the tale of four charts - thursday, page-46

Above is a Candle Stick chart for the XJO.

Summary of major indices In Australia today:

Twenty Leaders -1.1%
50 Leaders -1%
XJO -1.1%
XAO (All Ords) -1.1%
Small Ordinaries -1.4%
Financials (ex Property Trusts) -1.1%
Materials -1%
Consumer Staples -1.2%
Energy -1.6%
Health -1.3%
Telecoms -1.7%
Consumer Discretionary -1.3%
Utilities -0.8%

Comment: Another poor day. Volume was a little below average. I said yesterday that we’d probably have to see a washout day on heavy volume. Today only reinforced that idea.
Technical Comment on the XJO (closed at 4771.8):
Major horizontal Resistance: 4891.4. Support: 4506 $150-Day TMA is at 4900.

Indicators

RSI9: 14.9. Extreme Oversold. Bulls want this above 30.
MACD Histogram. Above zero. Positive.
MACD: Below zero. Negative.
Stochastic: 3.7. Extreme Oversold.
CCI.14: -127.6. Negative.

The index is now down to the long term oblique up trend line from June 2012. No support has held this correction so far, so there’s no reason to believe that this one will provide anything but token support. It sounds like I’ve thrown in the towel and joined the perma bears. That must be a sign that this market is going to turn around.

Looking at things more rationally. RSI is now at a lower level than we saw at the end of the waterfall in mid-2011. That’s seriously low. But – until we see RSI back above 30 – there’s not much point in being optimistic about this market. It will happen – and soon. CCI is showing the potential for a big positive divergence. That’s a good sign. But – until this turns up – you know the story – the trend is down.

Redbacka