ASX 200: Three targets converge
By Colin Twiggs
July 30th, 2014 4:00 a.m. EDT (6:00 p.m. AEST)
The ASX 200 broke resistance at 5590/5600 and is set for a further advance. Recovery of 13-week Twiggs Money Flow above the descending trendline would confirm long-term buying pressure. Convergence of targets, calculated for different time frames, at 5750/5850 also strengthens the signal:
- 5250 + (5250 - 4650) = 5850
- 5450 + (5450 - 5050) = 5850
- 5550 + (5550 - 5350) = 5750
Reversal below 5540 is most unlikely, but would warn of a correction.
ASX 200 VIX near 10 continues to indicate a bull market.
The Australian Dollar is consolidating in a narrow rangee below resistance at $0.94, suggesting an upward breakout. Only concerted action by the RBA would be likely to counter this. Follow-through above $0.945 would confirm a rally to $0.97. Reversal below $0.92 is most unlikely, but would warn of a test of primary support at $0.8650/$0.87.
In practice we always base our preparations against an enemy on the assumption that his plans are good; indeed, it is right to rest our hopes not on a belief in his blunders, but on the soundness of our provisions. Nor ought we to believe that there is much difference between man and man, but to think that the superiority lies with him who is reared in the severest school.
~ Thucydides (c. 460 BC - c. 400 BC), History of the Peloponnesian War