Today knocked the nascent uptrend dead in its tracks. XAO down -1.26% while the ASX200 (XJO) was down 1.37%. The volume was relatively heavy although less than the past three days.The Nikkei today was down -1.76%.
(For the past eight years, the Nikkei and the Australian market have had a fairly close correlation.)
Providing a glimmer of hope for the bulls - the Small Ordinaries was down -0.89%. So there's some optimism there (not much) in market breadth compared to the major market indices. A quick eyeball of the two charts above (XAO and XSO) shows that the Small Ordinaries fared better today than the XAO.
Advancing Volume/Declining Volume ratio was better again, 0.89:1. That's bearish but only slightly.
No doubt the uncertainty in the Middle East and, particularly, Libya, added to the pessimism today.
Today's action seemed to me to be a bit overdone. But if the low of four days ago gets taken out decisively - then I might have to reassess. The low of that day (4876) is right at an important support level (see dashed line). So, if that breaks, we might be seeing a waterfall down.
Good luck
Red
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