Charts rarely provide neat turning points. The Australia 200 index is defying this common observation. The support around 6,400 and the resistance around 6,600 provide easily defined potential turning points for the market.

The index rallied sharply between these points over the last week of August. The up move turned the MACD indicator, first quelling the negative momentum (red shading) and then crossing to turn positive well below the zero line. This is a buying signal, but the challenge is the approach to the 6,600 level. On the last trading day of August the index peeked over this point, but failed and closed below.

This puts the index at an important point. Failure here could see the index slide back towards 6,400. A break through could bring a test of the all-time high at 6,876. The next few sessions could be critical in determining the near term direction for the market.