Above is a Candle Stick Chart for the XJO.In Australia today: 50...

Above is a Candle Stick Chart for the XJO.

In Australia today:

50 Leaders +1.1%
XJO +1%
Materials +1.1%
Energy +0.9%
Financials x-Property +1.3%
Small Ordinaries +0.5%
Gold Miners -0.2%
Mid-Cap 50 +0.3%

A strong day up on very high relative volume. Have a look at the Mid-Caps (XMD) figure (+0.3%) - and you'll see how lopsided this market was today. Lopsided markets are not healthy markets.

Technical Comment on the XJO (closed at 5441.4):

Indicators

RSI9: 79.7. Very Overbought.
MACD Histogram. Above zero. Positive.
MACD: Above zero. Positive. Possible negative divergence setting up.
Stochastic: 93.1. Overbought.
CCI.14: +117.2. Overbought.

Indicators are overbought. RSI is looking dangerous - but anything can happen in a bull market that is raging upwards. Normally - a figure on the RSI.9 around 80 would signal an imminent reversal. We'll have to wait and see how it pans out.

Volume today relative to the past 10 days was extreme. Given that we had a wide range day on very high volume in an overbought market - the odds suggest a pause or down day tomorrow.

Looking at the chart patterns. I've been watching the megaphone pattern for many weeks. A few weeks ago, I thought it highly unlikely that this market would hit the top restraining line of the megaphone. But it is in reach now. If it does get there - look out.

Redbacka