Australia: ASX 200 weak but support for banks

The ASX 200 penetrated its lower trend channel, indicating that the up-trend is slowing. This week’s long tail indicates short-term buying pressure but not necessarily a reversal. Breach of primary support at 5100 would warn of another decline (4700). Bearish divergence on Twiggs Money Flow indicates long-term selling pressure.

ASX 200

The ASX 300 Banks Index is consolidating between 7200 and 8000. Declining Twiggs Money Flow peaks warn of long-term selling pressure but this week’s blue candle suggests short-term support. A test of primary support at 7200 remains more likely but a failed swing that recovers to 8000 would be a bullish sign. Breakout above 8000 (still unlikely) would signal a primary up-trend.

ASX 300 Banks Index

4 thoughts on “Australia: ASX 200 weak but support for banks

  1. Moses says:

    Love your work … in terms of quality and frequency … both ideal in my view, appropriately reflecting the experience and skill of a professional with ample understanding.

    However, would have preferred – for you and readers – had you stayed with your initial bearish flavour that ended about 3 months ago. Yes, I appreciate that as information changes, so does your interpretation.

    All the best, and thanks.

  2. murray cooper says:

    Hi Colin,
    Haven’t commented for some time but I would appreciate being able to drop another 2c worth into the comments.
    The ASX looks like a bull flag in a longer downtrend over a longer weekly view – target 4400; and
    the S&P500 – three peaks and a domed roof (house) ???
    Currently reviewing some harmonics for a “crystal” glimpse and I still think the current patterns (esp commodities) are similar to 1979-1982 albeit dragging out with artificial stimulus from the plunge protection team.
    Another interesting commentator is Henry Ledyard found on:
    http://www.barchart.com/futures/marketoverview
    Thank you
    Murray

    • ColinTwiggs says:

      Hi Murray,
      Thank you for your comments. Patterns can be a bit like ink blots where we each see something different:

      • ASX 200 – we need a breach of 4700 to confirm the down-trend.
      • S&P 500 – inverted head & shoulders completed with breakout above 2100/2130.

      I see Henry predicts a collapse of the real estate market in six weeks. I agree that the bubble has to burst at some point, but 6 weeks seems unlikely.

      • Murray says:

        Hi Colin,
        I think Henry is paraphrasing “zero-hedge” as reported in Macrobusiness last week. Seems to have got the yanks all stirred up “… see! It’s not just us!!”
        Mahendra Sharma (financial astrologist) is calling S&P at 3200 and gold at $700 – and he has been right so far … even when the planets are not aligned.. His forecast is for an S&P upturn within the next 2 weeks (or thereabouts) and the top in 17.
        I see a flat bottom triangle on ESZ16 (Daily) requiring a break below 2110 to find 2070. I can not see an inverted H&S, on Daily, but looks like one on Weekly. But It is a reversal pattern and should not be “inverted” at a top! Maybe it’s a broadening top in formation … and it would be a big one.
        Another pattern I follow is looking for a drop into 2080 – seems to be a popular area.

        I don’t believe the Interest rate challenge is the current S&P driver …( 1/4 of 1% per year) will not hurt the US economy. But the Fed must be worried about the bond/share stimulus corner they are in now and they will be “tip-toeing” around everywhere this week. No action here until after the election. You-Tube is 50/50. So we need another catalyst to send it lower and the plunge protection team and the “But the Dips” will come in and support it post FED speak.
        Always enjoy reading your posts.
        Thank you
        Regards
        Murray

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