This little puppy is ready to go to sleep. Will it fall out of bed? I dunno. But the next couple of days should tell.Here's one tell-tale sign: the XAO today was up +0.6%, the Fifty Leaders were up +0.8%, the Twenty Leaders were up +1.0%, Small Ordinaries were up just 0.2%.
That's a flight to quality, risk aversion is raising its head once again.
Next, let's examine the 50-Leaders. Yesterday, 70% of them were above their 10-Day Averages. Today, 66% of them are above their 10-Day Averages. So, even on a moderately strong day, with a flight to quality, the number of blue chips above their 10-Day Averages declined.
So - this was a very narrowly based rise.
Trading in the 50-Leaders is dominated by the big institutional investors. Somewhere in there were people taking on defensive positions.
It won't take much to knock this market down a peg or two.
Does this mean a return to the lows of early July? I have no idea. But the strength of the pullback (if it occurs) should provide some clue. Shallow - then it is just consolidation. Steep - look out below. :)
Cheers
Red
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