Another pause in proceedings today. The candle is a small doji - which indicates indecision and, at the top of a rally, sometimes precedes a fall in the market.Is that likely? I could easily be wrong, but I don't think so.
The market is still not overbought with the Daily RSI at 63.7. Any significant retracement is likely to occur with the RSI around the 70 level.
The Advance/Decline Line has now reached above the October high while the XAO is still a little below that. So we have a positive divergence suggesting the XAO will go higher.
I haven't put up this chart, but the UpVolume/DownVolume Line now exceeds the January high - an even stronger divergence.
The On Balance Volume has also exceeded the January high. (Chart not shown.)
50-Leaders and Small Ordinaries were both up 0.1% today - so sentiment regarding risk was evenly balanced - congruent with a flat day.
The XAO chart has broken above the upsloping wedge and the shall down trend line from January. That's a bullish development providing support under the XAO.
So, I think this market is going higher. We might have another day or two of consolidation before the next move up - but that's where I think it's going.
If we get a big black candle tomorrow, then all bets on the upside get cancelled. That would complete the reversal pattern hinted at by today's small range doji.
Best of luck - I hope you've been on the long side of this very good run.
Cheers
Red
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