The XJO eventually closed higher on Wednesday, after being...

The XJO eventually closed higher on Wednesday, after being sharply lower soon after the open.
The Index initially sliced lower in sympathy with overseas markets which closed poorly.
Price even (briefly) traded below the lows of the previous six trading days, before steady and determined demand effectively 'bought the entire offer' that had built as price moved lower.
The market perhaps even got a bit ahead of itself by closing slightly higher by the close of trade.
This higher close was at least an illustration of the 'depth of buying enthusiasm' that emerged today.
The local market has used the response from the poor overnight lead as a buying opportunity to accumulate further, and this will have also removed more supply from the broader market, most likely weakening the resistance around this level considerably.
The bar on the chart looks like a pretty serious 'shakeout'. In particular I note that price even traded below the lows of the previous six trading days for a period, and then comfortably recovered all of the lost ground to close higher for the day.
This was a serious sign of potential strength in the market - and it was also another opportunity to move the market lower that was completely ignored (this failure to move lower can be used as an indication that the underlying sentiment is for price to move higher).
If the shakeout is confirmed over the next few days, it will likely see the Index move higher in response and issue an even more serious challenge to, and probably breakout above, this important weekly level above (red).
Edit - Finally can I just point out, that while today's trading (and most of the recent trading) appears quite positive - and it is.
If overseas markets tank, and actually breakdown - not just trade sideways or modestly lower, but actually begin to breakdown (for whatever reason), our local market will turn and follow, no matter how potentially bullish the recent trading and underlying sentiment is.
This is just a fact of life in the markets.


cheers

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