Market Comments. Thursday, 3/12/09

After another choppy session today, the All Ordinaries finished up +0.3%.

No surprises were seen in the market details. The Advance/Decline Ratio was up modestly at 1.26. The Small Ordinaries did a little better than the Fifty Leaders, which is bullish. The worst performing Industry Sectors were the Defensives (Consumer Staples, Health, Telecommunications, Utilities) which were all marginally negative.

Gold Miners, however, finished on a negative note (down -0.3%) even though Gold has been setting new records. The Gold Miners often lead Gold, so Gold could be in for a consolidation or retracement after a stellar rise up to US$1223.

Looking at the chart above. We must presume we are starting on a new leg up in the bull market rally. The XAO has broken above the down trend line. The MACD is above both the Zero line and its signal line. Both the Williams %R and RSI are giving bullish readings.

We're now into one of the strongest months of the year (December and January are the two best). So this looks like the start of the Santa Rally.

QUICK UPDATE, THURS. 22/10/09

The market (All Ordinaries Index) was down modestly today, -0.6%. Nothing dramatic.

The Advance/Decline Ratio was in the red at 0.81. That's in line with a down day.

However, UpVol/DownVol was in the green at 1.3. That's a non-confirmation of the down day.

The 20-Day NewHighs/NewLows (50 Leaders) were 8/2. Another non-confirmation. This appears to be in sync with the UpVol/DownVol figure.

The 50 Leaders were down -0.5% (outperforming the XAO).

The Small Ordinaries were down -0.8%. So there was some risk aversion in the market today.

The currency dropped intra-day, but was still obstinately above 0.92 USD at the time of writing.

Overall, one must still conclude that this is still a minor pull-back in the ongoing bull market.

Market Update, Wed., 14/10/09

Good day today. XAO, +0.9%%, finished at 4834 a new rally high.

Energy was the strongest sector, up +1.6%. Meanwhile the hapless Telecommunications Sector was down 0.8% - the only industry sector down today.

Breadth was positive. Advance/Decline Ratio: 1.75. Strong - but nothing spectacular.
Advancing Volume/Declining Volume Ratio: 2.66.

The market is overbought and heading for a climax.

% of 50 Leaders above:
10SMA - 82% (overbought)
50SMA - 86% (overbought)
150SMA - 98% (Golly Gosh)

Can we see 100% above the 150DSMA? Highly probable.

The Advance/Decline Cumulative Total had another rally high today. But the following stats suggest that we're in shortly for at least a short term retracement:

Current 5DaySMA (Simple Moving Average) of % Advances/Declines = 61.4%.

The 5DSMA of ADV/DECL% has been above 60% six times since mid-April.

Five of those six times the market declined soon after for at least a couple of days.

The odd one out was in Mid-July which precipitated the current rally. That occurred after a significant decline and was part of a 13-Day consecutive run-up in the A/D Line.

Given that the current figure is occurring at the top of a rally (as in all but one of the cases) - not the bottom - the probabilities lie with a retracement of at least short-term duration.

The June-July correction was precipitated by a 5DSMA % reading of 60.3%.

Meanwhile, the Ozzie Dollar continues to rampage upwards - currently at .9129USD.

While the exchange rate continues northwards, our stock market will continue to do the same.

The On Balance Volume Chart is also showing a negative divergence to price suggesting that this rally is running out of steam.