Australia: S&P/ASX 200 (.AXJO) slides again as economic reality sets in

Australia: S&P/ASX 200 (.AXJO) slides again as economic reality sets in

Australia: S&P/ASX 200 (.AXJO) slides again as economic reality sets in

Australian shares are set to open lower as Wall Street struggled in the wake of fresh record unemployment in the US and another push from Donald Trump to reopen the economy early despite the advice of health experts.

ASX futures were down 72 points or 1.3% at 4.51am AEST while the Australian dollar was down 0.2% to 63.09 US cents.

Mr Trump is expected to lay out a strategy to phase out the month-long economic shutdown aimed at stanching the coronavirus pandemic, despite concerns from health experts, governors and business leaders about the dangers of lifting restrictions without widespread testing in place.

Trump will push states to lift stay-at-home orders that have shut down business and social life as the number of deaths recorded in the United States on Wednesday rose by 2500, a second consecutive daily record. The US death toll in the global pandemic is now more than 31,000, higher than any other nation.

Another 5.2 million more Americans sought unemployment benefits last week, the Labour Department reported on Thursday, lifting total filings for claims over the past month to more than 20 million.

Meanwhile China is expected to record negative GDP growth for the first time in 40 years.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 5,940.27.

The projected lower bound is: 4,831.04.

The projected closing price is: 5,385.65.

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 22 white candles and 28 black candles for a net of 6 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 85.0972. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 15 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 49.61. 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 buy 14 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 105.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 13 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -50.400 at 5,416.300. Volume was 27% above average (neutral) and Bollinger Bands were 17% wider than normal.

Open High Low Close Volume___
5,466.7005,466.7005,345.0005,416.3001,115,575,168
Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 5,298.48 5,962.71 6,532.04
Volatility: 43 66 36
Volume: 1,054,605,760 1,160,464,384 743,382,080

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 17.1% below 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 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 2 periods.

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