The local market put in some great gains on Wednesday closing up over two percent on the back of some positive sounding tweets from Mr Trump on the Middle East situation. The US market loved it with the Dow Jones up 2.5pc and Nasdaq up over 3pc. Today there is not much follow through action with the local index closing in on the 50pc midpoint of the range down at the start of the day. At the time of writing the local market is down over one percent after a positive start.
This weekly chart of the US based Dow Jones Index shows the progressive nature of the current longer-term uptrend with retracements currently being limited to previous highs coming in as support. How long that will last is unknown.
This monthly chart of US silver miners shows a bounce off the breakout level which coincides with the 38 per cent retracement level of the range up. Perhaps a sign of strength if it holds.
Duratec just posted a fresh high. Even during market downturns a few stocks will be heading up.
A monthly chart of New Hope Coal showing some good rallies after periods of sideways consolidation in the past and some consolidation breaks that failed.
Lithium mob PLS Group is close to an area of previous price rejections.
The chart of Xero looks interesting. The company recently did some kind of deal with Anthropic to help in using AI.
Only just recently the US S@P 500 index closed below the 50 week moving average for the first time since March 2025. Sometimes this leads to a quick rebound and other times it sounds a warning of lower prices ahead.
This a recent chart showing the incursions below the 50 week moving average since 2019.
The two big dips in the 2000’s.
This chart from Vanguard shows the value of $10,000 invested in the Australian market compounded over the period 1st January 1999 to the 31st May 2013 with dividends reinvested. The Australian market with its higher dividends came out well in front of non-hedged US shares over that time period.
The lost sixties and seventies were followed by the big rally of the 1980’s and the sluggish noughties were followed by the tech boom. After the boom comes the bust and there is no crystal ball to say when that might be. The current middle east war and oil supply situation could be the start of troubled times ahead, or not. Chart from All Star Charts.
The lost years of the 2000’s shown in a different format.
Australian shares are not immune from spending years going sideways, even the mighty Commonwealth Bank.
The choppiness of the 1970’s was a period with oil supply dramas.
A worrying aspect of current market conditions is the high level of margin debt in the US.
Market concentration can also be seen as another overall risk factor. Chart from a Cycles pack.
After the pain can come the gain. This table shows the declines to the US mid-term year low (2026 is a mid-term year) for the US S@P 500 index and the rise over the next 12 months from that low.
This chart is of the most recent mid-term low in 2022 and subsequent rise. The lows can come anytime during the year and as luck would have it the 2022 low came close to the lower trend line. The big unknown is how will 2026 play out from here, will the drop reach the midline, drop to the bottom of the channel or something in between? The full impact of the disruption to oil supplies and the global geopolitical changes will continue to reverberate for some time to come.
The last five trends up from the mid-term lows.
The return of Australian shares in any given year can be quite volatile with the 20 year rolling return much smoother and has declined a little over the past two decades. Chart from Firstlinks and AMP.
Disclaimer: The commentary on different charts is for general information purposes only and is not an invitation to trade. Trading is risky and individuals should seek Professional counsel before making any financial decisions. Many thanks to Incredible Charts.com software for most of the charts used in the column. Cheers Charlie.
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