CHRIST­MAS CHEER ONLY HOPE FOR SOME FLEET­ING UP­SIDE

The Gold Coast Bulletin - - BUSINESS -

AS I ex­plained last week the di­rec­tion of the mar­ket should have been known by the end of trad­ing last Fri­day and af­ter the in­de­ci­sion on Wed­nes­day last week, that in­de­ci­sion was re­solved when the mar­ket dived last Fri­day.

There was a big move to the up­side on Mon­day this week, but it was short lived as the mar­ket took back much of those gains on Tues­day.

The only chance I see now for a rev­er­sal to the up­side is when the mar­ket moves be­low the spike low formed on Novem­ber 11 it will be a third lower spike low at close to the same level around 5,700.

These three suc­ces­sive lower spike lows can be seen in many in­stances to be the end of a sus­tained move down as we have seen re­cently.

My main con­cern is, there is no dis­cernible strength any­where in the mar­ket.

The big four banks for in­stance failed to show the strength that the in­dex did and they are a large per­cent­age of the in­dex.

Much of the gain on Mon­day could be at­tributed to BHP, RIO, and Tel­stra (TLS), stocks which also form a sig­nif­i­cant per­cent­age of the in­dex. Both BHP and RIO re­versed to the down­side on Tues­day and on Wed­nes­day they moved back up, but did not ex­ceed their re­spec­tive highs formed on Tues­day.

If TLS can hold in there and close above $2.98 to­day it will have formed a weekly pivot point to the up­side.

The prob­lem though, is for it to move higher it has to break through a long term down­trend which should prove to be strong re­sis­tance.

Although some stocks have formed weekly pivot points to the up­side, then re­versed to the down­side again, the In­dex has con­tin­ued to fall since early Septem­ber with­out once form­ing a weekly pivot point to the up­side.

I men­tioned last week that as of Wed­nes­day it was en­tirely pos­si­ble we would have seen a weekly pivot point on the in­dex, but last Fri­days move down put paid to that.

All the strength at present is to the down­side still and I am not very hope­ful we will see the mar­ket re­turn to an up­trend soon.

I think the best we can hope for is a short term re­bound be­fore the down­trend re­sumes, and we do of­ten see some op­ti­mism in the mar­ket around Christ­mas.

Late Wed­nes­day this week saw the in­dex put on a spurt to the up­side af­ter fall­ing one hun­dred points soon af­ter the open and pretty much traded side­ways un­til lunchtime then slowly re­gained about half the ini­tial loss by the close.

All very in­de­ci­sive and it will be in­ter­est­ing to see if Wed­nes­days clos­ing move is the start of the Christ­mas rush.

For me trad­ing the mar­ket over the hol­i­day pe­riod has been a bit of a trial as low vol­umes usu­ally mean big spreads.

That means there is a larger than usual dif­fer­ence be­tween the bid and of­fer prices mak­ing it dif­fi­cult to get a rea­son­able price when ei­ther buy­ing or sell­ing.

That prompts me to men­tion mar­ket vol­umes in re­cent times. Although daily dol­lar vol­umes are rea­son­ably con­stant the num­ber of ac­tual trades is kept ar­ti­fi­cially high by the very small trades and I mean trades as low as one share and lots of them.

This to me in­di­cates some sort of com­puter gen­er­ated trades be­ing made to ma­nip­u­late the mar­ket.

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