Quick Comments, Monday, 14/12/09

First, from Quantifiable Edge, This week is options expiration. Over the last 25 years December options expiration week has been the most consistently positive week of the year for the SPX. . . . The bullish tendencies over the last 25 years have been exceptionally strong. . . . not only do you have strong indications that this upcoming week carries an upside edge, but also out as far as 3 weeks.

Today saw a big spike on the Australian market which started at about 3.20 and took the XAO up over 39 points from being down -22.6 points to being up +16.8 points. Extraordinary.

Most people put this jump down to a bail-out by Abu Dhabi of Dubai World.

American futures are currently up about 90 points.

OK - that's all the exciting stuff.

Let's get down to some figures.

Today was a low volume day, less than one billion shares traded, while the 50-Day Average is about 1.34 Billion. (And the 50 Day Average has been steadily dropping since August.) So, there's not a lot of conviction there.

The sector/sub-sector to benefit from action today based on volume was XXJ (Financials less Property Trusts) with a volume today 1.2 times its 20-Day Average. Despite this, XXJ ended flat on the day, up just 1.2 points at 5349.6. But from the low of the day to the close, the index jumped +1.26%. Quite a reversal.

The Advance/Decline Ratio today was bearish at 0.89.

The Small Ordinaries and 50 Leaders were level pegging, both up +0.4% in line with the XAO, up +0.4%

The Defensive Sectors were the best performers today: Consumer Staples +1.4%, Telecommunication +0.9%, Utilities +0.8%, and Health +0.6%. Health was equalled by Materials and Industrials; but generally the Defensives had the better of the day.

On balance of all those factors, despite the spike high late in the day, the general tone of the final results favour a bearish outlook.

Tomorrow may depend largely on whether the spike high on the Aussie market and the American futures is just an over-reaction to the Dubai events, or the start of something bigger. If American can sustain that burst during tonight's trading, then our market is probably a good medium term bet. We shall see.

I'll have some further comments later tonight when I do some more analysis.