Stock Charts Technical Analysis - Australian & US Market Report 10 Apr 17

First of all a big thank you for all of you who sent positive thoughts to those who have suffered loss due to cyclone Debbie and the recent flooding which followed hitting half of the Queensland coast and Northern NSW very hard. In quite a number of places the levels the flood waters reached were above anything on record or in other words new all-time highs were made. Most people believed this was impossible and never could happen but if seeing is believing then we should all be believers seeing the pictures on the news or the internet or for some of us in the flesh. This reconfirms to me that in respect to the market ANYTHING is possible. Can we make new all-time highs and keep powering ahead, yes we can. Likewise can we hit our head here and fall off the perch, yes we can. More than likely it will be something in between but you can’t rule these extremes out as these once in a hundred year floods seem to come around a lot more frequently than that these days and the market is no different.

We are 6 weeks on from the all-time highs made on the 1st of March for the US markets and have been working lower ever since. We are seeing a rotation for the moment from the US into other markets which haven’t rallied quite as hard since November’s US election bottom. However will this continue to be the case if we start to move onto a war footing? As I am sure all of you are aware the US dropped 59 Tomahawk Cruise Missiles on a Syrian airfield on Friday. Some of you may be aware that this isn’t a random event. 100 years ago, the US, on 6th April 1917 entered the First World War. Friday was the 7th April, almost 100 years to the day. History has an uncanny ability of repeating itself. I don’t believe that this is the start of another World War but having said that neither the first nor the second World Wars started out to become what they become.

Stock Charts Technical Analysis

Market are ripe, especially the US markets, for a correction so the question is will dropping bombs on Syria and whatever follows be the out of left field event and catalyst which kicks this off? The Time and the Price of the markets have already been indicating that this could be the case. Having protection in place, while it’s still affordable, is always a smart thing to do as you just need to talk to those who lost everything in the floods recently and you will see just how important having this really is. 

Buckle up and tighten your stops as this could get bumpy, really quickly. Please read on for more stock charts technical analysis for 10 April 2017.

Australian Stock Market Report (XJO)

Aussie Market (XJO) Monthly Chart – last 5862.5, Friday 07-Apr-17

Australian Stock Market Report  

S&P / ASX 200 Chart - 1 Week Candlestick Chart   S&P / ASX 200 Chart - 1 Month Candlestick Chart

Important Points to Note from the Monthly Chart:

  • The monthly trend is currently Up. We have a higher top and a higher bottom in place. March was an up month so we now have an Uptrend on the Monthly.
  • March formed an Up month (a month with a higher high and a higher low than the month before) closing above the open but down a little from the high indicating that the buyers had the upper hand for the month.
  • We have clearly found resistance up around the 5827.5 January 9th top which was retested (5833.2) on February 16th and the most recent top being 5901.5 on March 31st is still within tolerance of this now being a potential Triple Top reversal pattern. We still need to confirm that 5901.5 is a top on the monthly before we have the initial stages of this setting up.
  • These two 5827.5 & 5833.2 tops are also just shy of 5835.6 level which is the 7/8’s retracement of the whole move down from the March 2015 top to the February 2016 bottom which explains why they have found resistance around this area. 5901.5 is just shy of the 5906.9 level which is the 75% retracement of the whole GFC move down.
  • The January top 5827.5 is a confirmed monthly top only to be slightly exceeded by 5.7 points in February which has now extended into March (74 points higher) making a fresh higher top. This looks to be the formation of a larger top that could take multiple months as compared to the normal single month. This is somewhat similar to the March-April 2015 top that formed which turned out to be a significant top and the highest level we have traded at since the GFC.
  • We are still under the uptrend line running through the tops from January 2016 and March 2017 is the 5th month to reach this line and not be able to move higher so it’s clearly acting as resistance. We are 95.4 points or 1.6% shy of retesting the 5996.9 March 2015 top which is strong resistance and a possible Double Top pattern?

US Stock Market Report (S&P 500 & DJIA)

US Markets (S&P 500) Monthly Chart – last 2355.54, Friday 07-Apr-17

US Stock Market Report

S&P / ASX 200 Chart - 1 Week Candlestick Chart   S&P 500 Stock Index - 1 Month Candlestick Chart

Important Points to Note from the Monthly Chart:

  • The monthly trend is currently Up. We have a higher top and a higher bottom in place.
  • March formed an Up month (a month with a higher high and a higher low than the month before) closing below which is the first up month since September 2014 to do so indicating buyers are losing their grip.
  • It is still below the uptrend line from the February 2016 bottom which has acted as resistance since October 2016.  
  • We reached 2400.98 which is a new all-time high on March 1st which is 317.2 points or 15.2% up from the last monthly bottom made back on November 4th.
  • This 2400.98 top is a gain of 590.88 points or 32.6% from the February 11th, 2016 bottom which is a little over 12 months.
  • This 2400.98 top is spot on the 2401 100% extension of the May 2015 move down into the August 2015 bottom.
  • This 2400.98 top is 266.26 points or 12.5% above the previous all-time high of 2134.72 made on 20th May 2015.
  • This 2400.98 top is 1,734.19 points or 260.0% above the 6th March 2009 bottom of the GFC which is a touch more than the Bull market run of 1994 – 2000 which saw a gain of 256.3%.
  • There are a number of things pointing to this Bull market entering into dangerous times and could be due or even overdue for a larger correction. It’s time to be careful and tighten your stops.

Dow Jones 30 (DJIA) Monthly Chart – last 20,656.10, Friday 07-Apr-17

Dow Jones Chart

S&P / ASX 200 Chart - 1 Week Candlestick Chart   DJI (WI) - 1 Month Candlestick Chart

Important Points to Note from the Monthly Chart:

  • The monthly trend is currently Up. We have a higher top and a higher bottom in place.
  • March formed an Up month (a month with a higher high and a higher low than the month before) closing below the open which is the first up month since March 2015 to do so indicating buyers are losing their grip.
  • We reached 21,169.11 which is a new all-time high on March 1st and this is 3,285.55 points or 18.4% up from the last monthly bottom made back on November 4th.
  • This 21,169.11 top is a gain of 5,718.55 points or 37.0% from the January 20th, 2016 bottom that was the low of 2016.
  • We are a little shy of the top of the uptrend channel that we have been inside from the March, 2009 bottom and this should act as resistance.
  • This 21,169.11 top is 2,500.67 points or 13.4% above the previous all-time high of 18,668.44 made on 15th August 2016.
  • This 21,169.11 top is 14,699.16 points or 227.2% above the 6th March 2009 bottom of the GFC which is a touch less than the Bull market run of 1994 – 2000 which saw a gain of 230.8%.
  • The 16th March, 2017 will be 2,932 days from the 6th March, 2009 bottom. This is the time it took from the 24th August, 1921 bottom to reach the 3rd September, 1929 top or the Bull market of the roaring 20’s which brought in the 1929 Crash that started the Great Depression. Keep a very close eye on this especially with how we have been performing of late.
  • You can see there are a number of things including both time and price pointing to this Bull market entering into dangerous times and could be due or even overdue for a larger correction. It’s time to be careful and tighten your stops. 

Upcoming Dates of Note

Upcoming Dates of Note 10 apr 17

Stock Market Report

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This publication has been prepared solely for the information of the particular person to whom it was supplied by Phillip Capital Limited (“PhillipCapital”) AFSL 246827. This publication contains general financial product advice. In preparing the advice, PhillipCapital has not taken into account the investment objectives, financial situation and particular needs of any particular person. Before making an investment decision on the basis of this advice, you need to consider, with or without the assistance of an adviser, whether the advice in this publication is appropriate in light of your particular investment needs, objectives and financial situation. PhillipCapital and its associates within the meaning of the Corporations Act may hold securities in the companies referred to in this publication. PhillipCapital believes that the advice and information herein is accurate and reliable, but no warranties of accuracy, reliability or completeness are given (except insofar as liability under any statute cannot be excluded). No responsibility for any errors or omissions or any negligence is accepted by PhillipCapital or any of its directors, employees or agents. This publication must not to be distributed to retail investors outside of Australia.  

About Shane Langham

+61 (7) 3338 3838 Email Profile

Shane has passionately followed the markets since the age of 16, and has been an adviser in the financial markets since the year 2000 having worked for a range of firms, including one of the world’s largest investment banks as well as smaller boutique broking firms. Shane is also a past Vice President of the Australian Technical Analysts Association (ATAA) Brisbane, a position he held for 6 years.

Shane is currently a Senior Private Wealth Adviser at Phillip Capital and can assist you with all of your stock market needs - whether you are looking to buy or sell shares, set up a portfolio, grow your SMSF, protect your portfolio, or trade the market. He specialises in technical analysis, risk management, and options trading and focuses predominantly on the Aussie markets.

Shane also writes two key market related technical analysis reports (including a free weekly Market Commentary Report), designed to give traders and investors the best chance possible to get the results they are after from the markets. To find out more about these reports please click here. http://www.phillipcapital.com.au/shane-langham

Shane lives on the sunny Gold Coast with his wife and two dogs. He loves chatting about the market with other like-minded people, so don’t be afraid to pick up the phone or send him an email.

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