Australia's All Ordinaries Index, like the Shanghai Composite, peaked at 75 per cent retracement resistance from the 2007 record high and very close to the psychological level of 6,000. A gentle rounded top has seen the market retrace 38 per cent of a two-year rally. Still in correction mode, and above two trend lines which might provide support, the danger is that further losses will cause a dead cross - when the 50-day moving average closes below a descending 200-day one. Last week's spike high at 5,700 suggests a new interim high is in place and that the index will drop to 5,287 (50 per cent correction) and possibly key support around 5,125. A bear trend looms.
