Australia update II

Short term traders would have got exactly what they wanted with the tests of December highs. Intermediate and long term traders could have been satisfied with some resistance breaks (even if December highs were not breached). In addition, the $BPCOMPQ followed the $NAA50 by crossing above its 5-day EMA - although technical confirmation from the MACD is still needed. Volume in all markets dropped from yesterday's - not necessarily a bad thing, but in the light of a test of major resistance it would have been better to see this higher. 'Buy' triggers in on-balance-volume (a sign of accumulation) were apparent in the NASDAQ, Dow, NASDAQ 100, and S&P - but none of these markets have signalled a MACD 'buy'. All of these markets sit on the verge of new yearly highs so don't be surprised to see some weakness into the close of the week as the two days of gains are digested. Wednesday's trading completed the last day of the 'Santa rally' which gave the period a slight net positive (window dressing?).

The secondary tech indicators will be of key interest over the coming days. The increased bullishness of the $BPCOMPQ leaves just the $NASI with room for improvement. We have yet to see technical confirmation of a bullish turn in any of the three secondary indicators [$NASI, $NAA50 and $BPCOMPQ] and with the $NAA50 closer to overbought levels than the remaining two indicators it remains to be seen how much rally can be extracted from the next bullish phase of the market.

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