CONCLUSIONS
This week the market continued up strongly from the gains of the previous week. The market, on the surface, is showing strength but internals, particularly divergent volume, Small Ordinaries, and technical indicators are suggesting instability. The 50 Leaders are as overbought as we’ve seen them. Although the market is showing fragility, the AUD remains strong and, as long as the upward trend continues, this should support further upward movement in the stock market.
Any unexpected news or shocks could throw this market into a significant correction.
While the “Number of Stocks above the 150Day SMA” remains above 50% and the weekly MACD remains positive, we must presume this bull rally is intact, albeit prone to sudden corrections such as we saw the recently.
I’m not on the side of the doom’n’gloomers predicting a catastrophic decline. This rally, on big volume, has been too strong to be predicting catastrophe. But – I think we must now expect a correction of some significance.
To finish, here's a little snippet I picked up this week: the Dow has crossed above 10,000 twenty-six times in the past ten years. So what's the big deal? - It's just been going nowhere for 10 years?
Cheers
Red
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