I am not a financial adviser so you should not take any part of this blog as being financial advice. Observing and interpreting charts is a hobby and so is this blog. The information in this blog is just my opinion, it may not reflect reality. Stock market investing is risky - you can lose all, or potentially more than all of your money given certain market conditions. Not only can you lose a lot of money buying shares, you can also lose a lot of potential profits by selling shares at the wrong time. So please do not buy or sell shares because of information in this blog. Whether you buy or sell shares is your decision as is the decision when to buy and sell. Do not risk any money you cannot afford to lose. Do not risk any money if you do not fully know and understand what you are doing.

Sunday, May 15, 2011

Trend is down but a bounce is due

Having now retraced 61.8% of the rally from the March low to the April high, a bounce seems due. The stochastic is rising and the 61.8% level often provides good support. Friday's price action also tells me there is some interest in a rally starting at this level. It's risky trying to pick a bottom, but if we can hold Friday's low on the All Ords (4754), we could see more buyers coming in and taking this market higher - probably back to at least 4900. A close above Friday's high would confirm that view. However, any rally should probably continue to be seen as a selling opportunity - that is until we see some serious evidence that this correction is over.
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