Category: Australia & NZ

The ASX 200 was trampled Monday by the stampeding herd, reaching its medium-term target of 4000* in 4 days. There are no signs of a retracement so far. This could even re-test the 2009 low of 3200 in the next few weeks.

* Target calculation: 4500 – ( 5000 – 4500 ) = 4000

The Dow Jones New Zealand Index ($NZDOW) gapped down at Monday’s open, foretelling a miserable day for Asian markets.

Posted August 3, 2011 8:00 p.m. ET (10:00 a.m. AET) on Trading Diary.

After several tentative attempts, the ASX 200 broke through support at 4500, following Brazil into a primary down-trend. Wednesday’s follow-through below 4450 confirmed the signal. 21-Day Money Flow below zero indicates selling pressure. Expect retracement to test resistance at 4500, but target for the breakout is 4000*.

* Target calculations: 4500 – ( 5000 – 4500 ) = 4000