Dog Biscuit Thursday

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Good Morning and Welcome to the XJO Thursday Thread
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News for Today (AEDST)




The XJO closed higher on Wednesday, where spread was again narrow, and volume was again quite high.
These narrow spread high volume bars usually mean something and should be noted.....back in the days of hand drawn charts, Tom Williams said when something of interest needed to be noted he would stick a wad of peanut butter or chewing gum under the bar or volume, so it would not be forgotten.  We have had a series of these narrow spread bars now, and most have above average volume, so something quite powerful will most likely happen soon.........one way or the other........
I still sit in the bullish camp....until something serious happens to change that view, and so for me, I consider this recent price action to be absorption.  And generally, bullish absorption (where the buyers are absorbing the supply coming in from the sellers) occurs in an uptrend, with strength in the recent background offering a positive influence, and often sees price fail to breakdown when the opportunity presents.  Also a tight clustering of closes, narrow spreads on decent volume, and a pressing nature towards the upside, are all hallmarks of potentially bullish absorption.
So given continuing strength in overseas markets, I expect the XJO will at some time accelerate higher, with some real intent.
However that said, the longer it takes, the more vulnerable price is to a change in market sentiment, and if these recently opened position during the absorption process need to be dumped for some reason, a very widespread breakdown bar is usually the result, causing some serious technical damage to the chart.






Good Trading and Investing