ASX 200 Index Archives - the patient investor

September 21, 2024

ASX retraces

A tall shadow on the ASX 200 indicates short-term selling pressure and a likely retracement to test its new support level at 8100.

ASX 200 Index

Financials continue their advance, but gradually, with lower Trend Index peaks warning that buying pressure is fading.

ASX 200 Financials Index

The ASX 300 Metals & Mining Index hesitated after its recent rally and will likely re-test short-term support at 5200. Penetration of the descending trendline indicates that the downtrend has weakened, and a correction that respects support at 5000 would confirm that a bottom has formed.

ASX 300 Metals & Mining Index

Iron ore continues its downtrend as Chinese industrial demand weakens. A breach of support at $90 per tonne would confirm our target of $80.

Iron Ore

However, the All Ordinaries Gold Index broke resistance at 8500, signaling another advance with an expected target of 9000.

All Ordinaries Gold Index

Conclusion

The ASX 200 is retracing to test support at 8100. Respect will likely confirm another advance with a target of 8500. Financials and gold miners are strong, but iron ore remains in a downtrend with a long-term target of $80 per tonne.

June 2, 2017

Australia: ASX rallies

Iron ore is falling.

Iron Ore

And the broader DJ-UBS Commodity Index is testing support at 82. Breach would signal a decline to test the 2015 low at 74.

DJ-UBS Commodity Index

But the Aussie Dollar rallied Friday, the large engulfing candle suggesting another test of resistance at 75 US cents.

AUDUSD

Miners finished strongly, with the ASX 300 Metals & Mining index reflecting short-term buying pressure. 13-Week Twiggs Money Flow recovered above zero.

ASX 300 Metals & Mining

The ASX 200 is testing resistance at 5800. A 21-day Twiggs Money Flow trough above zero indicates medium-term buying pressure. Breakout above 5800 is likely and would suggest another test of 5950/6000.

ASX 200

Banks also rallied, with the ASX 300 Banks index headed for a test of 8500. Expect strong resistance.

ASX 300 Banks

Perhaps this UBS report had something to do with it.

I believe that the latest rally is a secondary reaction and that the ASX is headed for a down-turn, with miners and banks leading the way. But it’s no use arguing with the (ticker) tape.

A prudent speculator never argues with the tape. Markets are never wrong, opinions often are.

~ Jesse Livermore

May 19, 2017

ASX banks break support

The big banks fell sharply on the week’s turmoil, with the ASX 300 Banks Index breaking support at 8500. Breach signals a primary trend reversal, offering a medium-term target of 8000*.

ASX 300 Banks

* Target: 8500 – ( 9000 – 8500 ) = 8000

Resources stocks rallied over the week. Expect strong resistance on the ASX 300 Metals & Mining index at 3000.

ASX 300 Metals & Mining

Iron ore continues in a bearish narrow consolidation above support at $60. Breach would offer a short-term target of $50*.

Iron ore

* Target: 60 – ( 70 – 60 ) = 50

These are ominous signs for the ASX 200 which is testing medium-term support at 5700. A sharp fall on Twiggs Money Flow flags strong selling pressure. Breach of primary support at 5600* would signal a reversal, offering a target of 5200*.

ASX 200

* Target medium-term: 5600 – ( 6000 – 5600 ) = 5200

May 12, 2017

ASX 200 bearish consolidation

The big banks fell sharply on news of a new levy on bank liabilities in the latest budget. At this stage the ASX 300 Banks Index merely shows a secondary reaction. Breach of 8500, however, would signal a primary trend reversal, offering a medium-term target of 8000*.

ASX 300 Banks

* Target: 8500 – ( 9000 – 8500 ) = 8000

Resources stocks compensated, with the ASX 300 Metals & Mining Index rallying to test resistance at 2850/2900. Breakout is unlikely given the weak lead from iron ore. Reversal below 2700 remains likely and would strengthen the bear signal for resources.

ASX 300 Metals & Mining

Iron ore formed a bearish consolidation above support at $60. Breach would offer a short-term target of $50*.

Iron ore

* Target: 60 – ( 70 – 60 ) = 50

Selling of the Aussie Dollar continues, with a medium-term test of primary support at 71.50/72.00 now likely.

Aussie Dollar

Consolidation of the ASX 200 above support at 5800 is a bearish pattern. Breach would signal a correction to test primary support at 5600*. Twiggs Money Flow still indicates long-term buying pressure and only a fall below zero would warn of a reversal.

ASX 200

* Target medium-term: 5800 – ( 6000 – 5800 ) = 5600

December 3, 2016

ASX rally falters

The ASX 200 rally stalled at 5500. Declining 21-day Twiggs Money Flow indicates rising selling pressure. Breakout above 5500 would complete a bear trap, indicating a primary advance to 5800*. But reversal below 5400 would signal another test of primary support at 5150.

ASX 200

January 14, 2015

Health Care

One of the top-performing sectors, both in the US and Australia, is Health Care.

DJUS Health Care

The strength of a momentum strategy is the ability to identify and concentrate investment in outperforming sectors like this. Our S&P 500 Momentum strategy is overweight (40%) in this sector, with investments in Pharmaceuticals, Health Care Supplies and Biotechnology stocks.

February 17, 2014

ASX 200 resurgent

The ASX 200 is testing resistance at 5380. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Follow-through above 5400 would suggest another advance. Respect of 5380 is unlikely, but would warn of another correction.

ASX 200

* Target calculation: 5350 + ( 5350 – 5050 ) = 5650

ASX 200 VIX below 15 indicates low market risk.

January 28, 2014

ASX 200 breaks support

With secondary weakness in both China and the US, the ASX 200 broke support at 5200, signaling another correction. Reversal of 21-day Twiggs Money Flow below zero suggests short-term selling pressure. Recovery above 5250 is unlikely, but would indicate a bear trap. Failure of primary support at 5050 would warn of a primary down-trend.

ASX 200

The monthly chart illustrates the importance of primary support at 5000. Breach would confirm the down-trend, suggesting a fall to the long-term trendline, around 4600.

ASX 200

* Target calculation: 5300 + ( 5300 – 5200 ) = 5400

The ASX 200 VIX rose sharply, but (below 20) continues to reflect low market risk.

ASX 200

December 9, 2013

ASX correction

Despite bullish signs in Japan, China and the US, the ASX 200 is undergoing a correction. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Breach of medium-term support between 4900 and 5000 would indicate a test of primary support at 4650. Respect of medium-term support seems as likely, however, and would signal a healthy primary up-trend — as would a Twiggs Money Flow trough above zero.

ASX 200

The ASX 200 VIX index recovered above 15, but continues to indicate low market risk.

ASX 200

October 8, 2013

ASX signals correction despite Shanghai rally

Dow Jones Shanghai Index penetrated its (secondary) descending trendline today, suggesting an up-swing to test resistance between 298 and 304 at the upper trend channel. Reversal below 282 and the lower trend channel is unlikely, but would warn of another test of primary support at 248.

DJ Shanghai Index

The ASX 200, however, broke its rising trendline and short-term support at 5200, warning of a correction to primary support at 4650. Breach of medium-term support at 5000 would further strengthen the signal.

ASX 200