The two largest sectors in the ASX 200 are both retreating from recent highs.
The ASX 300 Metals & Mining index is testing support at 3750. Breach of support and the rising trendline would warn of a test of primary support at 3400.
The ASX 300 Banks index reversed below its short-term support level at 8000, warning of a test of primary support at 7300.
The banking sector faces the prospect of higher funding costs, falling credit growth and rising default risk and I remain cautious despite penetration of the descending trendline which suggests that a bottom is forming.
The ASX 200 retreated from resistance at 6300. Breach of short-term support at 6200 would warn of a correction.