Australia: S&P/ASX 200 (.AXJO) economic data events combined to knock the local market lower
The longest rally in Australian shares in over two years came to abrupt end on Wednesday as reduced rate cut bets from the RBA, uncertainty over progress in US-China trade negations and caution ahead of several key central bank and economic data events combined to knock the local market lower.
The benchmark S&P/ASX 200 slumped 55.9 points, or 0.8 per cent, to close at 6689.5, logging its first decline since October 18. At seven sessions, the winning streak was the equal-longest since October 2017.
After posting modest declines on the open, the losses accelerated just before midday following the release of Australia’s September quarter consumer price inflation (CPI) report. The weakness may have also been prompted by declines in regional markets as investors reacted negatively to a report from Reuters that suggested ‘Phase 1’ of the trade deal reached between the US and China may not be finalised when APEC leaders’ meet in Chile next month.
After a solid run for the local market, caution ahead of the US Federal Reserve’s October interest rate decision early Thursday morning in Australia may have also prompted profit-taking by some investors.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 6,627.37.
The projected upper bound is: 6,825.38.
The projected lower bound is: 6,561.87.
The projected closing price is: 6,693.62.
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 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 34 white candles and 16 black candles for a net of 18 white candles.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 65.2639. This is not an overbought or oversold reading. The last signal was a sell 0 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 52.72. 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 82 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 43. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.
Rex Takasugi – TD Profile
S&P/ASX 200 closed down -55.900 at 6,689.500. Volume was 6% below average (neutral) and Bollinger Bands were 2% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 6,694.06 6,635.01 6,424.07
Volatility: 9 13 13
Volume: 604,780,288 646,901,568 638,794,816
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.
S&P/ASX 200 is currently 4.1% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. 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 2 periods.