt escalation in the trade war instilled terror in global markets.

Federal Reserve Bank of St. Louis President James Bullard said US monetary policy is already accommodative and may not need to respond urgently to rising trade turmoil because that uncertainty has already been factored in by policy makers.

“US monetary policy cannot reasonably react to the day-to-day give-and-take of trade negotiations,” Bullard said in a presentation to the National Economists Club in Washington.

US job openings and hiring fell in June, suggesting that demand for labor was cooling in tandem with a slowing economy, which could provide another reason for the Federal Reserve to cut interest rates again next month.

“We think investors should take Trump at his word that he will move forward with the next round of tariffs on China,” writes Libby Cantrill, head of public policy and managing director at PIMCO.

“The administration is certainly concerned about the possible adverse effects on the financial markets and US consumers (this round of tariffs will disproportionately affect consumer goods like toys, apparel, and technology), and that may hinder an increase beyond 10 per cent. But there are no signs that the president will walk back from applying as much pressure as he can come September.”

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 6,662.77.

The projected lower bound is: 6,377.62.

The projected closing price is: 6,520.19.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 10.9154. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 36.41. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 22 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -181.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 5 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 41.400 at 6,519.500. Volume was 5% above average (neutral) and Bollinger Bands were 49% wider than normal.

Open     High      Low     Close     Volume___
6,478.1006,530.2006,467.5006,519.500 648,544,128
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,729.03 6,625.72 6,154.54
Volatility: 19 14 14
Volume: 655,465,536 645,699,520 626,520,576

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

S&P/ASX 200 is currently 5.9% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .AXJO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .AXJO and have had this outlook for the last 2 periods.

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