Postprandials Thursday 14/4/2011

In this morning's blog I said I thought we might be up today.  Not so.  I paid more attention to the EWA than the decline in the Materials Index in America.  That's usually a better guide - and it was today.

Today our market (XJO) was down -0.55%, after being much lower earlier in the day.

The figures:

XJO 4884.2: -0.55%.

Japan: +0.13%

Hong Kong: -0.5%

Singapore: -0.41%

Technical Comment on the Australian Market (XJO):

1. Clear reversal of trend with break of uptrend line on Tuesday.
2. For a clear medium term "sell" signal I like to see five indicators in sync:
• Slow Stochastic below 80 (condition met)
• Break below the 13-Day MA (condition met - marginally)
• RSI below its mid-line (condition not met)
• MACD Histogram below Zero (condition not met)
• CCI below 100 (condition met)
3. Volume was low today bringing into question the validity of today's move down. 
4. Significant horizontal support in 4800 area.
5. 50-Day Moving Average currently at 4811.8.  That might provide support if this market continues to fall.

At this stage, the above technical summary suggests that this is a pullback in an ongoing bull rally.  Untiil decisive signals are given - this is buy the dips time.  If all the above criteria are met - it's all bets off - look for a medium term down trend.

Good luck

Redb