The ASX 200 continues to consolidate in a narrow line between 5650 and 5800. Rising Twiggs Money Flow (21-day) warns of short-term buying pressure. Expect a test of resistance at 5800. Breakout would signal a primary advance, testing 6000, but breach of support at 5650 remains as likely and would warn of a primary down-trend.
The large cap ASX 50 is historically less volatile than its S&P 500 counter-part. While the Australian index has some smaller stocks (lowest-weight IPL has market cap of $5.7 bn compared to S&P 500 NWS of $10 bn in AUD) the higher dividend yield tends to compensate. That difference has reversed recently but Twiggs Volatility (21-day) for the ASX 50 is also falling, reaching 0.92% this week.
Currency growth remains weak (below 5% per year), indicating that the economy still faces headwinds.
Iron ore continues its extended bear market rally. The next correction is likely to find support above the primary level at 53.
ASX 300 Metals & Mining is testing resistance at its January/February highs. Breakout above 3240 would signal a primary advance. Expect some profit-taking but reversal below primary support at 2730 is now unlikely.
The ASX 300 Banks index breached support at 8500, however, and continues to drag on the broad market index. Declining Twiggs Money Flow warns of selling pressure. Follow-through below 8400 would confirm another test of primary support at 8000.