Anytime you see major divergences between price and OBV it's tended to be an excellent warning of major market moves with the ASX200. Not perfect but a nice guide.
Australia's ASX200 is weighted towards banks and resource stocks. The CBA Australia's largest bank and company on the ASX is in serious trouble with the federal regulator. The other major banks are floundering. Commodities are in a poor state. Around 40% of the Australian market is owned by international hedge funds. When things are over priced or when risk is off, they tend to pull their money away from our market. The other banks here are at big risk at the moment. With this underlying context, and with no material good news for these sectors here, the market should remain weak, and tend to break down harder on any risk. It would make sense that the ASX200 should track the S&P500 - it has in the past, but it has failed to keep pace because these forces are in play. When something should happen and it doesn't it's time to be aware.
The particular pattern with the ASX at the moment reflects a bearish pattern, noted by Amos Hostetter from Commodities Corporation, who taught legends like Paul Tudor Jones and Ed Seykota who often had 1,000% return years while they were there before they went out on their own. The pattern I mention appears in a Commodities Corporation handbook written by Hostetter to train new traders when they joined the company.
Australia's ASX200 is weighted towards banks and resource stocks. The CBA Australia's largest bank and company on the ASX is in serious trouble with the federal regulator. The other major banks are floundering. Commodities are in a poor state. Around 40% of the Australian market is owned by international hedge funds. When things are over priced or when risk is off, they tend to pull their money away from our market. The other banks here are at big risk at the moment. With this underlying context, and with no material good news for these sectors here, the market should remain weak, and tend to break down harder on any risk. It would make sense that the ASX200 should track the S&P500 - it has in the past, but it has failed to keep pace because these forces are in play. When something should happen and it doesn't it's time to be aware.
The particular pattern with the ASX at the moment reflects a bearish pattern, noted by Amos Hostetter from Commodities Corporation, who taught legends like Paul Tudor Jones and Ed Seykota who often had 1,000% return years while they were there before they went out on their own. The pattern I mention appears in a Commodities Corporation handbook written by Hostetter to train new traders when they joined the company.