Australia: S&P/ASX 200 (.AXJO) Biggest losses since August 2019

Australia: S&P/ASX 200 (.AXJO) Biggest losses since August 2019

Australia: S&P/ASX 200 (.AXJO) Biggest losses since August 2019

The S&P/ASX 200 dropped 2.25 per cent to 6978.3 points today. (The second decimal point is important because the index dropped 2.21 per cent on October 3 last year).

The 2.25 per cent decline is the worst since August 2019, when there were fears of a recession in Australia after the US bond yield curve inverted. 

On the ASX the energy, information technology, industrial, and consumer discretionary sectors all fell more than -3 per cent. The best performing sector was communications with a fall of -1.4 per cent, thanks  to a strong performance by New Zealand’s Chorus Ltd, up 5.6 per cent after upgrading full year guidance. 

At the end of the session 14 companies from the top 200 where higher and 186 were lower. Of the higher companies, eight are gold miners. The traditional safe haven gold reached a record high in Australian dollars of $2537 on Monday, and a seven-year high of $1680 in US dollars. 

The gold price in the local currency was boosted by the Aussie dollar touching new ten-year lows when it briefly traded at US65.85¢ at 9am on Monday morning. The Aussie then settled into trading at US66.10¢ for the rest of the day. 

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 6,950.19.

The projected upper bound is: 7,132.65.

The projected lower bound is: 6,834.81.

The projected closing price is: 6,983.73.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 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 27.5052. This is not an overbought or oversold reading. The last signal was a sell 2 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 44.28. 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 21 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 -65. This is not a topping or bottoming area. The last signal was a sell 1 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 0 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -160.700 at 6,978.300. Volume was 38% above average (neutral) and Bollinger Bands were 1% narrower than normal.

Open     High      Low     Close     Volume___
7,139.0007,139.0006,967.9006,978.300 812,834,304
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 7,104.01 6,946.87 6,707.69
Volatility: 15 14 14
Volume: 745,459,264 584,211,904 624,833,216

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 4.0% above its 200-period moving average and is in an upward 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 bullish on .AXJO and have had this outlook for the last 31 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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