johnaus - garden variety correction wednesday, page-27

here's a view that sits on the fence between the bulls and bears....we are being bombarded with conflicting fundamentals. The US and EU are on the precipice and could drag us into any global melt down...on the other hand Australia is well placed. our debt to GDP is amongst the best in the world, our banks are sound and well run, despite our largely european heritage we are part of the Asian power house and last but not least we continue to ride the minerals boom....

The XJO has been travelling in a sideways channel for the last 2 years. Perhaps we will continue that sideways meandering but maybe what has just happened is that the market has removed some premium due to global debt issues and has dropped us to the channel immediately below. As you can see by the chart below the channel lines are very distinct lines of support and resistance. Just a thought and something to watch.