paddington's roaring out of the bottom friday, page-6

Bit late with the Thursday Report - I had a birthday function to attend.

In Australia:

Twenty Leaders +1.5%
50 Leaders +1.4%
XJO +1.3%
Small Ordinaries +0.7%
Financials +1.7%
Materials +1.1%
Comment: A very strong day on higher volume (110% of the 20-Day Average.) Breadth was relatively poor – with sector structure clearly favour the big blues over the small caps. Not a good sign.
Technical Comment on the ASX200:
The XJO finished at 4108.6. Support/resistance: 3985/4120.
Indicators:
Stochastic: 53.4. Above its signal line and below 20. Positive.
RSI: 50.8. Neutral.
MACD Historgram. Above zero. Positive.
MACD: Below zero. Negative.
CCI: +90.5. Positive.

Today the index went up to its first crucial test – horizontal resistance and resistance of the 20-Day EMA. Today’s breadth was not conducive of a strong rally – so we can expect a pause tomorrow, at worst a big retreat. I’m favouring a pause tomorrow – but let’s wait and see how it turns out. If we get a big retreat tomorrow, then the bears are back in control. Of course, I could be completely wrong - so if tomorrow is a big up day on even better volume - then we could be seeing the start of a very long bull rally. I'll believe it when I see it.

Medium term trend remains down. Short term trend (5-Day EMA) – up.

Redbacka