jgunters - volatility withdrawal - thursday, page-66

In Australia:

XJO -0.2%
Twenty Leaders -0.2%
50 Leaders -0.3%
Financials +0.0%
Materials -0.7%
Small Ordinaries +0.3%

Comment: One of those days. Looking at the final figures – looks boring. But the market was down about 1%, then a little after 12.30, a V-shaped recovery occurred. Strange timing – just after most big traders have gone to lunch – whammo, launch a counter-attack. Smells, uh? Normally, a day like this early in a trend I’d think was bullish. Now, so late in the trend – one has to be suspicious.

Technical Comment on the ASX200:

The XJO finished at 4282.9. Sitting above the 15-Day MA and at the 150-Day Moving Average.
Indicators:
Stochastic: 69. Possible strong negative divergence set up.
RSI.9 is at 60.7. Back below its signal line. Possible strong negative divergence set up.
MACD Histogram. Marginally below Zero. Neutral.
MACD. Above Zero. Positive.
CCI.14: +37. Possible strong negative divergence set up.

Most indicators are setting up potential negative divergences from price.
The chart is now above the 15-Day Moving Average but remains below the nearby high of 27 January. It is also below the big blue resistance line clearly marked on the chart. This may be a consolidation. A break above that blue resistance line would be positive.

I’m suspicious of today’s action – the timing of the reversal was odd. I’m still fence sitting – let’s see how tomorrow goes.

In the meantime, the medium term trend is up and the short term trend is undecided.

The market still needs to get above that big blue resistance line to prove its long term bullish credentials. Maybe that will happen tomorrow. Let’s see. A big down day on higher volume would be bearish.

Redbacka