Where to from here for the ASX200 after two days of capitulation

ASX200 Index

Time Frame : Daily

The ASX200 has come under further pressure today as the US fell apart overnight under escalating trade fears. The trend up has been well and truly broken with the move today as bears take charge. The action is very reminiscent of September last year after breaking through the anchor to the trend up so we have to plan ahead to be able to take the correct course of action whether a further correction is on the cards or whether this move is just a nice clean out prior to a run back up and through to new highs (in a perfect world). For bulls, they would like to see a sharp reaction higher, showing some strong buying interest, and then a controlled pullback showing that buyers are happy to soak up any further selling pressure. For the bears, they would like to see a controlled move up with minor higher lows and higher highs hinting at further selling to come. All we can do from here is let the duct settle and let the action play out. There will be time for bargain hunting but we want to make sure that it is off the lows. If the bearish scenario plays out, happy to short the market for what could be a strong move lower.

Index : ASX200

Current Price : 6468

Status : On watch for

Alert History

Previous Alert 5/08/19

ASX200 Index and AUDUSD

The ASX200 is heading south as buyers decide to lock away some gains in a very uncertain environment after breaking into new all time highs recently. The AUDUSD spiked lower and dragged the share market down as Asian markets come under pressure and trade wars take another bite at investor confidence. Trumps comments on tariffs has drawn criticism from China today which may have triggered the sudden selloff around 11am. We will be watching the action into the close to see if some bargain hunting comes back in to support price. The continued volatility and pressure on markets may lead traders to expect further rate cuts from the US Fed Reserve which would also provide some support going forward. Either way, we expect volatility to continue in the near term.

Index : ASX200

Current Price : 6708

Status : On watch for weakness into close if buyers can not make a stand

30 Minute Chart

Currency : AUDUSD

Current Price : 0.6769

Status : On watch for weakness into close if buyers can not make a stand

One Hour Chart

Previous Alert 30/7/19

Time Frame : Daily/Weekly

ASX200 Index

The ASX200 finally kicked up into new all time highs today to get the bulls all excited but could not close above the 6851.5 level. Taking a look at the weekly and daily charts below, there is every reason to believe that we may see a reaction lower. Prices are extended on all timeframes but that alone is no reason to take the bat and ball and go home. The key level now that we will be watching, along with price action, is the 6628 zone. Until this level is broken, bias has to remain up as we may see a squeeze higher as sellers try to pick the top and the action blows straight through the highs. Caution is key though and a bit of effort is required into finding those key setups that are primed and ready if the trend up does continue. If price action starts to get choppy and breaks below 6628, then we may see some short setups to enter. Its all about taking note of the action, planning out the different scenarios and managing risk.

Index : ASX200

Current Price : 6668

Status : On watch for a potential consolidation at the highs

Weekly Chart

Daily Chart