snippets - week ended 10 july 09, page-12

Hi Folks,

I'd like to expand a little on my previous post - and give some added weight to it.

The Upside Volume to Downside Volume today was extreme. I noted that in my previous post.

Well - if you look at the Trin ((Advances/Declines)/(UpsideVolume/DownsideVolume)), the usual intrepretation is that if you get a very bearish reading - that is a contrarian signal to reverse positions at least in the short term.

However, today, we had the situation where the 5-Day Average of the Trin reversed from "very bearish" to "very bullish" in ONE DAY. Such a reversal is extraordinarily rare on this indicator in the Australian market. Extreme readings are confirmation of that reading rather than a signal to adopt a contrarian position.

This appears to be a game changing day.

I'm still cautious. Volume was low. But if the market rises with a rising volume - that will be confirmation.

Cheers
Red

Cheers
Red