tuesday's road map, page-11

In Australia:

Twenty Leaders +0.4%
50 Leaders +0.4%
XJO +0.5%
XAO (All Ords) +0.5%
Small Ordinaries +0.7%
Financials +0.2%
Materials +0.9%
Consumer Staples +0.7%
Energy -0.0%
Health +0.1%
Telecoms +0.3%
Consumer Discretionary +1%

Comment: I mentioned this morning that we’d have a good day today – but not as strong as the major American Indices. At around 2.30 p.m. it looked like we could be up there with the Dow Industrials but the last 3/4 hour trading saw a sharp sell-off which pulled the major indices down. At 2.38 p.m. the All Ords was up 0.8%, but finished up 0.49%. Volume today was high. 20-Day Relative Volume stood at 126.6%. Anything over 120% is very high. Despite the strength today, the XJO is struggling to make any significant progress up. The intra-day high today was less than 7 points above Wednesday’s high. That’s marginal – just +0.15% up. Today’s close was below the intra-day high set last Wednesday. This is typical topping action. High volume, not much head way. That doesn’t mean we can’t go higher. Anything is possible.

Technical Comment on the ASX200:
The XJO finished at 4595.2. Oblique resistance lies at 4628.8. Not far away.
Indicators:
Stochastic: 87.3. Overbought. Below its signal line.
RSI: 73.5. Overbought.
MACD Histogram. Below zero. Negative. But rising.
MACD: Above zero. Positive.
CCI: +91.4. Kicking up but below +100.

This remains a market where the major risks are to the downside.

BHP Chart.

BHP has now been up 10 days in a row. That’s long in the tooth. RSI now at 86.9. Way above the 80 level. If this gets to an RSI of 90 it will become the short of the century. Well, maybe of this week. :)

CBA Chart.

CBA remains stubbornly within the rising (bearish) wedge. Momentum continues to fall. Money flow is negative. How much longer can it last? A slight nudge would send it sprawling.

This market is due for a pull-back. No doubt many people saw today as a buying opportunity to get on to the "Santa Rally". I think the late afternoon sell off, on a high daily volume, indicates that the “smart money” was selling into this rise. They are sometimes early – but rarely wrong over time. I think they took the money for their Xmas presents today. We’ll see.

Redbacka