Australia: S&P/ASX 200 (.AXJO) set for a sluggish start

Australia: S&P/ASX 200 (.AXJO) set for a sluggish start

Australia: S&P/ASX 200 (.AXJO) set for a sluggish start

Australian shares are set for a sluggish start to the week following reports US President Donald Trump has called for fresh tariffs on Chinese products.

The news took the shine off US markets on Friday, which closed flattish after a sharp dip when the story broke around midday.

AMP Capital’s chief economist Shane Oliver said any tariffs that are imposed won’t directly impact local markets, but all eyes will remain on the US next week to see if Mr Trump carries through.

“We probably would have been stronger tomorrow were it not for talk of Trump wanting to go ahead with the extra tariffs,” he told AAP on Sunday.

Dr Oliver has tipped the Australian share market to open with the slightest of gains at around five or six points up.

On Tuesday, the release of the Reserve Bank’s last meeting’s minutes is expected to show the monetary authority remains optimistic about the local economy, with no urgency to move on interest rates.

However, homeowners and investors may not be so happy when the Australia Bureau of Statistics releases house price data for June on the same day.

Dr Oliver says it’s set to show yet another fall – around one per cent, led by Sydney and Melbourne.

Meanwhile, population figures to be released on Thursday are expected to show strong growth, according to Dr Oliver, and may add fuel to the immigration debate.

“We’ll probably see Queensland continuing to benefit there relative to NSW,” he said.

Internationally, most interest will remain focused on the trade war between China and the US.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 6,162.68.

The projected upper bound is: 6,259.32.

The projected lower bound is: 6,067.00.

The projected closing price is: 6,163.16.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 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 53.5015. This is not an overbought or oversold reading. The last signal was a buy 3 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 40.67. 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 59 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 -67. This is not a topping or bottoming area. The last signal was a buy 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 sell 7 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 36.600 at 6,165.300. Volume was 5% below average (neutral) and Bollinger Bands were 51% wider than normal.

Open High Low Close Volume___
6,128.7006,173.3006,128.7006,165.300 537,923,648

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 6,192.99 6,259.30 6,068.00
Volatility: 11 10 11
Volume: 546,158,976 557,531,264 562,809,344

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 1.6% above its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 6 periods.

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