ASX 200 breaks support

By Colin Twiggs
October 26, 2016 2:00 a.m. EDT (5:00 pm AEST)

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The ASX 200 broke support at 5400 today, signaling another test of primary support at 5200. Declining Twiggs Money Flow warns of selling pressure. Recovery above 5500 is unlikely at present. Breach of 5200 would signal a primary down-trend.

ASX 200

The ASX 300 Banks Index broke through resistance at 8000. Twiggs Money Flow is still negative but recovery above zero now looks likely. Breakout would signal an advance to 8700 but I remain cautious and would wait for a retracement to respect the new support level.

ASX 300 Banks Index

If we look at the ASX 200 Sectors Chart — select File >> Open Project >> [ASX 200 Sectors] — Financials (ex-REITS) (dark green) have held steady against the index over the past two months. Poorest performers are Health Care, REITS, Consumer Discretionary, Utilities, Industrials and Telcos. Materials, followed by Staples, are the best performers.

ASX 200 Sectors

Financials and Materials both seem vulnerable to a property bubble. Just in different parts of the world: Financials in Australia, Materials in China.

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