The market has spoken and who am I to argue? It handed me out a...

  1. 1,383 Posts.
    The market has spoken and who am I to argue? It handed me out a record profit last month, even though I got on the rally late due to other commitments.

    Next stop is just under 5000. This is the 50% recovery area and even the most paltry rally should be able to get back there. It is also the target for a rather crooked reverse head-and shoulders.

    The 200 day moving average also turned positive, which long-term buyers take as a sign the market direction is up. This has also happened on the resource majors but not the banks. The fact that the market ignored RSI 70 for the first time since 2007 is also a strong signal.

    I notice a lot of accumulation on many stocks (as expressed in the OBV moving ahead of the price)- the smart money has been slowly building up positions. This is particularly true on BSL, MCC, WPL and the iron ore stocks, and probably a lot of minors I dont follow.

    I remain cautious because a break upwards over a key level usually results in a confirmatory pullback to that level. I dont like to see the market well above the MMA and accumulating there usually brings me grief - but there is certainly no reason to sell now.

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