The XJO closed roughly flat for the second consecutive day....

The XJO closed roughly flat for the second consecutive day.
Price initially pushed higher from the open today, partly in sympathy with gains on overseas markets, and also in response to Wednesdays quite positive trading - this went some way towards confirming the absorption (demand) that was on display yesterday.
And as was mentioned yesterday, any rise in price today was going to be a bit tricky to sustain, because higher prices were quickly going to engage with (and perhaps challenge) the obvious growing resistance from the old breakout line above (arrowed).
So it was not surprising that this happened, and as expected and price was quickly forced to retreated back into the relative safety of the reduced supply, within the shadow of that breakout line.
The market did not however succumb to the increased supply and continue retreating lower, instead the Index quickly gathered itself up and showed signs of determined absorption (demand) for the rest of the day, this support eventually saw price closing about level.
There is a distinct feeling that this market does not really 'want' to go down right now, it remains quite resilient.
It seems supply and demand are quite evenly balanced right now, with perhaps the buyers looking under a bit of pressure overall.
**remember the last downwave saw increased length and duration, so the next upwave in response needs to at least balance or neutralise that move, or the sellers will most likely begin to gain the upper hand - so the ball is in the buyers court, so to speak**
Any challenge to the breakout line @~5300 will likely require increased 'effort' (seen as volume), to be seen as successful now.
And a clear close below ~5100 would raise the probability of a change in near term trend, and a test of some lower levels.




cheers

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