Update of the 26th August Chart.
Hindsight:.... Bear Market correction (sucker rally) petered out at the 4800 major resistance thereby keeping its bear status.
...................The correction was a large one and created enough positive sentiment to persuade investors to re-enter the market.
Where to now ? :....When the index broke the 4600 support a target price of 4400 was set..That mean't the 4500 support was under threat. If 4500 support failed (which it did) there is no charted support at 4400 so it seems the 4200 comes into focus (the previous low point).
The NZ50C status is Bear so revisiting 4200 has to be considered as a real possibility. 4200 is a strong support level as it has a historic support point back in September 2018 (yes...the majority of long termers that don't beat the market, their capital is now back to what it was in beginning 2019...As we chartists say famously said on Sharetrader by my Mentor Phaedrus "The market giveth the market takes away".
Although 4200 area is strong there are good odds it may break.. It has to be remembered that the market is in a Bear Market Cycle and the
DOW Theory is operating (lower highs lower lows with 3 stages).
Could 4200 be the bottom?
Who knows...but from my perception the odds of 4200 being the bottom is not good, investor sentiment although negative, it's near future is still too rosy (optimistic), (
VIX needs to be 40+ for a period of time) they are receiving shocks but there is no major panic yet so the DOW Theory monitors says No...My favourite (nearly 100% reliable) Duck is
Copper and it says No (its still trending down) I have about 30 ducks (indicators) and they are not lining up in a row yet so the majority of ducks say no.
I will repost the ducks on Sharetrader shortly.
It seems the NZ50C bear market cycle is in its middle stages and moving more slowly than average.
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