The gneral market (XAO) recovered its losses of yesterday plus a bit extra. Volume was reasonable.The Index is now back in the "zone" - that area at the top of the market in early November.
The Index continues to respect the 13-Day Moving Average. That looks like being a key. A break below that would probably be a death knell.
Yesterday's move was pessimistic. If it had been down 1% on high volume, I would have said that the market was in for a retracement. But it was only down 0.5% on low volume. If a retracement was on the cards, follow through selling needed to occur today. It didn't happen.
Interestingly, the Slow Stochastic didn't recover today. It might tomorrow, or it might not. At this stage that's a big negative for this market.
Event stocks today. I've got two. (Yesterday Santos was an obvious - but the media was all over that one.)
Here's two to look at - for totally different reasons. (Note - I only talk about the big blue chips in this section. Penny dreadfuls are for others to talk about.)
First, IAG.
Up +3.6%. A new 20-Day high. Volume highest since early November. Wide range day. Range was 19 Cents. Stock closed at 3.90, up 14 cents on the day. A good day's work for the punters.
Next, TOL.
Down -0.17%. New 20-Day low. Lowest price since August. Narrow range day. Range was six cents. Stock closed at 5.82, down just one cent on the day.
So, it is clear why IAG is an "event" stock, up strongly on good volume.
But TOL? Down just a bit on big volume.
The key is the position of the stock in the trend. TOL has been in a long down trend.
Now, we find a narrow range day on high volume (highest since late October when it fell heavily).
Think about the psychology of this. It looks like some people were selling this stock furiously, while others were buying it furiously. The range ended up narrow and the stock price hardly budged.
Who was buying? Smart money?
Who was selling? Dumb money?
I'll leave that with you.
I think both are worth watching in the near term.
Good luck
Red
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