The ASX 200 is falling sharply despite strong performance in China. Breach of the rising trendline (around 5400) would indicate a correction to test the primary trendline around 5000. The support level is indistinct because of frequent back-filling and could establish anywhere between 5300 and 5450. Reversal of 13-week Twiggs Money Flow below zero after a bearish divergence warns of strong selling pressure. Respect of support at the secondary trendline is therefore unlikely.
* Target calculation: 5650 + ( 5650 – 5450 ) = 5850
The ASX 200 VIX is rising, but low levels remain typical of a bull market.
Dow Jones Shanghai Index continues to make strong gains since commencing a primary up-trend, but expect further resistance between 310 and 315, at the 2013 high.
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