The XAO was up +0.05% today. And the market continues to inch toward the early November high. The market actually closed higher today than the close on 8th November.
Of interest today was the presence of risk appetite.
The Small Ordinaries was up +0.7%, while the 50-Leaders was down -0.1%. The UpVol/DownVol Ratio was 1.7. Given that today was a flat day, these readings are very healthy. It means that any weakness in the market today was due to the negative sentiment towards a small number of Blue Chips and not towards the overall market.
The Gold ETF was down solidly today, -0.52%. This weakness underscores the strong breadth in the general market.
Stocks on Life Support (RSI under 30): Fosters.
Stocks on the Critical List (RSI between 30-39.9): AGL Energy, Coca Cola Amatil, Crown, Suncorp, Tabcorp, Wesfarmers.
Stocks looking Buff (RSI between 60-69.9): BHP, Computer Share, CSL, FMG, Macquarie Group, Oil Search, QBE Insurance, Westpac, Worley Parsons
Stocks on Steroids (RSI 70 or above): Bluescope, Origin Energy.
Nothing in particular should be read into the above lists. Just stocks to keep an eye on.
If a "steroid" stock drops on high volume - short term traders might like to take profits.
If a Life Support stock rises on heavy volume - maybe it's time to dabble a little on further rises.
Those are a couple of simple "set-up" warning signals. No guarantee that money can be made. No such thing exists in the stock market.
Looking at the Slow Stochastic. It's been stubbornly up in the "overbought" range since 3rd December. A break below 80 I would consider a short-term "sell" signal.
Cut losses short, let profits run.
Good luck
Red
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