one day at a time thursday, page-61

Hi Folks,

This post is not a reply to any specific post - or intended to get into the enjoyable personal banter so indicative of the XJO thread.

It is just one of my usual outa left field submissions. I hope it is of some use.

Today some of the most important ratio charts that I watch took a turn towards the bearish.

Gold/Energy is now in a short term uptrend reversing the downtrend in place for about 70 trading days.

The XXF:XAO (Financials without Property Trusts:All Ordinaries) ratio broke solidly downwards and is now below both the 65DaySMA and the 170DaySMA which have uncharacteristically been travelling in tandem.

Today showed a lot of churning - with most of the defensives being on the negative side of that churning - particularly Health and Consumer Staples.

However, Financials less Property Trusts were also decidedly negative.

Energy was to a lesser extent negative but none the less on the negative side. Materials were the winners.

Out of all of this, I think the drop in the XXF:XAO ratio was the most important. If the Materials sector takes a hit, this market is cactus.

The all important Health:Energy ratio is still not showing any decisive reversal change. I'm waiting on that ratio to switch to call this into a bearish trend.

Back around the beginning of this month, there was a resistive volume surge on the XAO/XJO (volumes reached levels usually only seen at options expiry time and the major indices dropped). That marked the start of this drop in the indices which has not yet been fully recovered. Another such volume surge, which is highly likely with options expiry coming up, is likely to be the death knell for this market if the market drops into OPEX next week.

Considering the above, the probabilities lie to the downside - but OPEX week will be the key.

Cheers
Red