Charting Wisdom – Australian Stock Market Report 20 Nov 18
Australian Stock Market Report - 20-November-2018
Bounce or Break that is the question?
Today we are retesting the 26th October bottom at 5624.6. This is the lowest level we have been all year putting us down 440.5 points or 7.3% for 2018. However this may not be the extent of the move down as we are very close to confirming a Double Top reversal pattern and if this is the case we could be seeing a 53 in front of the figure for the local (XJO) market.
Australian Market (XJO)
Australian Market (XJO) Daily Chart – last 5635.5, Tuesday 20-Nov-18
Looking at the daily chart above showing all of 2018 to date I want to draw your attention to the last 2 tops marked with 2 blue T’s. This is the potential Double Top reversal pattern and if it breaks below 5624.6 the low between both tops then this confirms the pattern and sets up a target of 5310. This is 314.4 points or 5.6% below the October bottom. This is the Bearish outlook.
Today’s low (so far) has been 5635.5 only 10.9 points shy of confirming this pattern and setting up the target.
Alternately this could also be the second bottom in a Double Bottom reversal pattern with the first bottom being the October 26th bottom. First of all we would need today to be confirmed as a bottom (need an up day tomorrow at a minimum) and then we would need to trade above the top (5941.3) between the 2 bottoms to confirm the pattern. In doing so this would set up a target of 6252.
We would need to rally 305.8 points or 5.4% before we could confirm this as a Bullish Double Bottom reversal pattern yet we only need to fall 11 points to confirm the Double Top and set up the 5310 target. The market will show us what it wants to do and if we are smart we should follow its lead. The thing is we shouldn’t have to wait too long to get an idea what it wants to do.
If you just think that the Aussie market doing its own thing, then let’s take a look at the US markets and the S&P 500 in particular. What do you think? Do they look somewhat similar?
Shane also provides stock market commentary for US Market (S&P 500), request the complimentary market insights from him.
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