ASX 300 Banks index broke support at 7600, signaling a correction to test primary support at 6750. Declining peaks on the Trend Index confirm selling pressure.
The ASX 200 REITs index has formed a bearish descending triangle. Breach of support at 1600 would warn of a correction. It seems unlikely that would reach primary support at 1350 because financial markets are searching for yield.
The ASX 300 Metals & Mining index is also faltering. Expect another test of support at 4100 (neckline of a large head-and-shoulders reversal pattern). Breach would offer a target of 3400. The Trend Index penetrated its descending trendline but a peak near zero would warn of continued selling pressure.
Iron ore found short-term support at 80 but continues its primary down-trend. Our long-term target is 65.
The ASX 200 retreated from resistance at 6800. Declining Trend Index peaks only indicate secondary selling pressure at present. Expect another test of support at 6400. Breach is still unlikely but would offer a target of 5400.
We maintain low exposure to Australian equities, with a focus on defensive and contra-cyclical stocks, because of our bearish outlook.