Yesterday, I commented on the confluence of events around the 5000 level on the XAO and suggested we could see a retracement at that level. I also wondered if it could be that easy?
Well, today, the day traders took the obvious signs - and were packing up to go to the beach at around noon today (AEST).
That chart (above) is just remarkable. The XJO hit resistance at opening and fell for two hours. After that it was all sideways.
Today's action was tres negative. Volume was high. Volume as the highest since mid-December. A reversal day, on high volume - not a good omen for the bulls.
Bears need to be wary - another day of confirmation is needed.
Today was a little bit weird. An obvious reversal day. XAO up just 0.24%. But the financials were euphoric, XXJ (Financials less Property Trusts) were up 1.4%. Why? Basically because CBA reported before the market opened today - and was the second best performer in the 50-Leaders. CBA up +2.13%. The other three big banks followed suit. But for the big banks, the market probably would have finished in the negative today.
So - tomorrow is crucial. A down day on the general market and weakness in the big banks would suggest we're in for a retracement.
It all looks just a bit too easy to me. Rarely is the market this easy. (Although the day traders today would probably disagree.)
Good luck
Red
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