ASX 200: Large caps strong while small caps decline

By Colin Twiggs
March 5th, 2013 2:00 a.m. EST (6:00 p.m. AEDT)

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The ASX 200 continues to test support at 4980/5000 on the weekly chart. Breakout above 5100 would offer a medium-term target of 5500*. Rising 13-week Twiggs Money Flow indicates strong buying pressure. Reversal below 4980 is unlikely but would warn of a correction.

ASX 200 Index

* Target calculation: 5000 + ( 5000 - 4500 ) = 5500

ASX small-caps are still doing badly, with the ASX 50 [$XFL] out-performing the $XSO (ASX Small Ords) by a substantial margin. The opposite of what one would expect in a bull market: treat it as a caution. The current $XSO down-swing should test the lower channel at 2300, presenting a buy opportunity for swing traders.

ASX Small Ords

We can choose this moment of crisis to ask and answer the big questions of society's evolution — like, what do we want to be when we grow up?

~ Paul Gilding: The Earth is Full