Australia: S&P/ASX 200 (.AXJO) poised to start the week lower

Australia: S&P/ASX 200 (.AXJO) poised to start the week lower

Australia: S&P/ASX 200 (.AXJO) poised to start the week lower

Australian shares are poised to start the week lower, dragged down by a tech rout on Wall Street. Base metals also retreated and oil extended its rout. ASX futures were 37 points lower.

Shares on Wall Street fell to end their week, with the S&P 500 sliding 0.9 per cent, ending below the 2900 point level. The Dow slid 0.8 per cent or 202 points to end below the 26,000 point mark. The Nasdaq dropped 1.7 per cent.

The sell-off was broad. Eight of the 11 major S&P sectors ended the day lower. The Dow was paced lower by Goldman Sachs, Caterpillar and Cisco. Goldman shed 3.9 per cent amid a slew of reports about the firm’s links to Malaysia’s investment fund, 1Malaysia Development Berhad.

No local or overseas data is scheduled for today.

NAB business confidence and conditions for October will be released on Tuesday, with Westpac-MI consumer confidence for November and wage cost index for the third quarter on Wednesday. Consumer inflation expectations for November and October’s labour force report are scheduled for Thursday.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 6,058.68.

The projected lower bound is: 5,769.01.

The projected closing price is: 5,913.85.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

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 93.6709. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 8 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 50.90. 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 8 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 110.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 8 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 6 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -6.400 at 5,921.800. Volume was 6% below average (neutral) and Bollinger Bands were 33% wider than normal.

Open High Low Close Volume___
5,928.2005,933.5005,896.4005,921.800 545,712,000

Technical Outlook
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 5,849.38 6,029.79 6,057.65
Volatility: 10 16 13
Volume: 587,944,064 599,756,288 583,326,912

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 2.2% below 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 46 periods.

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