XJO down -0.7%, on higher volume. Volume is still not reaching...

XJO down -0.7%, on higher volume. Volume is still not reaching washout levels. Today’s volume was 111.3% of the 20-Day Average Volume.

Here’s the XJO chart:



We’ve obviously fallen heavily in eleven days, down -4.44%. We’ve been down five of the past five days, and ten of the past eleven days. RSI.9 is now at 17.9. Below 20 usually ensures a strong rebound in the next couple of days or so. In December, 2013 the RSI.9 got down to 14.6 before rebounding. It was down to 17.4 the day before the bottom was reached. That’s about the same level we’ve reached today.

That doesn’t mean we have one more day to go. But it does suggest that people buying now have probabilities to the upside in the next few days or so.

Of course, extremely oversold could become extremely oversold. And then ………………… Well, we could be in deep doo doo.



(You can buy the above T-shirt at http://www.zazzle.com.au/deep_doo_doo_in_black_t_shirts-235842705185262131. And – NOOOOOOO – I don’t get a kick-back. This is just for laughs.)

Below is a weekly chart for the Financials x-Property:



The XXJ has the highest weight of any industry sector in our market. At around 40% of the XJO it outbalances any other industry sector – by a long way. What happens to it usually decides what happens to the XJO.

Today on the daily chart XJO clearly broke below support. But looking at the Weekly Chart with a Standard Error Channel, we can see that it is now back down to a “buy” level.

Now – all trends must end. This up trend has been in place since late-2011. Any time the XXJ has got down to the lower edge of the Standard Error Channel it has bounced. The probabilities now lie to the upside.

What happens after this bounce is crucial. If the Index pushes up and then pushes back down through horizontal support – well – you might consider buying the T-Shirt above.


Redbacka