Today, the market was up a little +0.4%. It finished marginally above the area I mentioned yesterday, 4700-4710. The market closed, however below the intra-day high set on 25 October. So I wouldn't class this as a break out.Next. The current shape of the chart is in the form of an upsloping wedge. That is usually bearish. That doesn't mean it can't break upwards. It can - and if it does is usually quite reliable in the short term. (A week or so.)
So - the market still seems to be waiting for news on which it can definitively move. That looks like the Bernanke statement tonight concerning the extent of QE2.
The American elections have panned out more or less as expected. The Republicans appear to have won the Reps and the Democrats retain control of the Senate. That's how predictions were falling - and that's what was priced into the market. So - no surprises there.
In the end, I always thought the Federal Reserve's position on QE2 would be the most important factor for the markets this week. The only surprise which would have moved the markets was a Democrat win in the House and the Senate. That looked a long shot - and so it proved.
We shall see what tonight brings.
At the moment, we still have an Australian market which is in non-trending mode, albeit with a slight upward bias. The chart pattern favours a downside break.
I should also mention the volume today. Volume today was 970,859,482. Volume yesterday, Melbourne Cup day with a holiday in Victoria and an unofficial holiday for much of Australia, was 808,638,207. There wasn't a lot of conviction in today's move up.
A break one way or the other out of that upsloping wedge should proof decisive.
Cheers
Red
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