Caketin I have been watching this trend. I think its something...

Caketin I have been watching this trend. I think its something to do with market cap. When its a lot smaller it seems to have a life of its own often not reacting in the same way but say between $150 million all the way to above $700 million. I think its the smaller ASX 300 or thereabouts list.

I compared PGC to AJX , NAN , OVH, SRV to CBA. It was interesting to run it over a month, 3 months , a year , 3 years and 5 years then over 1 month. It was very interesting, OVH had some very positive news in the past month and the smaller the market cap the more it seemed to respond to news...

SRV , NAN and PGC are all tightly bunched over the past 5 days - all dropping between 5% to 8% CBA however did better virtually not moving around 0.5% up. Both AJX and OVH were positive or 0% having had some good announcements. OVH the leader at 2.46% up.

Over 1 month CBA was suddenly the leader up 9.5% whilst the rest are bunched all down from 2.34% to 8% Whilst the absolute numbers are different the same trend exists over 3 months.

Over a year the spread is very different PGC up 27% with CBA actually down 3.5% NAN was the huge winner up 84% AJX and OVH were down a lot at virtually the same 30%. SRV tracked CBA around the 0%.

Over 3 years NAN and AJX were huge winners up 249% and 307% and the thick middle OVH , PGC and SRV were all up between 80% to 108% with CBA only up 3%

After checking it became clear that at the smaller end moves very much with how tightly held the share is and information flow. What counteracts that is when the market is wobbling lack of data flow can be more negative if you plot the positive information it can actually be ignored - in the main OVH and AJX have had that in the past month whilst the day after the announcement has had the bump up.

Personally I think the volatility at the moment are those freeing up cash as they are all looking for this market to represent a short term top. So any good announcement does not stick but is a step up approach - so my take is at the moment its driven by short term information flow. You could add BYL to that list - turnaround profit news up around 50% and then back to being up only around 18% a week later ...

I dont know if we are USA centric so that we are all nervous as the Dow is topping new highs and we all expect it to pull back after the first rate hike sets in...

What is funny is that you should compare the DOW to the all share here over 5 years we have been murdered around a 30% difference. So my take is we survived the GFC in corporate terms better and have been okay but expectations of problems keep pulling all companies down whether or not we are in mining... So I dont get the disconnect as our rates of interest are still much higher and our companies are paying interest at 5% and theirs are in the 2% thats 150% different yet we are not performing well.

So to summarize - I think that this is a stepped game - Good news bumps but does not stick but actual hard news like half years and full years , less so AGM news has a step up in share price but the market downs amplify the shares in this thick middle and the big boys are probably being valued by way of their international share price which has pushed them higher or stopped them reacting as much.

For PGC - , my view - the chart is broken but I think it will hold above 80c whereas a few in middle September it was still not able to hold 80c. The next real news - the half year will see where it sets the next step. I think it will be up and hopefully we will finally breach the 90's and stay there.