The XJO closed higher on Friday, where spread narrowed...

The XJO closed higher on Friday, where spread narrowed considerably and volume increased slightly.
There was no serious challenge was issued to the ~5300 level, although price was run up towards it a few times during the day.
Generally there would be some sort of response or challenge issued within about three days, and if not some concerns begin to be raised.
Spread was very narrow today- the narrowest for two months (since the 21st Feb) - and volume was quite decent, which suggests that pretty decent supply was being encountered.   Without any confirmation yet, the narrow spread could either reflect ongoing absorption at resistance (potentially bullish), or it could represent the last gasp from the buyers in the face of continuing supply (potentially bearish).
I expect confirmation of some sort will be seen fairly early next week.
(speculation >> was this new professional shorts being set across the market today ??  in preparation for the next downside move)
Finally, when spreads contract significantly like this - especially when volume remain reasonably strong - strength is usually built up within the market, and price can often expand considerably in response.
So watch for a decent move early next week - one way or the other...


weekly charts later tonight

cheers

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