ASX selling pressure despite iron ore rally

Iron ore roared back, breaking resistance at $60. But this is a bear market. Also port inventories are climbing, while housing price growth is slowing. Expect another test of support at $50 is likely. Breach would signal another decline.

Iron Ore

The ASX 300 Metals & Mining index rallied off support at 2750 but is likely to respect resistance at 3000. Breach of 2750 would signal a primary down-trend.

ASX 300 Metals & Mining

The ASX 300 Banks index also rallied but is likely to respect 8500. Breach of 8000 would confirm the primary down-trend.

ASX 300 Banks

The ASX 200 displays strong selling pressure, with Twiggs Money Flow dipping below zero for the second time. Follow-through below 5700 would test primary support at 5600. Breach of 5600, while not yet a high probability, would complete a broad head and shoulders reversal.

ASX 200

7 Replies to “ASX selling pressure despite iron ore rally”

  1. When the ASX 200 TMF ‘dips below zero’ ( especially when it’s for the second time), then it’s time to buy according to the chart.

    I interpret these charts you produced as strong buy signals, all of them. I look for the previous peak around the 6800 level to be taken out in the next leg up, that’s to start soon soon. Then it’s another 10% to the final top in this cycle. Down from there only in the medium-term. We are 18 months away from the cyclical peak of 7500

    China’s current stimulatory impacts, their need/desire to ensure all’s well for the November Conference, re-inflationary measures in the Euro block and Japan and current fair-value Australian ratings will support my thesis.

    Your physical macro investment trend analysis provided in a separate article is interesting, and thanks for that.

    Go well, and all the best in the strong bull market ahead.

    1. “When the ASX 200 TMF ‘dips below zero’ ( especially when it’s for the second time), then it’s time to buy….”

      I would advise against that. Examine TMF behavior for the past 10 years on the ASX 200.

      ASX 200

      The only time that dips could have served as entry points is in the 2012 to 2014 up-trend.

      1. Randall says: Faint heart never won fair lady [ and he says ” Buy some calls ] 🙂

  2. Colin,

    Thanks for the response. Have to disagree with your only during “2012 to 2014 uptrend” .

    See also:
    Jul2010 = dips below for “second time” = time to buy = from 4400 to 5000
    End 2015 – Feb 2016 = time to buy = from 4800 – 5000 , to current 5750 level


      1. Colin,
        I agree with Randall.

        It’s a major medium-term buy signal out there on the ASX 200, from your charts provided, in your article, and in the chart provided in your July 1 response below.

        1. The excessive negative sentiment around supports a contrary view ; and
        2. Fundamental equity ratings are fair.

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