Market Comments 29/12/2010

The market was basically flat. The results for the two major indices were: XAO +0.07%,

XJO -0.04%. Indicators (MACD, RSI, Slow Stochastic) are rolling over or turned negative.

The market today was stronger than those results appear. A dampener was placed on upward movement by substantial falls in BHP and Rio (see chart of BHP above).

Why did the big miners fall? Well, according to Comsec, because there was no lead from the London Metals Exchange which is still closed for the Xmas break. huh? The big miners fell substantially because there was no lead? Shouldn't they have been flat with no lead?

Those who know me well, know that I often disparage the "reasons" given out as to why the market did this or that. But this one - "no lead" - is a CUK (Classic of the Unbelievable Kind).

Surely they could have come up with a better one than that, like, maybe, "The big miners fell over concerns that the Chinese economy may slow after another official lift in interest rates."

Maybe the only person left at the end of the day to write up the Comsec daily report was the cleaning man?

Ooops. I'm back. I was off with the cleaning man there for a while. Let's get back to the market.

As I was saying, the market was a bit better than first appears.

• Small Ordinaries was up +1.1%.
• UpVolume/DownVolume ratio was 2.65:1. That's strong.

On the negative side, the best performing S&P Indices were Health +0.6% and Utilities +0.6%. Both of these sectors are defensive sectors. Possibly a flight from the big miners to relative safety.

Here are the volume statistics from last year for the Xmas Period:

21/12/09			921,350,449
22/12/09			755,348,561
23/12/09			691,908,713
24/12/09			433,666,288
29/12/09			644,286,939
30/12/09			475,488,336
31/12/09			275,405,884

Here are the volume stats so far for this year:

21/12/10			1,117,699,386
22/12/10			909,237,851
23/12/10			918,219,132
24/12/10			748,957,638
29/12/10			810,439,567

You can see that the market volumes are much higher this year than last year. And the market is not going up. Last year, the market rose more than 4% from 21/12/2009 to 29/12/2009.

There's a lot more "effort" this year, for no result. This looks like distribution to me.

But - I could be wrong. Until the chart actually falls, there's no point in pre-empting the market. You could be giving up further substantial rises.

Well - that's just my opinion. You might have a different one.

I'll leave you to make up your own mind.

Good luck

Red