Wednesday, 5 October 2011

ASX 200 showing bullish divergences

Daily chart including after hours trade, showing bullish momentum divergences. Also there is a potential double bottom on the cash ASX 200 closing price chart (ASX close) - see the daily chart from The Prince's post at macrobusiness for an illustration of that. The trend is down, but these indicators are warning of a rally.

AUD/USD correction finished or nearly so?

A clear Elliott Wave A-B-C corrective channel formed from the recent highs indicates a potential for a move to new highs to begin from current levels. Weighing against that potential is the prevailing down trend. Elliott Wave always leans against the breeze, so to speak. I am more comfortable trading with the trend, but when such a clear Elliott pattern presents, it's best not to ignore it. Whether that means lightening up short positions, or going long, or sitting back and watching the show unfold, is up to you. A break upwards from the hourly chart trend channel shown this morning would be additional bullish evidence.

ASX 200 set to open higher

Daily candlestick chart shown below, including after hours trading, currently at 3931, up from Tuesday's ASX 200 close of 3872. The trend is down at this time frame, and also on the weekly and monthly charts.

AUD/USD rallies from trend channel line

Hourly candlestick chart.

Gold testing parallel trend line

Daily candlestick chart. Gold turned lower at the 38.2% Fibo retracement, and is now testing the trend line drawn from the May high. The illustrated trend line angle has a long history of being useful when analysing Gold (see the last chart in this post). If last night's low is broken, it's likely that September's low will be tested.