Australian Index Report 5th April 2008

XJO Cash Weekly charts

Australian market has rotated back into the Yearly 50% level and stalled, and it also matches the Breakout of the December Quarterly lows, therefore there is a lot of resistance around this week's highs.

When you read the Stock Report on Banking stocks, there doesn't leave much room for further UPside moves in the next Quarter in the Australian Market.

Even though the Weekly cycle changed to BUY with this Week's Rally, that leaves a large gap to the cycle lows and a rotation back down.

After last week's rally it just looks like a major consolidation pattern will play out for the next 3-months.

SPI Weekly Futures

March timeframe completed and we can see the April 50% level has been set....

3 plays to keep an eye out in April.

A. Price continues upwards next week into the Quarterly 50% level @ 5857 before reversing back down

B. Reverses down early next week and re-tests the 3-week cycle high breakout @ 5464 before finding support and then moving upwards into 5857

C. Reverses down early next Week and continues down into the 3-week lows, resulting in a 3-month sideways pattern until July.

SPI Daily charts

Last Week's view was for the market to continue higher, ideally from the Weekly 50% level.

The market continued higher, but the ideal set-up didn't play out as most of the move occurred overnight because of the US Rally.

In fact the rally was much greater than just the Weekly highs @ 5521.

Next week 5615 is the level, above and it continues higher into the Weekly highs @ 5809...

But I favour an early move down back to the 3-day lows, and a retest of the Weekly highs @ 5521 from last week.

After that move I have a random outcome set-up:- Bounce off the 3-day lows and it heads higher, or a rotation back into the Weekly 50% level and a 'lower' Weekly close by Friday, which is the B set-up as it comes down to test the 3-week cycle high breakout @ 5464.

In conclusion:- favouring Down into the 3-day lows next week.

Please Read the Daily report in the Trader Premium using the 5-day levels and pattern recognition techniques.