Market Comments. 24/5/2010

The XAO was up 2.0% today - but it was a strange day. And I'm not sure what to make of it.

On the one hand it bore out expectations that a continuation of Friday's big reversal would occur.

Volume in the first hour was a little above normal, but the day's final volume was below average. The market basically went nowhere in the first hour, then went up 2% from there - but on lighter volume. hmmm.

Next. UpVol/DownVol was 1284Million/283Million.

The Up Volume was fairly standard for a good up day. The down volume was well below average.

So - did someone or more than one try to hold the market down in the first hour - and then just threw in the towel and went to the beach? That down volume is the lowest since the Xmas period when most traders are ... yes, at the beach.

Today's move up was more due to a lack of selling than any strong buying push.

Given that most experienced hands were expecting a push up for a couple or so days (or at least I was), are sellers holding their hands for a short while before stepping in. A case of, "come in suckers - we'll nail ya in a coupla days". Or was today just an anomaly?

Let's look at a couple of other pieces of evidence.

The XAO was up 2%. The 50-Leaders were up 2.3%. The Small Ordinaries were up just 1.5%.

So - risk aversion was the order of the day, while risk appetite took a back seat. That doesn't support a big bullish move up.

We shall see.

Looking at the chart presented above. It shows the XAO for the past two trading days. The candles are five-minute candles.

The second half of today was a rising wedge - which is usually bearish.

So - we could see this mini-rally peter out tomorrow.

Cheers

Redb