The ASX 200 is retracing to test its new support level at 5500. Bearish divergence on 21-day Twiggs Money Flow warns of short-term selling pressure. Recovery above 5600 would signal a primary advance to 6000*.
* Target medium-term: 5600 + ( 5600 – 5200 ) = 6000
Small cap stocks, represented by the ASX Small Ordinaries Index, however, indicate the market is adopting a risk off approach at present. While institutional stocks advance, the small caps index is undergoing a sell-off, with Twiggs Money Flow reflecting strong selling pressure.
A line has formed over the last 7 weeks. Breakout below this level would warn of another decline (and a primary down-trend).