Australian All Ordinaries Index (XAO) for week beginning November 8, 2004

The last possible short position was very short indeed! No sooner did it confirm then it shot back up to make record highs every day. The great thing about the market is that analysis at best gives you the probability but the market always tells you the correct direction. WD Gann said to be ready to admit your analysis is wrong and reverse your position.

Reversal dates over the next two weeks are:

• November 5-8
• November 12
• November 19-22

The All Ords is in the time period to reverse into the 20.5-month trough. The rise was 1200.4 points from the low on March 13,2003. If 3866.7 is the high for this cycle then expect the low to fall somewhere between 3121 and 3407, with the strong resistance at 3266. Before we get too excited about a decline we need to wait for a counter-trend confirmation.

Watch for minor support around 3770 and 3672. Major resistance at 3888.

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