Today the All Ordinaries (XAO) was up 0.74%. The Fifty Leaders was up 0.46%. The Small Ordinaries was up 2.02%. Volume came in at almost 2billion shares traded. That's the highest volume we've seen since May 2010.The general market stopped right at the first level of resistance. Volume tells us that there's plenty of supply coming into the market, but the appetite for risk is rising.
A counter-trend rally is in the making. But it could be the proverbial "dead-cat bounce".
I'm still haunted by the drop back in April/May 2010 - and this is looking remarkably similar. Back then the market moved in three distinct phases. Down, up then down again. I showed yesterday that the weekly Slow Stochastic still hasn't got down to oversold levels although the daily chart has. That suggests that another leg down is likely before we can see any meaningful resumption of an upward trend.
I'd be looking at laying off stock as this retracement occurs.
Good luck
Red
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