What the Hell happened Friday?

Friday felt like a tornado ripping through the Ozzie market. ASX200 down -1.44%. Every sector of the market was well into negative territory.  

Why?  

Basically, the Reserve Bank tossed in the towel on interest rates. They've been saying for months that interest rates won't rise until 2023.  

Well, the Bond Traders looked at the inflation data, and said, "The RBA doesn't know what it's talking about - inflation is here and here to stay - so interest rates are going up and up and ..." You get the idea.  

While the RBA might delude itself into thinking it sets interest rates - that's just a fantasy. The market sets interest rates and the RBA tags along like a good little puppy dog. So - the stock market had the bejeezus scared out of it - and dropped like a stone.

That big move down has now broken the market structure which was bullish, and Friday's action wiped out the last ten days of trading.

XJO broke convincingly below a key Moving Average - the 50-Day Moving Average (curving blue line), and also broke below one of my key trend indicators: Supertrend 1.5/7. ST 1.5/7 is the green and blue line. Green is bullish - blue is bearish. When the chart breaks below the green line, it then turns to blue. XJO finish well below the green line yesterday.

Now - such a big down move often results in a move back up the other way. So we could see a bounce on Monday. But given what happened to commodities in America on Friday night (it was bad, bad, bad) I can't see a lot of upside in our market on Monday.

Enjoy your Weekend!