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Australia: S&P/ASX 200 (.AXJO) Investors reacted positively to the European Central Bank’s decision to lower interest rate

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Sydney, Australia - August 7, 2017: Boats and ferries ply the waters of Circular Quay in Sydney, Australia. The iconic form of the Sydney Opera House and the Royal Botanic Gardens beyond complete the scene.

Australia: S&P/ASX 200 (.AXJO) Investors reacted positively to the European Central Bank’s decision to lower interest rate

Investors reacted positively Thursday to the European Central Bank’s decision to lower interest rates and engage in a new round of bond-buying as well as overtures between the U.S. and China ahead of the next round of trade talks.

At the close, the Dow Jones Industrial Average added 45.68 points or 0.17% while the S&P 500 gained 0.29% and the Nasdaq Composite rose 0.3%.

On the New York Stock Exchange, nearly 3.1 billion shares changed hands with 1,614 issues advancing and 1,339 issues declining. Bank of America (BAC), Baker Hughes (BHGE) and General Electric (GE) led the most actives.

In addition to lowering interest rates by 10 basis points, the ECB announced a new round of bond-buying, committing itself to an ultraloose monetary policy for an extended period. The move is designed to isolate the eurozone from trade tensions and a global downturn. The move commits departing ECB President Mario Draghi’s successor, Christine Lagarde, to negative interest rates and an open-ended quantitative easing program. Lagarde last week indicated she’s on board.

Asian markets closed mixed. Hong Kong’s Heng Seng was off 0.26% while Japan’s Nikkei and China’s Shanghai Composite both added 0.75%. Australia’s S&P/ASX climbed 0.25%.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,817.43.

The projected lower bound is: 6,489.84.

The projected closing price is: 6,653.64.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 28 white candles and 22 black candles for a net of 6 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 71.9820. 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 57.10. 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 48 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 107.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 2 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 buy 11 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 16.900 at 6,654.900. Volume was 1% above average (neutral) and Bollinger Bands were 7% narrower than normal.

Open     High      Low     Close     Volume___
6,638.0006,687.4006,638.0006,654.900 662,649,856
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,612.55 6,625.55 6,253.66
Volatility: 11 16 14
Volume: 686,755,968 649,094,720 636,796,992

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 6.4% above 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 moderate flows of volume into .AXJO (mildly bullish). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 4 periods.

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