Technicals | Nov 24 2010
By Rudi Filapek-Vandyck
Daniel Goulding's latest edition of his weekly newsletter, The Sextant Report, seems to offer a little bit for everyone. On one hand it would seem the technical market analyst's conviction that we won't see a return to the April highs anytime soon seems to have strengthened. Moreover, Goulding seems to be of the view that the peak seen in April won't be revisited for at least another twelve months (!). A view that falls in line with his broader outlook, expressed towards the end of the report, that this is neither a bull nor a bear market, but a sideways moving market.
If anyone out there thinks sideways is boring, then consider the share market is effectively in a sideways range since late 2009, and we have seen index levels above 5000 as well as 4175 throughout the period. Goulding is in essence predicting more of the same.
For now, however, he thinks the high is in for the year, and while predicting a relief rally at some point during the coming five days, measures of internal market breadth have already convinced Goulding the market is now heading for lower levels. In the characteristic lingo of someone who views the share market through a technical lens, Goulding reports "The XJO has confirmed an objective downtrend signal this week."
Goulding believes the ASX200 is now on its way to revisit 4175, which was the low of this year, registered in May. He also remains of the view that once as this point, the share market will put in another rally. So investors and traders should position themselves to buy into the coming downturn, he suggests.
So there you have it, the share market will not break above 5000 in the year ahead. It will revisit 4175 in the next few months. And it is likely to rally in the days ahead.
