Australia: S&P/ASX 200 (.AXJO) pare losses as Trump reassures after Iran attacks

Australia: S&P/ASX 200 (.AXJO) pare losses as Trump reassures after Iran attacks

Australia: S&P/ASX 200 (.AXJO) pare losses as Trump reassures after Iran attacks

Australian shares trimmed losses on Wednesday after U.S. President Donald Trump’s comment on the Middle East tensions reassured investors rattled by Iranian missile attacks on U.S.-led forces in Iraq earlier in the day.

The S&P/ASX 200 index closed down 0.1%, or 8.8 points, at 6,817.60, after declining as much as 1.1% in early trade. The benchmark gained 1.4% in the previous session.

Tehran’s missile attack on U.S. forces, which was in retaliation to the killing of Iranian commander Qassem Soleimani last week, stoked concerns about a broader regional conflict.

Lifting market sentiment, Trump in a tweet late on Tuesday said “all is well!”, and added that an assessment of casualties and damage from the strikes was under way and that he would make a statement on Wednesday morning.

Markets pulled back from the losses as the rhetoric was not as harsh as investors were expecting, said James Tao, market analyst at CommSec.

Risk-averse sentiment hurt financials the most, with all of the “Big Four” heavyweight lenders falling. Top lender Commonwealth Bank of Australia shed 0.4%, while Westpac Banking Corp lost 0.3%.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index fell 0.6%, or 72.88 points, to 11,556.98.

Retirement homes operator Summerset Group fell 4.3% and was the top loser on the bourse, while Restaurant Brands New Zealand slipped 2.7%.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,972.00.

The projected lower bound is: 6,666.34.

The projected closing price is: 6,819.17.

Candlesticks

A black body occurred (because prices closed lower 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 29 white candles and 21 black candles for a net of 8 white candles.

A bearish harami occurred (where the current small black body is contained within an unusually large white body). During an uptrend (which appears to be the case with S&P/ASX 200) this pattern implies an end to the rally as the bulls appear to have exhausted themselves.

During a downtrend the bearish harami pattern is bullish as the bulls appear to be gaining strength as the bears weaken.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend (which appears to be the case with S&P/ASX 200) it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend it is called a bullish hammer.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 76.6111. This is not an overbought or oversold reading. The last signal was a buy 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 55.15. 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 129 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 20. This is not a topping or bottoming area. The last signal was a buy 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 5 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -8.800 at 6,817.600. Volume was 4% below average (neutral) and Bollinger Bands were 13% narrower than normal.

Open     High      Low     Close     Volume___
6,826.4006,831.7006,749.6006,817.600 570,659,584
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,769.38 6,752.44 6,584.03
Volatility: 15 14 14
Volume: 362,348,800 564,091,968 616,066,816

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.

Summary

S&P/ASX 200 is currently 3.5% above its 200-period moving average and is in an downward 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 bearish on .AXJO and have had this outlook for the last 4 periods.

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