Stock Market Report – Australian and US market 16 Jan 2017

Welcome to 2017. It’s been almost a month since the last stock market report and what has changed? Previously we were in the middle of what the media have coined the Trump Bump. The rally the markets have been enjoying since Donald Trump was elected president of the US. It is the end of this week coming (Friday 20th) where he will be sworn in and actually become the President as compared to his current station on President Elect. There has been a lot of talk that this is when this Trump Bump rally will end. Time will tell in that respect. For more on this please refer to this week’s Stock Market Report looking at the Australian and US markets.

Let’s have a look at how markets have changed since the last report to get a better idea of what’s been going on over Christmas & New Year. 

Stock Market Report Australian and US markets 16 Jan 2017

I think it pretty easy to see that the local Aussie market has been leading the way higher as its gained 3.4% but as much as 5.3% over this time whereas the US markets have only gained a best of 0.7% or 1.1% over the same time. In other words we have gained about 5 times as much as the US markets have over this time. Given this when we look at how far we have fallen from the high over this time the Aussie market has fallen less than double what the US markets have even with the previous out performance to the upside. This has been a sign of strength which you will be easily able to see in the charts below. 

Aussie Market (XJO) Weekly Chart – last 5721.1, Friday 13-Jan-17

Stock Market Report 2017

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

Important Points to Note from the Weekly Chart:

  • The weekly trend is currently Up. We have a higher top and a higher bottom in place.
  • The last week formed an Up week (a week with a higher high and a higher low than the week before) but it closed below the open indicating the sellers had the upper hand.
  • We reached 5827.5 which is 216.3 points or 3.9% above 5611.2 August top.
  • Since the last report we have also reached 5741 the first Inverse Head and Shoulders target.  That still leaves the 6137 target from the larger Inverse Head and Shoulders.
  • Breaking above 5611.2 confirmed a larger Double Bottom reversal pattern (July 5051.0 & November 5052.1) which has a target of 6171.
  • There are 2 trend lines which have crossed where this week’s 5827.5 top has come in acting as resistance.
  • We are 10 weeks since a down week and we have gained 775.4 points or 15.4% over this time. The long term average gain over 12 months is 7.15% – 7.41% depending upon financial or calendar year. Since 2000 the average gain has been only 4.62% - 4.86% roughly 65% of the long term gain. This shows just how far the XJO has gotten in front of itself over the last 2.5 months being more than double the long term average.

US Markets (S&P 500 & DJIA)

US Markets (S&P 500) Weekly Chart – last 2274.64, Friday 13-Jan-17

Stock market report US Markets SP 500 DJIA

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

Important Points to Note from the Weekly Chart:

  • The weekly trend is currently Up. We have a higher top and a higher bottom in place.
  • The last week formed an Inside week (a week with a lower high and a higher low than the week before) and it closed pretty much where it opened indicating indecision as this is a Doji candle.
  • We reached 2282.10 a new all-time high which is 88.29 points or 4.0% above 2193.81 August top.
  • We are only 3 points above the 2279 level that I calculated for the S&P 500 to find resistance at. We reached 2277 a month ago and we have only managed to push higher by 5 points over this time clearly showing this area as the resistance I was expecting.
  • The last 3 weeks is holding above the uptrend line from the February 2016 bottom acting as support.
  • I have come up with the following levels from different methods that will be important to watch for resistance as we move higher into Blue Sky 2267, 2279, 2286, 2293, 2305, 2318, 2334 & 2401.
  • We are 10 weeks since a down week and we have gained 198.31 points or 9.5% over this time. The long term average gain over 12 months is 7.31%. Since 2000 the average gain has been only 4.11% roughly 56% of the long term gain. This shows just how far the S&P 500 has gotten in front of itself over the last 2.5 months being more than 30% above the long term average.

Shane Langham has recently been quoted in Morning Star. Get this full complimentary stock market report from Shane. 

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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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