Market Comments, Wed. 02/12/09

The market opened strongly today, the XAO was up over seventy points soon after the open.

It then drifted slowly lower all day to finish up 43.6 points or +0.9%.

There were no really obvious discontinuities internally in the market. The Materials Sector was the best performer, up +2.1%. The Telecommunications Sector was the second best performer, up +1.3%. The only sector down was Consumer Staples, down -0.1%, once again weighed down by a poor performance from Woolies.

The Advance/Decline Ratio was in line with the rise in the Index - 1.6. This is about what one would expect with a rise like today's.

We've now had three up days, and as can be seen from the above chart, the XAO is now at resistance. That's its first real test. A break above that would be bullish. The market has a habit of pulling back after three or four up days. So tomorrow could be crucial for the short term future of this market.

Also notice the DMI/ADX. The DMI + & - are twining together, and the ADX is below 15. This is indicative of a non-trending market. The MACD is confirming that - it is flat lining around the zero mark. Although the market has had its ups and downs it has basically gone nowhere for five weeks. A big move is coming shortly. A break upwards here would suggest further big moves up. A move lower would mean further sideways consolidation until the recent low is broken to the down side.

Let's see what tomorrow brings.