I expect even the bulls are surprised by the continued strength of the ASX 200? Apologies for the hourly chart again but that's the sandpit I am currently playing in for this market, given the proximity to long term resistance between 4900 and 5000.... in my books, time to look for a turn lower. That said, the top announced by the throw-over featured in Monday's post did not last long, and neither did my short trade / bearish stance. The market could turn down from trend line resistance again now, but there are better immediate short plays in other markets. I think you'd want to be careful playing this over extended market on the long side unless it can clear and hold above 5000.
Friday, 8 February 2013
Stocks have been levitating atop a rising ocean of US dollar liquidity, so you also need to keep an eye on exchange rates, but first and foremost you need to watch the stock markets themselves. The DAX has been very weak this week, and I would be surprised if continued weakness does not prove contagious.
It would surprise many, myself included, if the S&P does not now continue upwards to test its 2007 high at 1570ish. A move below last night's low would indicate a throw-over of the top trend line and favour short term weakness, at the least. In the meantime, she'll grind upwards. Let's see.
Gold needs to stay above that trend line to keep its near term rally hopes alive. Last night's low appears key.