Really Fat Pizza, page-829

The XJO saw some downside follow through today as it closed lower again.
The Index closed below both the recent breakout line, and below last Thursdays low, and now threatens to breakdown.
The market attempted to draw out enough support to hold on at the breakout line for almost three hours from lunchtime, but eventually price broke through and was unable to recover the breakout line by the close of trade.
If the Index is going to recover - price needs to quickly move back above this level or it will face increased resistance.
This increased resistance (selling pressure) will build up really fast.
I drew a (rough) wave over the the recent price action, where it clearly show the difficulties the market had at the ~5300 level, as price attempted to 'absorb' its way through.   It also shows the last (still incomplete) downwave as having increased length and duration over the most recent up wave (particularly if tomorrow sees another lower close), this is often a reliable indication that a market is beginning to, or attempting to, change trend.
Any kind of reasonable down bar tomorrow will probably confirm today's break.
This leaves to market in a vulnerable position.  Nothing is confirmed yet, however the chance price will turn and come back to re-test the strength of the recent lows now increases considerably.


cheers

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