TRENDS:
- XJO: long term (monthly chart) - up
- XJO: medium-term (weekly chart) - up.
- XJO: short-term (daily chart) - up
- Dow Industrials: medium-term - up
- Dow Industrials: short-term - sideways.
- Ozzie Dollar: Medium term. Sideways consolidation. No significant reaction to Middle East instability.
- Gold in Oz Dollars: Medium-term trend - up.
XJO currently at 4837.
Major Support and Resistance for XJO: Resistance: 5000; Support 4200 .
Copper and Commodities in general remain strongly positive - positive for world markets.
XJO Long-term Chart Pattern: Rising bearish wedge. Break upwards - very bullish; break downwards - very bearish. Wait and see. Probabilities for this chart pattern favour a downside break.
Any correction is likely to be muted because of Bernanke?s money supply (QE2) and the strength of the Presidential Cycle in the 3rd Year.
Next Week: Geo-political events (oil price) will determine direction.
Reading Al Jazeera shows the Libyan civil war continues. Turmoil, protests and crackdowns continue in many Middle Eastern countries These events can move rapidly and move the markets with just as much rapidity.
The Game Plan:
- Seasonality favours further upside in March.
- The overbought conditions which prevailed in February have been eased.
- Short-term down trend seems to have finished.
- The longer term trend is up - follow the trend.
- If escalation of Middle East turmoil occurs, it will raise the oil price and scuttle the longer term trend.
-Plenty of caution signs are flashing. Be flexible.
Good luck
Red
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