Another flat day with the XAO down marginally by just 0.09%. Another small doji - which can be a signal of indecision or a warning of an impending reversal.

The best five performing S&PSectors were:

1. Telecommunications +2.4%
2. Health +0.6%
3. Utilities +0.4%
4. Consumer Staples and Consumer Discretionary both up 0.2%

Four out of five of these sectors are Defensive Sectors.

So there is a note of caution beginning to creep into the market.

The chart above also shows that the XAO is now at the confluence of two important resistance lines - the horizontal one from the high in mid-October and the up trend line being touched from the underside.

The two resistance lines in tandem provide a powerful force exerting downward pressure on the Index.

All of that is not enough to say that we are looking at a reversal.

The A/D Ratio was just bullish at 1.06 while the UpVol/DownVol Ratio was mildly bearish at .88. Not a lot to go on.

Risk Taking Sentiment was similarly unrewarding in giving direction with the 50-Leaders down -0.1% while the Small Ordinaries were down -0.15%. A slight bias to Risk Aversion, but not a lot in it.

So there we have it. The possibility of a reversal has been set-up - something we haven't seen for many days. Tomorrow's action will be telling. A big black candle will confirm the setup - but further up movement will see the XAO set up to tackle the January highs after taking a rest at this level 4800/4850. A clear break below 4800 (a nice round number) should be decisive.

Any way - that's how I see it for today.

Cheers and good luck,

Red