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Saturday, September 18, 2021

Australia: S&P/ASX 200 (.AXJO) All Hinges on Virus News

Australia: S&P/ASX 200 (.AXJO) All Hinges on Virus News

The Australian share market has begun its week moderately lower.

The Shayne Heffernan Idea

We have several different types of policies all bundled together, and we’re going to be looking for insights as to which of these policies are working and which ones to reinforce. “The shutting down of large parts of the economy was not anticipated in the construction of our economic statistics.” – Shayne Heffernan PhD in Economics

The question will be whether the US data will converge to the low end of the spectrum as US states issued stay-at-home orders in late March and early April, the effects of which will be picked up by this month’s surveys.

Why This Matters

The major banks are also down, with National Australia Bank (-1pc) being the weakest performer in that cohort.

In a statement to the stock exchange, NAB flagged that its first-half earnings would take a $1.2 billion hit.

This includes $188 million worth of extra “customer remediation” costs related to the “fee for service” scandal, unearthed during the banking royal commission.

But the bulk of these additional costs are accounting-related issues.

This includes a change to its software capitalisation policy, which will reduce earnings by $742 million (after tax).

NAB also wrote down the value of its 20 per cent stake in MLC Life due to the “challenging operating environment within the life insurance industry”, which will affect its earnings by $214 million.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 5,931.14.

The projected lower bound is: 4,822.48.

The projected closing price is: 5,376.81.


A black body occurred (because prices closed lower 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 21 white candles and 29 black candles for a net of 8 black 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 64.8418. This is not an overbought or oversold reading. The last signal was a sell 1 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 49.33. 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 buy 16 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 80. 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 15 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -77.900 at 5,409.600. Volume was 72% below average (consolidating) and Bollinger Bands were 17% wider than normal.

Open        High       Low        Close      Volume
5,486.300   5,490.600  5,401.500  5,409.600  247,093,728
Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period    50-period      200-period
Close:           5,346.90     5,900.14       6,519.18
Volatility:      38           66             36
Volume:          983,360,128  1,161,069,184  744,496,320

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 17.0% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 4 periods.

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