Australian Index

The AUS200 has reached a turning point area so, in the following days, we can expect a bear action.

We must consider the also the bull scenario: in fact the market should have enough force for breaking the resistance level 5350 – 5440.

Information to be taken into account for a Short Action are:

PROS:

Yesterday’s candles has completed a Dark Cloud Cover pattern at resistance (Gravestone Doji 30/12/2015 an also a Bear Engulfing of 29/10/2015 on D and W);
After a close below a 5160 area the Risk:Reward is interesting.
A Shark harmonic pattern has been completed and validated;
We are at about 50% of fibo retracement (please take a look at the weekly chart);
Stochastic Divergence;
At the top of a rising channel, so in res area (blue dotted channel);
At the top of a descendent res line (blue dotted line);

CONS:

The Moving Average has its sloping pointing up so, most of the times, the market should follow a lateral movements for some days before pointing low. But after taking a short break, it could recharge itself and broke upward;
There are other points of important resistance levels in the neighborhood, one defined by a Bear Sash (or Engulfing, it depends mostly by the data feed and the charting platform we are using); you can see it on W chart, the 1st red arrow on the left;
A confluence of signals based on the intersection between the descending channel on W (draw in red) and the blue dotted line at about 5427 level (prior supp turned now into res);
the Shark BD segment could have up to 2.24 extension level;

Bases on the a proprietary model I have developed during the years, a see a bull market refresh only a for a daily close above 5410 area, otherwise the bear could lead the market downward after a period of indecision or lateral movements.

The probability for a decent short positions are still in place.

Daily

(Click on image to enlarge)