redback report week ended 26/11/2010, page-4

Hi Kacy,

Thanks for your suggestion.

I find it implausible when one considers the numbers involved.

Over the past two months, the average daily Vol of telco shares traded is 71M per day.

The average daily Vol of Advances plus Decliners is 2276M. As well as that a large number of shares show no movement (often around 1/4 to 1/3 of total volume traded).

So the telcos represent a small fraction of the volume traded. And not enough to distort a broad retreat into a broad advance.

I think the best interpretation is that big money is not behind a broad retreat in the market. The retreat in the market is narrowly focussed. When breadth is still good, the market usually recovers from a narrowly focussed retreat.

Cheers
Red