The ASX 200 broke resistance at 5000 on the strength of strong buying pressure, signaled by rising 13-week Twiggs Money Flow. Retracement that respects the new support level would confirm an advance to 5500*.
* Target calculation: 5000 + ( 5000 – 4500 ) = 5500
On the daily chart, mild bearish divergence on 21-day Twiggs Money Flow warns of retracement to test the new support level at 5000. Reversal below 4980 is unlikely but would warn of a correction.
ASX small-caps ($XSO – ASX Small Ords) continue to under-perform the ASX 50 [$XFL]. 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.
