ASX 200 selling pressure as iron ore corrects

Iron ore penetrated its rising trendline, signaling a correction. A trough that forms above the June 2017 low would be bullish for miners.

Iron ore

That seems likely given rising crude steel output in China.

China Output

The ASX 300 Metals & Mining index is testing support at 3200. Breach is likely and would signal a test of 3000. But respect of 3000 would confirm the long-term up-trend.

ASX 300 Metals and Mining

The ASX 300 Banks index rallied off support at 8000. Respect of resistance at 8500 would be a bearish sign and breach of 8000 would signal a primary down-trend. Recovery above 8800 is unlikely at present but would complete a double-bottom reversal.

ASX 300 Banks

The ASX 200 continues to consolidate in a narrow line between 5650 and 5800 but the tall shadow on this week’s candle and Twiggs Trend Index troughs below zero both warn of selling pressure. Breach of support would signal a primary decline, but direction remains uncertain until there is a clear breakout.

ASX 200

One thought on “ASX 200 selling pressure as iron ore corrects

  1. Murray Cooper says:

    Hello Colin,
    Re XJO: This rectangle forming just under a top is unusual. Normally rectangles break in the direction of the build (entering) trend. That would be down and supported by a majority of seller (upper) absorption pins (shadows) “on them bars” coupled with your tend index retreating.
    I agree with you regarding the bull market – possibly reinforced by the equity/gold/FX complete inattention to NOKO. Nothing stops a major bear/bull except a major bull/bear ie low prices are fixed by low prices.
    The XJO rectangle break down target would be circa 5500 … just a blip considering we are not participating in the northern hemisphere bull. Maybe this is our cost of not having a 2009 financial shake out … (perhaps still to come).
    I really like your new trend index

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