Here we sit. Knocking on Heaven's gate. Will St Peter let us in - or send us down below?A good strong day on the market today. Up +0.94% (XAO) on above average volume.
It looked to me like a short squeeze. The previous three days were a classic topping pattern, which didn't play out (at least for one day) so the shorters had to cover. I thought it was a topping pattern (and still do) and lots of people going short obviously thought so too. But they had to cover today. So we had high volume.
But the Index still didn't break decisively to the upside. We're still at the top of the range - waiting for a decisive move.
Something didn't smell right about today (besides the short-covering thesis mentioned above).
So, we had a strong (but not spectacular) day today. On such a day, one would expect the Small Ordinaries to outperform the XAO and the 50-Leaders. What did we get?
- XAO. +0.9%
- XFL (50 Leaders). 1.0%
- XSO (Small Ordinaries). 1.0%
hmmm. Not much solace there, either way.
Next we look at the mid-caps.
- XMD (Mid-caps). 0.8%
A slight negative bias there but not much.
Let's compare today with another similar day.
Monday was up 0.8% and closed at 4616.
Today was up 0.94% and closed at 4621.
UpVolume/DownVolume ratio on Monday was 3.13
UpVolume/DownVolume ratio today was 2.25.
How significant is that? I dunno. But it just doesn't look right.
What do you think?
At the moment, we now have the third touch around the 4600 area.
If it fails here - I think it's a goner.
If it goes through here convincingly. I think we've got a new bull market.
Cheers
Red
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