Steady as she goes. 9/8/2010

The Australian market continued to make good upward progress today. The chart remains above the 13-Day Simple Moving Average and other indicators are positive.

Some evidence of risk aversion came into play today. The 50-Leaders were up 0.7% while the Small Ordinaries were up 0.6%. Not much in that - you couldn't mount a crown case on that one.

However, the Small Ordinaries tend to outperform when the Miners also outperform. The Miners were up 1.1% today - so there is some slight negative divergence there. Not enough to make a case on - but something to think about as time goes on.

The Gold ETF is looking promising. Today it closed above the 13-Day SMA. A move higher by this Moving Average would be positive. The MACD also closed above its signal line today - a big positive.

For a concerted move higher we need to see the DMI+ cross above the DMI-, it is still some way from doing that.

The Gold ETF tends to trade in an inverse relationship to the market. So, at the moment, it is hinting at future weakness in the general market - but it is by no means certain.

In the meantime - the trend of the XAO is up - until it moves down, we'll stay with our bullish assessment.

Cheers

Red