(Click on chart to enlarge.)
Another relatively uneventful day on the surface. The XAO was down just 0.33%.
Once again the market was dichotomous. Financials were down -1.1% while Materials were up +0.3% and Energy up 0.6%.
Materials and Energy became more overbought. The RSI of Materials is up at about 72 and Energy was above 72. When they fall the market will fall to a much larger degree than today.
The RSI for the XAO has now dropped from above 70 to below 70 (68.4). This is a short term sell signal. Expect further falls.
We're coming into a bearish time of the month. The last week of the old month and the first week of the new month tend to be bullish - then the market goes into a bearish stance. So seasonality supports the idea of further falls.
Cheers
Red
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