monday update

The ASX200 bounced off support at 4530 and recovered in haste, only to find tough resistance at 4800. Falling volume on the rise suggests that the bulls are running out of steam. A descending head and shoulders pattern has formed and warns of downward pressure with the possibility of a secondary correction, or at best a consolidation between the two bands 4530 and 4800. A break above 4900 seems unlikely. Momentum indicators are weak, unable to break the continuation of the bearish divergence. A break below 4500 would confirm a secondary correction.
•The S&P500 faces unrelenting resistance at 1100, failing to break this level in the last four intraday attempts. Like the ASX200, trading volume on the upside has fallen, suggesting that buyers are reluctant to drive the market higher. A break below 1080 would confirm the bearish indicators.
•Spot gold is trading between US$1100 and US$1120 resistance. We expect gold to consolidate in the near term and find short term support at US$1070. Penetration below the rising trendline at US$1050 seems unlikely but would warn of a trend change. The long term target is US$1200. Note the strong negative correlation between gold and the USD index which is testing solid support at 75.
•Meanwhile, the AUD is hesitating to penetrate previous resistance at 93.5 US cents. A break above this level would lead to a target of 0.95 USD. There is short term support at 91.5 US cents; a fall below 0.89 USD is unlikely.