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‘Due to recent budget cuts, the light at the end of the tunnel has been turned off’. So jested an Irish cousin of mine recently on Facebook. Nice to find humour in times of adversity but I am aware many readers are doing it tough at the moment, even in Oz, where life is a way, way better than in most other parts of the world.
We need to reignite the light at the end of the tunnel as soon as possible so I will be searching for value moves for our readers in the coming months. But first let’s look at what the charts are saying.
Here is a simple weekly line chart for the All Ordinaries index:
click to enlarge
We have seen a number of 50% retracements, which tells me that the markets still do have a sense of order. C is approximately a 50% retracement of the fall from A to B and D is about a 50% retracement of the recovery move from B to C.
We are seeing some level of consolidation at D, albeit a quite volatile one and this is positive. Will this current level around 4,000 hold?
We have seen ‘clustering’ at this level before, as marked in yellow below:
click to enlarge
These areas of activity have seen levels of both support and weakness. There was support in 2005 and mid-2009 (and to some extent even now) but considerable weakness in 2008.
If 4,000 does not hold, we could see a move lower to about 3,600: 
click to enlarge
I am not going to forecast this move just yet as there is nothing technically compelling to suggest this is a high probability. But it is worth watching.
I will also be looking for the light at the end of the tunnel in 2012 and when I see stocks that offer promise, I will highlight them.
In the meantime I hope you can put the markets and money aside for the festive season and have a happy and restful one with family and friends. I would also like to thank you for the great support you have shown Trading Tutors and to my articles. Your feedback is greatly valued. I truly hope 2012 will be a healthy, prosperous and happy one …and that you enjoy the ride!
Enjoy the ride
Tom Scollon
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