The XJO (ASX200) remains in a short term down trend and sits on an important horizontal support line. Today, the market also bounced off the 50-Day Moving Average.
These are likely places for a bounce to occur.
The effort today was particularly weak. A small up move on low volume. Volume today was lower than any day last week, and similar to volume seen in the period between Xmas and New Year. That's not an encouraging sign for the bulls.
In my weekend report I noted that in the previous week Risk as measured by the ratio of SmallOrdinaries/50Leaders was weighted to the Risk Aversion side.
That continued today with the Small Ordinaries down -0.1% while the 50-Leaders was up +0.1%. That's not a big differential, but it does continue the Risk Aversion trend on a day when the market was up just a little.
A break below 4700 would be a pyschological win for the bears.
At the moment,the indicators are in favour of the bears.
Note - the market is in a sideways consolidation - in rough figures on the XJO the range is 4600-4800. Long-term, the market must break out of that range for a new decisive trend to assert itself.
Cheers
Red
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