The share market is nervous and two warning signals have been flashing on the market for the past week or so but, as yet, all they are telling us is to exercise caution. The hot spots around the word, Gaza and Syria make us uncomfortable, but to my reckoning it is Russia’s face, growing uglier by the day, that is spooking markets.

The chart, plotted over the last 13 months shows how the MACD has since May, been hesitantly dipping lower and the market itself struggling to keep above the zig-zag slope. The zig-zag is set at 3%, which the amount lost or gained to make it change direction. A 3% loss calls for action.

Much in the market’s favour is that the candlestick plottings have been bouncing in the upper half of the standard error channel, but should they fall through, test or break through the lower edge of the channel, keep a close watch as this signals one of two things - a good buying opportunity, or time to get out of the market.

Jean Temkin