Australia: S&P/ASX 200 (.AXJO) Investors are set to react cautiously to any positive trade deal news

Australia: S&P/ASX 200 (.AXJO) Investors are set to react cautiously to any positive trade deal news

Australia: S&P/ASX 200 (.AXJO) Investors are set to react cautiously to any positive trade deal news

Investors are set to react cautiously to any positive trade deal news this week, with a phase one US-China trade pact before the end of the year looking increasingly unlikely.

Despite positive comments from both Beijing and Washington last week, ASX futures were up just 12 points, or 0.2 per cent, ahead of Monday’s open.

While China appears eager to make a deal, the US has proved more willing to hold off in the near term.

“Wall Street is close to the all-time high and the US consumers are holding in there. That just emboldens the US administration in these negotiations,” said Antipodes Partners chief investment officer Jacob Mitchell.

“But there’s still enough pressure to ultimately find a resolution, even one that’s relativity superficial.”

Cautious sentiment around the banks is also likely to drag the market down this week, after the S&P/ASX 200 Banks Index sank to a six-month low last week.

AUSTRAC’s claims that Westpac engaged in  systemic and frequent failures to adhere to anti-money laundering laws and hampered its ability to prevent child exploitation has weighed heavily on the sector.

“It’s hard to get enthusiastic on the banks,” said Mr Tagliaferro. “We all know the regulatory scrutiny has increased and to some extent these are one-offs and they shouldn’t impact on the valuation, but over-arching all that is that credit growth is still weak in Australia and there’s still pressure on net interest margins.”

NAB is also facing an AUSTRAC investigation, Westpac and ANZ were hit with a junk insurance class action last week, while Commonwealth Bank on Tuesday pleaded guilty to selling life insurance through unsolicited phone calls.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 6,846.69.

The projected lower bound is: 6,574.54.

The projected closing price is: 6,710.61.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 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 29.7313. 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 49.94. 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 99 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 -61. This is not a topping or bottoming area. The last signal was a buy 0 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 1 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 36.900 at 6,709.800. Volume was 18% below average (neutral) and Bollinger Bands were 41% narrower than normal.

Open     High      Low     Close     Volume___
6,672.9006,725.1006,672.9006,709.800 522,525,344
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,743.88 6,685.56 6,491.75
Volatility: 14 13 13
Volume: 591,114,240 609,934,400 638,215,808

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 3.4% 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 19 periods.

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