Confidence in the All Ordinaries [ASX:XAO] looks to be dwindling. Last week the XAO edged down further, closing at 6,057 points.
Looming large is the September deadline for the lowering of JobKeeper and JobSeeker payments. Combined with high unemployment, the dour economic sentiment may be impacting the All Ords.
ASX outlook for the week ahead
I believe in the coming week the XAO will finish lower again. Last week the XAO opened low, moved up throughout the week, before returning to close just above where it opened — a potential bearish signal.
The level of 6,000 points historically looked to be psychologically important and it could prove difficult to press through.
Should the price fall through this level and close below it this week, it would be yet another bearish signal and more indication that the market is weakening.
A closer Look at the ASX
There wasn’t a lot to get excited about this past week, with most stocks either falling away or moving sideways as the large gains found since the March market low disappear.
Woolworths Group Ltd [ASX:WOW] fell away 1.80%, along with Sigma Healthcare Ltd [ASX:SIG] declining 9.37%.
With QBE insurance Group Ltd [ASX:QBE] also falling away 4.39%.
Moving into the sectors, there were only marginal gains to the upside for anything this last week, with Materials gaining 1.05%.
Financials fell away 1.78% as did Real Estate and Industrials, falling away 0.90% and 1.74% respectively.
A broader look at the ASX All Ordinaries
It might be wise to de-risk in this environment.
The Australian economy is fragile to say the very least, and now a Deloitte report is estimating the cuts to JobKeeper and JobSeeker payments could cost Australia $31 billion.
With the country already in a deep recession, these changes are going to hurt.
In the US, famed trader Larry Williams is saying the market sell-off has already begun.
Our market tends to track the movements of the US market.
With the changes coming to support payments and a large sell-off predicted in the US, we may just be on the edge of a market fall.
The upside to this is when the dust has settled, those that have been careful with their capital will be able to go into the All Ords and potentially pick up some bargains.
Gravity is the key word here.
For Money Morning
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