market Comments 10/11/10

The general market today measured by the XJO (ASX200) was down 0.87%. The volume was below average. Given that the middle of the week tends to have a higher volume, that must put today's drop in the suspect category.

The above chart shows the XJO on an hourly basis with an overlay of the Slow Stochastic.

The Slow Stochastic is at an extreme low (oversold) level.

The Index is also at a support level.

I'm expecting a bounce tomorrow - but it may not be of great significance before another down move occurs.

If this scenario plays out as I expect, we might then be looking at a significant buying level.

But that is just a scenario. Let's see how it plays out and the charts can tell us what to do.

At the moment, I wouldn't be going short this market.

Good luck

Red