As the global financial turmoil is settling down, sort of, it is time to start looking for opportunities on the upside. Meaning looking for trend change pointing upwards. Both the Australian and American markets made bottoms on Friday 10 Oct 08. Since then we had a short-lived rally before the pessimism tightened its grip again and sent the markets downwards, but not all the way to the previous bottom. Looking at the SPI (Australian Share Price Index) chart there are price resistances that suggest that a change of trend may happen shortly.
The first chart below shows resistance levels based on the low in 2003, which was when the last bull market started. As you can see the bottom on 10 Oct 08 is resting on 150% of the 03 low value, which is an important resistance level.
SPI resistance levels
Today (it is a Monday) the SPI went up from Friday’s low, but as an inside day, and we have a potential double bottom between 10 Oct 08 and Friday.
SPI double bottom
I am now looking for signs that the trend is changing, and when that is confirmed I’ll be looking for Long trading opportunities.