Broad weakness across non-resource stocks dragged the Australia: S&P/ASX 200 (.AXJO) below the 6100

Broad weakness across non-resource stocks dragged the Australia: S&P/ASX 200 (.AXJO) below the 6100

Broad weakness across non-resource stocks dragged the Australia: S&P/ASX 200 (.AXJO) below the 6100

Broad weakness across non-resource stocks dragged the Australian sharemarket below the 6100 point level as the domestic earnings season failed to dispel fears the economy was sliding into recession.

The S&P-ASX 200 index climbed 0.3 per cent at the open after a Wall Street closed slightly firmer last night, supported by hopes the US Federal Reserve would slowdown its quantitative bond-selling program but weighed down by concerns of a meaningful US-China trade deal.

But the benchmark index dropped to a 0.5 per cent loss and closed down 10.4 points, or 0.17 per cent, at 6096.5 with miners having another strong session as copper and gold prices rallied overnight, with gold hitting a 10-month high of $US1346 an ounce.

Consumer stocks struggled after retail giant Woolworths warned of subdued consumer demand.

The Australian dollar climbed US0.5¢ overnight to US71.60¢ as the US dollar dropped after comments from Fed governors bolstered hopes the Fed would refrain from tightening monetary conditions.

The greenback was also under pressure from reports that US negotiators were asking China to keep the value of the yuan stable as part of trade negotiations, although strategists noted intervening to do so was contrary to the US demands for free-floating currencies.

Government 10-year bond yields fell 3.4 points to 2.101 per cent.

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 5,925.89.

The projected upper bound is: 6,243.21.

The projected lower bound is: 5,967.35.

The projected closing price is: 6,105.28.

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 29 white candles and 21 black candles for a net of 8 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 69.3072. This is not an overbought or oversold reading. The last signal was a sell 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 70.13. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 5 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 73. This is not a topping or bottoming area. The last signal was a sell 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 sell 1 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -10.400 at 6,096.500. Volume was 10% above average (neutral) and Bollinger Bands were 6% wider than normal.

Open High Low Close Volume___
6,106.9006,125.8006,077.5006,096.500 675,836,928

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

Moving Averages: 10-period 50-period 200-period
Close: 6,078.62 5,804.00 6,008.56
Volatility: 8 15 14
Volume: 642,411,648 595,580,928 592,654,016

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 1.5% 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 31 periods. Our momentum oscillator is currently indicating that .AXJO is currently in an overbought condition.

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