Australia: S&P/ASX 200 (.AXJO) set to drop amid global sell-off triggered by Turkey

Australia: S&P/ASX 200 (.AXJO) set to drop amid global sell-off triggered by Turkey

Australia: S&P/ASX 200 (.AXJO) set to drop amid global sell-off triggered by Turkey

While equity markets have sailed blithely on for weeks, not worrying too much about the disintegrating relationship between the US and its major trading partners and softening global industrial production, it took one of those unforeseen Black Swan events to bring things to an abrupt halt on Friday.

Actually, not so much a Black Swan event — it was more to do with Turkey, and the problems have been brewing there for a while.

On Friday the Turkish lira collapsed, falling by as much as 18 per cent in the day, for a variety of compelling reasons including the Trump administration’s decision to double tariffs on metal imports from Turkey.

That, and the conviction the Turkish economy is teetering on the edge of a very deep and worrying precipice.

President Tayyip Erdogan’s urging for Turks to swap gold and dollars backfired. They, and the investment world, dumped the currency and bolted to the safety of US and German bonds.

The US dollar was also something of a sanctuary as well.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,378.73.

The projected lower bound is: 6,188.73.

The projected closing price is: 6,283.73.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 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 68.7821. This is not an overbought or oversold reading. The last signal was a sell 7 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 55.21. 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 34 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 96. This is not a topping or bottoming area. The last signal was a sell 0 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 19 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -19.300 at 6,278.400. Volume was 18% below average (neutral) and Bollinger Bands were 58% narrower than normal.

Open High Low Close Volume___
6,297.7006,307.2006,277.4006,278.400 451,646,976

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

Moving Averages: 10-period 50-period 200-period
Close: 6,268.15 6,194.77 6,031.23
Volatility: 7 10 10
Volume: 498,765,344 543,987,648 551,942,464

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 low 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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