I don't usually do a blog on Friday because I spend so much time preparing my weekly reports - and the summaries are posted here late in the week-end. But I'm making an exception today because of the precarious position of the markets and what I think will happen. And I'll be brief.
Heavy selling today saw the XAO fall over two percent on the highest volume for over a month - 18/12/09.
The market finished at the second last major horizontal support level - the 4600 area - the late Nov 09 Low. Only one more major support level (about4500) before the abyss.
I'll be surprised if this wasn't a selling climax today. It could, of course, keep going lower. The market can do anything it likes.
The Down Volume today was the highest since this major rally began after the June/July 09 correction. (See second graph above). It should be remembered that total volume on the XAO was nowhere near the highest for this period. So - this looks very much like last gasp panic selling.
So - if we get further selling on higher volume that would take us down below the 4500 level.
I'll eat my panama hat if that happens in the next few days. (Of course, I wouldn't eat my panama hat - it is far to precious for me to do that. But you get the idea. :))
Cheers
Red
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