I tend to be conservative in my assessments of the market. But ... I can't find too many reasons any more to suggest that this market is still Bullish. This market is Bearish.Horizontal and vertical (diagonal) support lines have been broken to the downside. RSI has broken below its mid-line. The Williams %R, a much more reactive indicator, is also below its mid-line. The MACD has crossed below its signal line.
Now - the market today finished on its back side. So sure as God Made Little Apples, the market will be up tomorrow. But that doesn't negate the trend. the trend is now down, until it changes back to the upside.
It wasn't all doom and gloom on the market today. IPL was a hot spot - up +2.64% on a down day - a new 20-day high, and a new high since sometime back in 2008. It's now looking dangerously overbought.
A couple of the dogs with fleas showed a little life today. Two that come to mind - rising against the down trend were Suncorp and Coca Cola Amatil.
Only two blue chips were looking buff today (RSI above 60): IPL and AXA. AXA doesn't count - it's under a take-0ver offer.
Stocks on the Critical List (RSI between 30 and 40): CCL, Qantas, Suncorp, Wesfarmers.
Stocks on Life Support (RSI below 30): Leighton's, Toll Holdings.
The imbalance between bearish and bullish stocks is clear in the above lists.
The market is now short-term oversold with the blue chips above their 10-Day SMA now reaching under 20%. So a short term bounce is likely.
However, the blue chips above their 50-Day SMA is 44.9%. When that reaches under 20%, it might then be time for the market to turn around.
Of course, the market can do anything it wants. It takes no notice of what I think.
Do your own research.
Cheers
Red
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