If the XAO (bottom chart) is going into reverse, one more little move up is about all that would be expected.- XAO has hit the 50-Day Moving Average and the down trend line from mid-April
- The MACD is still below the Zero line
- The RSI is at 54.8 - I'd expect a top in the market to be about 60 on the RSI if the XAO is to reverse.
- Critical resistance of 4500 is just above the current level of 4477
- The Slow Stochastic is showing a slight negative divergence from price
- The DMI still hasn't crossed over to the positive side.
The Ozzie Dollar (middle chart) has an important fundamental effect on the Australian market. It is now at resistance, and the MACD Histogram is showing a marked negative divergence from price. This may be as high as the Ozzie goes in the short term.
The market is short-term very overbought with the 50-Leaders over the 10-Day Moving Average at a very high level of 92% (top chart). That's a level often seen for a short-term reversal.
So - we might see a bit of upside tomorrow. But that might be it for a couple of days. What happens after that is of the utmost importance.
Cheers
Red
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