Knowing where we stand (position within a major trend) in the big picture is very important. If we look at the following two monthly charts of XTJ (ASX 200 Telecommunication Services) and the XPJ (ASX 200 REIT Sector) all I can see as of this writing, is that both have been registering HIGHER PEAKS and HIGHER TROUGHS suggesting that both trends are UP. But in the short term both are in corrective modes, pulling back. If we look at the daily chart of either all we see is the opposite, which may look scary. XTJ by far the strongest after the MAJOR BREAKOUT in November last year, registering an all time high then. As of this writing XTJ is pulling back to that zone which is now a significant zone of support reversing it’s role. Hard to say whether or not this support holds. At least a temporarily a stop to this pullback/correction is expected. But until such time that we start seeing rising peaks and rising troughs on our daily charts, this recent correction/pullback is assumed to be still in effect suggesting further downside pressure.
First chart is the XTJ MONTHLY CHART below, last candle is yet to be completed.
Now to the XPJ monthly chart and again the last candle is incomplete.
It is not a high momentum index like the XTJ, but it still registering rising peaks and rising troughs.Last major correction which started in May 2013 and lasted till Jan.2014 was halted at the prior breakout zone( Blue dashed horizontal line) with a relatively shallow correction. If the history repeats itself one more time, we may see this current correction end around Dec. 2015- Jan.2016 at the Pink dashed support zone .But again, until such time that we start registering those rising peaks and troughs on our daily charts, this correction is assumed to be still in effect. Evidence of a change in trend in the short time frame daily, is what I would be looking for.
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