The ASX 200 had a strong test of the resistance today on the back of the Hang Seng pushing BHP higher. We need to see if we get a break out. Once again this rally was off a double bottom so this is a strong trend. The ASX 200 has a habit of retracing after a break out so we will see how it goes. The Nikkei is down sharply again today due to no more stimulus. The PBOC have indicated there will be no more stimulus for China at this stage either so the HSI rally could fail at any time. I believe the rally is only due to stimulus hopes. This is very strange but as I say, there is no point trying to make sense of a market that is pumped up on false hopes that stimulus will do something. Reality will set in eventually and then we will see who has been swimming naked.
Below: ASX 200 daily chart
Below: The Hang Seng has been surprisingly strong but I always say you can never under estimate the strength of a double bottom. We need to see if it breaks out of the resistance to get an indication of the possible direction for the ASX 200
Below: Hang Seng daily chart
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