Australia: S&P/ASX 200 (.AXJO) set to dip slightly with a big week for US corporate earnings and global economic data ahead

Australia: S&P/ASX 200 (.AXJO) set to dip slightly with a big week for US corporate earnings and global economic data ahead

Australia: S&P/ASX 200 (.AXJO) set to dip slightly with a big week for US corporate earnings and global economic data ahead

Australian shares are set to dip slightly with a big week for US corporate earnings and global economic data ahead.

Investors are in for another busy week of corporate earnings, including McDonald’s on Tuesday, Boeing and Microsoft on Wednesday, and Amazon and American Airlines Group on Thursday.

Capital Economics’ Simona Gambarini says equities and corporate bonds in the US have so far shrugged off the worrying signs for the global economy coming from lower oil prices. “But we suspect that it won’t be long before slower global growth, including in the US, takes a toll on both,” she wrote in a note.

The forecaster also predicts a strike by GM workers will continue to affect incoming US data next week, particularly durable goods orders.

“Having cut rates in September, the ECB is almost certain to leave policy unchanged next Thursday at Mr Draghi’s last ECB Governing Council meeting,” analysts wrote.

“And in a busy week for data, we think that business surveys for the euro-zone and Germany remained downbeat in October and that consumer confidence weakened too. This would bolster the doves on the ECB who, we suspect, will eventually push for even more policy stimulus next year.”

In the US, Federal Reserve Vice Chairman Richard Clarida on Friday reiterated his stance that the central bank will “act as appropriate” to extend the US recovery and shield the economy from risks posed by geopolitical tensions and slowing global growth.

US economic data has grown increasingly gloomy, a development that could see the US Federal Reserve cut interest rates later this month, its third rate cut this year. Money markets are pricing in an 82 per cent chance of a rate cut at the October 30 meeting, Refinitiv data show.

There was also poor data out of China, with third-quarter growth slowing more than expected to its weakest pace in almost three decades as the bruising US trade war hit factory output. GDP rose 6.0 per cent year-on-year.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 6,810.52.

The projected lower bound is: 6,491.49.

The projected closing price is: 6,651.01.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 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 73.1235. 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 51.24. 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 74 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 43. This is not a topping or bottoming area. 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 3 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -35.000 at 6,649.700. Volume was 4% below average (neutral) and Bollinger Bands were 1% narrower than normal.

Open     High      Low     Close     Volume___
6,684.7006,684.7006,633.9006,649.700 633,428,224
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,622.31 6,604.17 6,386.93
Volatility: 13 15 13
Volume: 550,542,784 668,494,976 635,468,288

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 4.1% 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 9 periods.

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