Stock Technical Analysis – Australian and US Market Report 02 Oct 2017

Australian and US Stock Market Analysis - 02 October 2017

Over the last week we have seen the European and US markets move higher whereas the Asian markets were weaker and surprise, surprise the Aussie market was flat like it has been for almost the last 5 months. We are up only 15.8 points or 0.2% since the start of the year. So for the last 9 months we have gone nowhere and you can see this in the first chart in the Appendix.

The S&P 500 and the NASDAQ both made new all-time highs on Friday which also just happens to be the end of the September quarter. The NASDAQ doesn’t record volume but the S&P 500 does and the volume on the back of this breakout high (Friday) was equally the lowest of the week. This is not what you want to see as it is indicating that what we got on Friday was a false break high which will more than likely reverse early next week. I have also been watching 2514 and 2517 as target levels for the S&P 500 where it could find resistance and we only marginally closed above these levels (2519) at the end of the week. The Dow Jones failed to make a new high and if it turns down from here it could be forming a small Double Top reversal pattern.

Welcome to October one of the most dangerous months of the year. Looking at the Dow Jones it holds the record of 10 of the 20 largest percentage single day moves down over the last 117 years. These include 12.8% on 28th Oct 1929, 11.7% on 29th Oct 1929, 22.6% on 19th Oct 1987, 8.0% on 26th Oct 1987, & 7.2% on 27th Oct 1997.

October will be 30 years from the 1987 Crash, 20 years from the 1997 mini crash and 10 years from the 2007 GFC top (11th Oct US markets / 1st Nov Aussie market). Can you see the cycles lining up for October 2017?

Remember: “Everyone knows that the market is going to correct but nobody wants to believe it’s actually going to happen”.

Enjoy if you have a holiday on Monday but the markets will be open and trading as normal. Also keep in mind that daylight savings has started as of today so the market will be open 9.00am – 3.10pm Queensland time.

Share Market Technical Analysis

Australian Stock Market (XJO) 

Australian Stock Market Analysis (XJO) Monthly Chart – last 5681.6, Friday 29-Sep-17

australian stock market analysis 02 oct 17

Important Points to Note from the Monthly, Weekly & Daily Chart:

  • The Monthly trend is currently Undecided. We have a lower top and higher bottom in place.
  • September formed a down month (a month with a lower high and a lower low than the month before) closing below the open and indicating the sellers were beginning to overpower the buyers by the end of the month. The Uptrend is no longer inforce as the trend is now Undecided and a move below 5629.8 will swing the monthly trend Down.
  • The Weekly trend is currently Down. We have a lower top and lower bottom in place.
  • Last week formed an Inside week (a week with a lower high and a higher low than the week before) closing back at the open forming a Doji (Japanese candlestick which is a sign of indecision) indicating the buyers and sellers were evenly matched by the end of the week. 
  • The Daily trend is currently Undecided. We have a lower top and higher bottom in place.
  • Friday formed an Outside day (a day with a higher high and a lower low than the day before) closing above the open and down a little from the high.
  • The buyers were in control after an initial selloff in the morning but as it was the end of the quarter the buyers pushed the market up with the typical window dressing that normally takes place into the end of the day.
  • Thursday confirmed Wednesday as a higher bottom and if we trade above 5688.5 on Monday we will have swung up into an uptrend on the daily chart thanks to Fridays Outside day. We are still at the bottom of the sideways trading range and can bounce however these bounces are becoming fewer and weaker over recent weeks.

US Markets (S&P 500 & DJIA)

US Stock Market Analysis (S&P 500) Monthly Chart – last 2519.36, Friday 29-Sep-17

US Stock Market Analysis 02 oct 17 

Important Points to Note from the Monthly, Weekly & Daily Chart:

  • The Monthly trend is currently Up. We have a higher top and a higher bottom in place.
  • September formed an Up month (a month with a higher high and a higher low than the month before) closing above the open and at the high indicating the buyers continued to hold the upper hand.  
  • The Weekly trend is currently Up. We have a higher top and a higher bottom in place.
  • Last week formed an Outside week (a week with a higher high and a lower low than the week before) closing above the open at the high indicating the buyers had regained control by the close.
  • The Daily trend is currently Undecided. We have a higher top and a lower bottom in place.
  • Friday formed an Up day (a day with a higher high and a higher low than the day before) closing above the open and at the high indicating buyers were in control all day.
  • The S&P 500 made a new all-time high of 2519.44 (29th September, 2017) which is 28.57 points or 1.1% above the August 8th top 2490.87 or 118.46 points or 4.9% higher than the March 1st top 2400.98.
  • 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 2485, 2514, 2517, 2544 & 2717.
  • The daily trend is Undecided, the weekly trend is Up and the monthly trend is Up.  

 

Upcoming Dates of Note.

Upcoming Dates of Note 02 oct 17

 

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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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