fridee stuff, page-61

Thought I'd post a chart which you can refer to in reference to my comments below.

Now firstly, I'm uncertain whether this is a 2nd shoulder reverse H&S forming which we will rally from or we are heading for a collapse of over 1000 points from here. I see some positive indicators but I also see some negative indicators.

The biggest negative is IMO the recent XAO/XJO rally failed to reach the top of its channel (at the 50 fib retrace from the August high). Instead it only got part way across the channel to the 38.2 fib. This makes me very cautious until I see confirmation of a rally - as the downside risk is considerable. The significance of this is a little uncertain as this is not consistent across all the indices. Some other indices also failed to reach the 50 fib (eg Nikkei), but there were some which did make the 50 fib (eg FTSE).

Also, at XAO 3940 we are IMO just below the midpoint of this large channel. We need to rally back into the top part of the channel at 4000 and above ASAP. We look oversold in the short term so its possible we might do this Monday.

Anyway, IMO this is a critical level we probably must hold if we are to rally on up to 4400 and beyond. I think if we fail to hold here we have a high risk of a 3rd retest of the bottom of the large channel we have been travelling in since the May top. This is now at about 3600. As this would be a 3rd retest this would mean a high risk of a break with IMO downside of 3200 or probably 2800. (refer chart below).

Again, I'm not saying we will necessarily fail to hold here. And we may even rally Monday and still be at risk of a fall. I'm just saying that I am very cautious at this time until I see confirmation of a fall or rally from here.

Just my thoughts.