Thursday, 29 December 2011

ASX 200 resumes larger degree down trend

The daily chart shows that the ASX 200 has declined below the trend line drawn from the October and November lows. It is trading below all three moving averages, which indicates a down trend at this time frame.

Zooming out to the weekly chart we see that the 4 week moving average is crossing below the 18, signalling a resumption of the down trend.

AUD/USD daily chart looks interesting

The AUD/USD has turned lower at the trend line drawn from the October and December highs. If (IF) it continues lower toward or below parity in the next day or two, we'll see a bearish triple moving average crossover. When such crossovers happen, it is time to look for a strong and sustained subsequent move, though not necessarily in the direction of the moving average cross. Failed signals are signals too.

The weekly chart bullish MACDH divergence I wrote of a few days ago is still in place. If (IF) that divergence fails then the AUD/USD will likely plunge. If the divergence holds then the market will likely rocket. The market is at a key inflection point.