Market Comments 22/2/2011

Today the XJO (ASX200) finished at 4857, down -0.88%. Well - I don't need to tell you that things don't look too flash>:)

OMG! Two days down and we think the world has ended. >:)

So how bad is it?

Here's the negative side:

1. Intermediate term resistance held on Monday.
2. Major support broken today. (See blue line on chart above.)
3. MACD Histogram broken below Zero.
4. Williams %R below mid-line.
5. RSI close to breaking below mid-line.
6. Directional Movement Histogram (not shown on chart) broken below Zero.
7. Index is significantly below the 13-Day Moving Average now at 4904.

What does that mean? Simply - we're in a short term down trend.

What's the good news?

1. Index is above the Super Trend Line
2. Index remains in a long-term up-trend.
3. The Index remains above the 65-Day Moving Average currently at 4764

The buy-the-dip crowd are salivating - but they might have to wait a while longer.

Small Ordinaries today was down -1.3%. Worse than the XJO at -0.88%

Until we see that downtrend line on the XSO:XJO ratio chart (lowest pane) broken to the upside, I think we'll see further weakness in this market.

Good luck

Red