Well, we had a bullish day on the Australian market. XAO up 1.15% on good volume.After my most recent pessimistic post people must be wondering if I've changed my mind.
Well, firstly, clearly we haven't met any of my criteria for a fall in the market.
I think I'll give this one more day - and if we get a solid up day, I'll hoist the white flag.
About two weeks ago I was reasonably bullish on this market; but events of the past two weeks changed that attitude.
The chart pattern on the XAO (see above) is a bearish pattern (ascending wedge).
Many of my odd-ball indicators are now at levels seen at market tops.
So this looks to me like a last gasp effort.
The market still hasn't exceeded the resistance level high set back in June. A close above that would seem decisive.
And then we're faced with a very overbought market.
That's always the Technical Analyst's big dilemma. Go short at extreme overbought levels? Or go with the flow?
I'm still betting on a sizeable retracement at this stage.
Cheers
Red
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