Grenache Friday, page-2

Thursday Evening Liqueurs. 15 September, 2016.

XJO up today +0.23%. That's a modest, positive result, but important. As expected, our market was down in the morning session as a result of the weak performance in America last night. But the afternoon session, although not spectacular, was solidly on the upside.

Australia often pre-empts the America market (although you'd never think that listening to the TV Talking Heads). So we can expect a good night in America. And so, we can now expect a virtuous feed-back loop.

Here's the chart for STW, tracking ETF for the XJO:



STW is stalling at the up-sloping oblique support line. That's just above the all important 200-Day MA. The current strength of the upside move is weak, so it is not particularly convincing.

Overhead is the gap from 12 September. Gaps tend to get filled, not necessarily immediately.

If we do get a further upside move (likely) then the top of the gap might offer stiff resistance.
Given that the market is oversold, and could be in a virtuous cycle, then it seems likely that the gap will be filled. And that would be a likely spot for a further fall in the index.

The relationship of the long term Stochastic and the short term Stochastic (upper panel below the stock chart) suggests we'll see a rise and then a pull-back.

Nimble traders can make hay while these conditions exist.

Others will stand aside.

RB.