One only has to look at the MACD and the RSI to see that we're still in a non-trending pattern. Flat - sideways.The bulls had a good win yesterday which took the candle above the previous high. Was the break significant enough to say that it was a breakout? Maybe.
I always want to wait to see if there is follow through buying the next day to confirm - and on reasonable volume.
Today - we had a little bit of selling on low volume.
I don't like the three day candle pattern we're looking at here. (You won't find it in Neeson's book on Candlestick patterns.) It consists of a narrow range candle (usually black) followed by a large white candle, followed by a narrow range candle (like today).
It usually means, as far as I can see, that the white candle was formed by a panic driven short covering squeeze - and there was no fundamental reason behind it. So - the third day is a day that lacks conviction. A short-covering squeeze will last more than a day. This one hasn't.
Maybe I'm dreaming. We'll see.
Gold ETF (Gold in Ozzie Dollars) was down a little today - more relatively than the XAO. So that's not good for Gold. But good for the XAO.
Yesterday, I showed a Ratio Chart of Gold:XAO and had a support line drawn in - with the chart breaking marginally below the support line.
Much of Technical Analysis is subjective - seeing shapes in clouds.
So - today I've shown the same chart (updated for today's action) with a slightly different support line drawn in. That's a little less negative at this stage about the Gold ETF.
Gold ETF remains within in narrow consolidation channel - moving sideways (see the top chart). In a way this is an inverse mirror image of the XAO.
A break either way by Gold and XAO will probably set the medium term direction.
I'm still waiting.
Cheers
Red
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