Market Comments 13/10/2010

No fancy stuff tonight. Just plain old trend channel. Boring. Boring. Boring.

Yeah - I know it's boring - but it works.

XAO has been in a a narrow uptrending channel for about a month.

A break lower still has to contend with solid support at around the 4600 area. If that breaks, the market looks like going a lot lower.

Seasonal factors (October effect) would suggest a test of the 4600 area.

But today's action was not a convincing day for the bears despite the reversal from earlier strength. UpVolume/DownVolume Ratio was good at 1.9:1 while Advancers/Decliners was at 1.24:1. That gives a bullish reading of 0.65. A reading less than 0.9 is considered bullish. So today's figure is quite strong.

I think we're looking at a few more days of cyclic weakness - but nothing of great significance.

If the market goes below 4600, then all bets are off.

Be patient.

Cheers

Red