redback report. 18/6/2010, page-4

The above XAO chart is closing time yesterday. You'll notice that the chart hit the 50-Day SMA yesterday and reversed. Some of the "old stuff" still works.

The XAO is currently in an upward sloping regression channel. Until the lower trend line is broken to the down-side, the short-term trend remains UP.

In yesterday's blog (http://redbackmarketreport.blogspot.com), I mentioned I thought the market was due for some consolidation. At this stage, today's reversal is just that - part of a consolidation process.

If this was to be a serious reversal, I'd expect the Gold ETF to be acting better than it is. Today it broke an important support level and seems likely to head lower. The Gold ETF tends to move inversely to the XAO. It's not one for one. Nothing is in the stock market. But it is a reasonable inverse confirmation tool.

So. We have XAO remaining in an uptrending channel. Gold ETF breaking down from recent highs. No confirmation by Gold so far of a trend reversal on the XAO. In fact - the exact opposite.

Today's action was significant. But until further evidence comes in - I think the trend is still up. (Unless you're in the Gold ETF - which looks suspect.)

Cheers
Red