Australia: S&P/ASX 200 (.AXJO) the big unknown, and it suggests markets are likely to remain volatile until this uncertainty is resolved

Australia: S&P/ASX 200 (.AXJO) the big unknown, and it suggests markets are likely to remain volatile until this uncertainty is resolved

Australia: S&P/ASX 200 (.AXJO) the big unknown, and it suggests markets are likely to remain volatile until this uncertainty is resolved

The ASX 200 closed down 2 per cent or 104 points to 5,076.

Earlier in the day, the benchmark indexhad jumped as high as 3.6 per cent, before suffering a sharp reversal in sentiment in the afternoon.

The Federal Government’s latest stimulus package (the $130 billion wage subsidy) had initially boosted the market on Monday and Tuesday morning.

The big bank stocks boosted the market in the first few hours of trade but ended the session mixed, with ANZ (+1.1pc), Westpac (+2.1pc) and NAB (+2.3pc) closing well off their highs and Commonwealth Bank (-3.3pc) ending in the red.

The All Ordinaries index fell by 83 points or 1.6 per cent to 5,110 points.

Despite the global market surge, investors also hedged their bets on safe-haven assets.

Spot gold lifted to $US1,613 per ounce.

Meanwhile, oil prices have plunged to their lowest value in 18 years.

With much of the world in lockdown, people are not travelling and business has slowed down, reducing the need for jet fuel and petroleum.

But Saudi Arabia, Russia and OPEC nations will ramp up production and flood the world with an oversupply of oil.

Brent crude plummeted by 9.5 per cent to $US22.57 per barrel.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

By the way, prices are vulnerable to a correction towards 6,074.18.

The projected upper bound is: 5,565.69.

The projected lower bound is: 4,507.80.

The projected closing price is: 5,036.75.

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 23 white candles and 27 black candles for a net of 4 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 65.7079. This is not an overbought or oversold reading. The last signal was a buy 5 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 40.65. 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 4 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 45. This is not a topping or bottoming area. The last signal was a buy 5 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 3 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -104.600 at 5,076.800. Volume was 82% above average (neutral) and Bollinger Bands were 189% wider than normal.

Open     High      Low     Close     Volume___
5,181.4005,366.4005,005.8005,076.8001,522,548,096
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 4,904.64 6,309.03 6,599.99
Volatility: 89 63 34
Volume: 1,499,865,088 1,068,923,456 727,460,224

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 23.1% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 24 periods.

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