Technicals | Jul 31 2017
By Craig Parker, asset manager, Moat Capital
Nothing to see here again. Well we tried, with our market peeking above the 60-day moving average again, 3 times now and each time a quick retreat. Starting to look like the warped wall on Ninja Warrior – the more attempts the more tired and less likely to succeed. Not sure I should be admitting to watching that show. Moving on and back to the technical analysis. I get the feeling by looking at the volatility index that the break that is going to be sustained could be to the downside and below the 200-day moving average. You can see the volatility index has moved into a nice short-term uptrend on the weekly chart.
Hopefully any downward movement would only be minor and around the 5500 level before starting a recovery and recommencement of the overall uptrend that begun in the first half of 2016 or 2009, if taking a longer-term view with the monthly chart. Gold has also shot up over the past weeks which isn’t great news for equity markets and will be interesting to see how it reacts around the 1295/1300 barrier. More turmoil in the US political arena and the North Korean issue will only help this sector. Our financials sector on the daily is still holding onto a short-term uptrend however if it breaks below the short-term uptrend line then a lower peak on the weekly chart would confirm a medium-term downtrend and possible further stress to the downside for our overall market, considering the financial sector weighting. On a brighter note the communications sector seems to be trying to find a bottom. Even with promising earnings reports in the US market uncertainty still reigns on our side of the Pacific.
ASX200 daily
ASX200 monthly
ASX200 Financials ex-REITs daily
Gold weekly
ASX200 VIX weekly
Authorised Representative Sentinel Private Wealth AFSL 344762
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