Higher, for Longer

Risk failed to sell-off in the time I thought it would, and this suggests that there is a bit more strength to come, for a little while longer.

This is a daily chart of the Australian dollar in Japanese yen - a very good gauge of global risk appetite. The pair has been consolidating for about a month, and looks ready to move higher, in what I believe will be the final move higher. Under this scenario we top around the beginning of November.

This is a daily chart of the Australian stock index. Since the end of last month, the index has been trading in an ever tighter range, drawing out a beautiful symmetrical triangle. Triangle most often break-out in the direction of the preceding trend, so in this case it will be higher. However, triangles are also usually the penultimate formation in a sequence, suggesting that a sharp reversal will follow the breakout. Again, the picture here suggests tops around the beginning of November.