Australia: S&P/ASX 200 (.AXJO) shares are poised to open little changed, reflecting a pause in the rally that lifted US stocks to record highs

Australia: S&P/ASX 200 (.AXJO) shares are poised to open little changed, reflecting a pause in the rally that lifted US stocks to record highs

Australia: S&P/ASX 200 (.AXJO) shares are poised to open little changed, reflecting a pause in the rally that lifted US stocks to record highs

Australian shares are poised to open little changed, reflecting a pause in the rally that lifted US stocks to record highs last week.

ASX futures were down 2 points to 6773 near 8.25am AEDT. The currency slipped.

Shares on Wall Street were modestly higher at the close.

Denting sentiment was a report that the mood in Beijing about a trade deal was pessimistic due to President Donald Trump’s reluctance to roll back tariffs, according to CNBC, citing a government source.

Morgan Stanley’s equities team reiterated its cautious outlook. “While we underestimated the positive impact of easing monetary policy on equity prices this year, our cautious earnings forecasts have been correct and those forecasts are telling the same story as a year ago–forward 12 month EPS estimates are about to start falling.

“It is rare for the S&P 500 to experience a multi month decline in the forward 12 month EPS forecast, but in the rare occasions where this has happened, the major averages fell at least 5-10%.

Today’s agenda

Local: RBA’s Kent speaking in Sydney (9.05am),  RBA Board Meeting Minutes (11.30am)

Overseas data: US total net TIC flows September, Housing starts October, Building permits October

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,642.13.

The projected upper bound is: 6,896.70.

The projected lower bound is: 6,641.65.

The projected closing price is: 6,769.18.

Candlesticks

A black body occurred (because prices closed lower 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 32 white candles and 18 black candles for a net of 14 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 74.0210. This is not an overbought or oversold reading. The last signal was a sell 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 57.18. 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 95 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 123.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 3 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 5 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -26.900 at 6,766.800. Volume was 33% below average (neutral) and Bollinger Bands were 46% narrower than normal.

Open High Low Close Volume___
6,793.7006,799.2006,749.1006,766.800 429,230,496

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

Moving Averages: 10-period 50-period 200-period
Close: 6,732.75 6,678.69 6,478.41
Volatility: 12 12 13
Volume: 585,417,024 618,645,760 637,640,256

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 4.5% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 bullish on .AXJO and have had this outlook for the last 15 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.