2/5/22. ASX200 down heavily today -1.18%.
Today's candle, a bearish engulfing candle, took out all of the gains achieved on Friday.
Indicators are indecisive. Hull MA13 remains in a down trend. Supertrend 91.5/7) remains bullish after Friday's good result.
Conversion Line and Base Line on the Ichimoku System are both tracking sideways - indicating no trend.
Wait until we have more decisive signals from the chart.
Breadth was poor today with both Advances-Declines and NewHighs-New Lows both showing clear downside moves.
Advances-Declines Cumulative;
NH-NL Cumulative.
Until we see some positive action in these breadth indicators, it's best to stay defensive.
Historical Volatility is rising above Implied Volatility. This is another indication of a bearish market.
Historical Volatility is the blue line, Implied Volatility is the red line. When Historical rises above Implied, it usually means the market is short-term bearish.
Friday night's humungous drop in the U.S. is unlikely to be repeated tonight. So we could have a positive day in Australia tomorrow.
Tomorrow will bring the Reserve Bank's interest rate announcement. Most economists are expecting an interest rate rise. That would be the first rise since 2010. A rise is probably priced into the market, but the size of the rise could spring a surprise.
It should be an interesting day tomorrow on our market.
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