Australia: S&P/ASX 200 (.AXJO) shares subdued ahead of the U.S. Federal Reserve’s policy meeting

Australia: S&P/ASX 200 (.AXJO) shares subdued ahead of the U.S. Federal Reserve’s policy meeting

Australia: S&P/ASX 200 (.AXJO) shares subdued ahead of the U.S. Federal Reserve’s policy meeting

Australian shares were subdued on Tuesday, as markets trod cautiously in the wake of heightened tensions in the Middle East and ahead of the U.S. Federal Reserve’s policy meeting this week.

The S&P/ASX 200 index declined 0.1% or 8.2 points to 6,665.30 by 0227 GMT. The benchmark closed 0.1% higher on Monday.

Markets await the U.S. Federal Reserve policy decision on Wednesday, where a rate cut is widely expected, but look forward to a further policy outlook considering recent developments in global issues.

During its policy meet, the U.S. Fed will have to consider heightened geopolitical tensions around the globe, such as U.S.-Iran relations following weekend attacks on Saudi Arabia which shut 5% of the world’s oil supply.

Australian miners fell 1.4% on the back of lower iron ore prices and were the worst performers. The subindex was dragged lower by industry heavyweight BHP Group’s 1.4% decline and Rio Tinto’s near 2% fall. Gold stocks shed 0.7% ahead of the U.S. Fed meeting.

Financials did not show much strength either, with the subindex slipping 0.1% lower. Among the “Big Four” lenders, Commonwealth Bank of Australia and Westpac Banking Corp were each trading about 0.1% lower.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,855.99.

The projected lower bound is: 6,535.79.

The projected closing price is: 6,695.89.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 87.5048. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 60.80. 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 51 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 101.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 1 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 14 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 21.800 at 6,695.300. Volume was 13% above average (neutral) and Bollinger Bands were 6% narrower than normal.

Open     High      Low     Close     Volume___
6,673.5006,695.3006,649.1006,695.300 745,936,000
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,640.65 6,624.52 6,267.79
Volatility: 7 16 14
Volume: 712,833,792 660,762,944 637,789,888

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 6.8% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into .AXJO (mildly bullish). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 7 periods.

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