"As far as sectors are concerned, I’m looking at contrarian...

"As far as sectors are concerned, I’m looking at contrarian positions. The strongest sectors are Materials and Energy. They both looked primed for a move to the downside."

Contrarian positions at the right time are the best for sure, I see a few newbs talking about oil juniors lately, and if they haven't moved already last 12-18 months, they are usually dogs imo. (too late) time to invest was at $30 when many of us backed the rebound. Investing at above $70 US once this has been realised is late comers folly imo. Market chasers. 

Look at our discussion here couple years ago with ECG - East Coast Gas @mouse

and now look at a few suggestions then,, COI, GLL, and COE - 5-15 baggers

Personally, I am really getting the feeling junior Gold is about to turn 2019, and will be a great place to focus your $ next 12-18 months.

AUD + unloved sector = outperformance.

A bunch is leveraged producers on lows (RSG etc low $1) + a few explorers like imo CHN (15c), OKU (26c) etc thrown into mix, and even a few old totally hated dogs like FML and WCN etc for good measure

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The bearish rising wedge broke downwards on Monday and continued on Tuesday. Wednesday-Friday saw a counter-trend move. The Index remains below the “cloud” which is bearish territory. The long-term Stochastic (50.10.10) remains bearish.

The chart remains above the 200-Day EMA, which is a positive.

Until we get some bullish signals, it’s best to remain cautious. Wait.

XJO Weekly:



XJO had a small fall this week -0.35%. The long-term trend remains up.

Indicators are on “sell” signals. Wait.

XJO Monthly:



XJO is into the first week of October. It is too early to make any definitive conclusions on the basis of this chart.

Both the long-term Stochastic (50.10.10) and the short-term Stochastic (14.3.3) are in the don-not-buy zone above 80.

INTERNALS – AUSTRALIAN MARKET.

XJO was down a little this week and internals are weakening. The number of stocks in the ASX100 that are above their 200-Day MA fell from 57% the previous week to 53% this week. That’s getting close to a bearish condition

Percent of ASX100 Stocks positive on the Directional Movement Index fell from 51.5% to 39.4%. That’s a bearish reading. The % of ASX Stocks above their 50-Day EMA fell from 41.4% to 35.4%. That remains bearish for stocks.



We can see from this chart that the market is down to a zone where bounces have occurred in the past. Indicators can go lower, however, as we saw in February, 2018. If we see the shorter term indicators (% of stocks +ve on DMX and % of stocks above 50-DEMA) get down below 20 – then bounce – we’ll have a buy signal.

Four out of 11 Sectors were up this week, but the most important sector (XXJ) was down -1.43%. XXJ includes the four big banks. The best two sectors were the export-oriented resource sectors, XMJ +1.9% and Energy +1.96%. The worst two sectors were XDJ -2.21% and XPJ -1.84%. Both of those sectors are focussed on the domestic economy.

Copper Futures:



Copper is in a sideways consolidation above the old double bottom. Such action usually implies a break to the upside. The short-term Stochastic (14.3.3) has broken below the long-term Stochastic (50.10.10) – that’s a bearish signal. Wait.

SECTOR CHARTS

XMJ:



XMJ has been in a strong bullish rally. Short-term Stochastic (14.3.3) is at 97.26 in the “Do Not Buy” zone above 80. Long-term Stochastic continues to rise. Wait for a pull-back and then bounce to look for buying opportunities.

The four strongest stocks are S32, NST, AWC and IPL.

XEJ:



XEJ is in a similar case to XMJ. It has had a strong bullish rally Short-term Stochastic (14.3.3) is in the “Do Not Buy” Zone. The long-term Stochastic (50.10.10) is also in the “Do Not Buy” Zone. A break by the short-term stochastic below the long-term Stochastic could be a sell signal.

The strongest stocks are Santos, Woodside and Whitehaven Coal.

XIJ:



XIJ has had trouble breaking above horizontal resistance. Stochastics and Dynamic Zone RSI are on sell signals. Wait and see how this plays out.

XXJ:



This is a very bearish chart. As a general principle leave the Financials alone.

XXJ has nineteen stocks in the large-cap ASX100. Only three of those are out-performing the XJO: QBE, MFG and MQG. QBE and MFG are by far the best performers.

XUJ:



XUJ (Utilities) has rallied nicely since its low in mid-September. It remains below the “cloud” so this could be a counter-trend rally. Be cautious about buying anything in this sector.

The two strongest stocks are APA and Ausnet.

XDJ



XDJ has been in a pull-back since the end of August. It now is finding support at the 200-Day EMA. If it has a significant bounce here it could be OK. Indicators are at a level suggesting a contrarian position could be worth thinking about. Watch.

XHJ:



XHJ has been in pull-back mode since early-September. It had over-shot the Standard Error Channel, and, as often happens in these cases, the ensuing correction over-shot on the downside.

Indicators are now suggesting that taking a contrarian position might work out well. Watch.

Strongest stocks are RMD and RHC.

XNJ:



Like some other sectors XNJ has been in pull-back mode since the end of August. Both Stochastics are now in the Buy zone. Watch for a break to the upside in those indicators for a contrarian play.

Strongest stocks are Brambles and CIMIC.

XSJ.


XSJ has been in a pull-back since mid-August. It is now consolidating at horizontal support.
Theory suggests this should break lower.

Indicators are now giving short-term buy signals so we could get a counter-trend rally if the index bounces here. Wesfarmers received a favourable court finding on Friday clearing another hurdle in its efforts to spin off Coles as a separate entity. That could be a catalyst for upside movement in the index.

XTJ:



In August, XTJ had a spectacular rise which broke the bear market which had held it since early-2015.
Since August, XTJ has been consolidating in bullish territory above the 200-Day EMA and the “cloud”.
Indicators are on short-term buy signals.

XTJ consists of only two large-cap stocks, Telstra and TPG. TPG is preferred, but Telstra is worth a look.

XPJ:



XPJ has been in pull-back mode since mid-September when to failed at horizontal resistance.
It has now come back to dual support: horizontal and the 200-Day EMA.

Friday’s candle was a “hanging-man” which often comes at the end of a trend. Coming at dual support adds more significance.

We could see a bounce here. If we get that, it should provide at least a short-term bullish trade.

Strongest stocks are IOF, CQR and GMG. IOF is under the influence of a take-over offer – leave that to the professionals."As far as sectors are concerned, I’m looking at contrarian positions. The strongest sectors are Materials and Energy. They both looked primed for a move to the downside."

Contrarian positions at the right time are the best for sure, I see a few newbs talking about oil juniors lately, and if they haven't moved already last 12-18 months, they are usually dogs imo. (too late) time to invest was at $30 when many of us backed the rebound. Investing at above $70 US once this has been realised is late comers folly imo. Market chasers. 

Look at our discussion here couple years ago with ECG - East Coast Gas @mouse

and now look at a few suggestions then,, COI, GLL, and COE - 5-15 baggers

Personally, I am really getting the feeling junior Gold is about to turn 2019, and will be a great place to focus your $ next 12-18 months.

AUD + unloved sector = outperformance.

A bunch of leveraged producers on lows (RSG etc low $1) + a few explorers like imo CHN (15c), OKU (26c) etc thrown into mix, and even a few old totally hated dogs like FML and WCN etc for good measure

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