The ASX 200 retreated more than 2.0% Monday after the Cyprus deposit grab unsettled financial markets. Expect another test of support at 4980. Breakout would warn of a correction, while recovery above 5150 would signal an advance to 5500*. Declining 21-day Twiggs Money Flow indicates medium-term selling pressure.
* Target calculation: 5000 + ( 5000 – 4500 ) = 5500
Dow Jones Japan Index dropped about 1.5%. Follow through below short-term support would indicate no more than retracement to the rising trendline.
Dow Jones Hong Kong Index has fallen about 2.0% so far. Breach of support at 472 signals a correction.
Dow Jones Singapore Index has fallen 1.0% in the morning and we can expect further weakness in the p.m.
European markets are likely to open lower. If the US follows and finishes the day with a weak close, negative sentiment could start to feed on itself, tipping global markets into a correction. Overall, the primary trend in the US and Australia remains positive.
About time for something more than just a day or two down. Nobody likes down markets, but if we don’t see a decent pullback or consolidation for a while here then to my mind any subsequent rally is suspect.
Hi Colin
I’ve seen this a couple of times now and not quite sure what you mean…
Respect of support at 5000 is likely, but even a stronger correction would not disrupt the primary up-trend:
Regards,
Grant
Corrections are secondary movements and do not alter the primary trend: one step back, two steps forward.