Short term technicals are mixed. Averages are falling. Leading indicators are mixed. The RSI and stochastics are slowly rising. The ROC is showing some minor divergence and trading marginally lower. Higher Fibonacci retracements are 878, already reached, 900, and 922, all of which are still within the bear channel. Elliot wavers are seeing this a reactive wave-four to 922 after reaching the wave-three target of 809. They will still target a wave-five to 695 while the index is below 994.

Medium term, the index islower within the bear channel at 640/980, but is displaying a potential pivot point reversal. There is a growing chance of higher retracement while the index is above 840/830. Traders will continue covering short positions and focus on the Fibonacci retracements while the index is above 830.

Medium term technicals are mixed. Averages are lower, but the 40 week number is now flat. Leading indicators are mixed. The RSI is sidelined to lower with the stochastics sidelined. The ROC has been slowly rising over the past 10 weeks while the index fell, indicating divergence. Traders will focus on divergence and Fibonacci retracements of 934, 973 and 1,012.

Longer term, the index is lower and has not taken out the 1985 low of 794 and is above the August low at 834. Traders will be reluctant to sell again and watch short term direction while the index is above 834.

Longer term technicals are mixed. Averages remain in bear formation, except for the 10 month number which is rising. Leading indicators are mixed. TheROC and RSI are rising. The stochastics are falling and becoming oversold with bear momentum slowing. Traders will remain cautious and focus on the lack of continuity and divergence. Elliot wavers are still seeing a fifth wave projection lower.

The index continues to trade lower within bear channels and is currently in short and medium term third waves. If the index continues higher this qualifies as a fourth wave and traders will focus on higher Fibonacci levels.

Divergence and the lack of agreement between the technical indicators is causing concern among traders. Longer term the index is still bearish, but while it remains above 830 there is a possible pivot point reversal that supports higher levels. Resistance is still at the channel tops and 955 and 1,016.

Seasoned traders will retain the lower targets, but short term focus on higher retracement levels and are likely to sell into rallies. However, if indicators align, or if resistance breaks, they are likely to abandon the lower medium termfocus.

(Daniel Fock is a member of the Australian Technical Analysts Association. Views are his own, not Reuters.)