2/5/23. RBA raises interest rates (unexpectedly) and says more to come. ASX drops sharply. XJO down -0.9%.
Here's today's chart of the XJO.
XJO has now failed at horizontal resistance, and is short-term bearish. It remains above the Kumo Cloud where it may find support.
I don't say that with a lot of confidence.
Consider the following chart of Historical Volatility:
We can see that Historical Volatility is at a low level, even a bit lower than the past two times. It has now turned up.
I could have loaded up a much longer time frame which has more examples of such low levels, but this will do for the purposes of illustration.
Below is a Weekly Chart of the XJO with times pinpointed when HV was at such low levels the past two times.
HV turning up from a low level has been fairly good at predicting further declines.
Tonight (Oz Time) the Federal Reserve starts a two-day meeting. They will hand down their interest rate decision on Thursday night (Oz time).
Currently, European stocks are leading to the down-side, Euro STOXX600 down -0.36%. Dow Futures are down -0.19%.
