Australia: S&P/ASX 200 (.AXJO) set to open lower as investors, wary of a still further escalation of military activity between Iran and the US

Australia: S&P/ASX 200 (.AXJO) set to open lower as investors, wary of a still further escalation of military activity between Iran and the US

Australia: S&P/ASX 200 (.AXJO) set to open lower as investors, wary of a still further escalation of military activity between Iran and the US

Australian shares are set to open lower as investors, wary of a still further escalation of military activity between Iran and the US, dash at least near-term hopes for an extension of 2019’s global markets rally.

ASX futures were 4 points lower at 6656 in New York on Friday local time. The S&P/ASX 200 notched a 42.9 point or 0.6% advance to 6733.5 on Friday in Sydney.

Amid a shift to safe-haven assets such as the US dollar, the Australian dollar slid 0.6% to US69.50¢; its now 1% lower against the greenback this year.

In New York, shares ended lower though they pared their initial sharp losses. The S&P 500 shed 0.7%.

“So the stock market didn’t finish at another new high,” Fundstrat’s Victor Rcanelli said in a note. “Wait, you say, how can that be? Before you begin to pout, shriek in anger, or walk out to the window ledge, let’s just note that after a ‘huuuuge’ fourth quarter, up 8.5%, as a certain sitting president would say, the market was due.”

Mr Racanelli acknowledge that the killing of Iranian General Qassam Soleimani dented the New Year rally.

“It’s hard to interpret the long term effects of this unexpected move by the US,” Mr Racanelli said. “Investors can expect retaliation from Iran, but the country is struggling economically.

“The pundits love to say that this is a big deal and could lead to war while others say it’s nothing, just another bump in the Middle East. Frankly, I lean to the latter but really the fact is that no one knows anything when it comes to military conflict. Once hostilities begin, predictions go out the window.”

The yield on the US 10-year note fell 9 basis points to 1.79%. Gold spiked 1.5% higher, brent crude leapt 3.6%.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 6,703.97.

The projected upper bound is: 6,884.13.

The projected lower bound is: 6,585.33.

The projected closing price is: 6,734.73.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 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 18.9769. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 47.31. 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 126 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 -70. This is not a topping or bottoming area. The last signal was a buy 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 2 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 42.900 at 6,733.500. Volume was 40% below average (neutral) and Bollinger Bands were 5% wider than normal.

Open     High      Low     Close     Volume___
6,690.6006,788.2006,690.6006,733.500 365,163,360
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,781.49 6,746.96 6,574.57
Volatility: 12 14 14
Volume: 455,874,688 569,212,544 618,538,240

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 2.4% 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 1 periods.

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