Stress Management - Thursday, page-2

Weird Day. Wednesday Evening Liqueurs. 4 November, 2015.

XJO up marginally up +0.06%. At its best, XJO was up 74 points, but finished up just 3.1 points. That's one helluva reversal. Volume was above average.



Now, if this type of reversal, on high volume, had occurred at the top of an up-trend, registering overbought on the indicators, I'd say we are likely to see much lower prices.
But this big reversal has occurred following a strong up day after a six-day down trend. That's not an analog.
So, I'm treating this reversal day with some suspicion.

Is there evidence to suggest that this reversal is not all it seems? Simply, yes. The Advance/Declines Ratio was 54.5%. The UpVol/DownVol Ratio was 58.3%.

Almost all sectors in the market reversed, but some reversed a lot more than others.

Here's the Daily Sector Performance Chart:



We can see here that things were all over the shop. Some were very strong, some were flat (notably Financials, Energy, Industrials and Info.Tech), and a Telecomm was very weak. Make sense of that!

Of particularly interest was action in XGD (Gold Miners). Gold was down solidly overnight -1.48%. Such a fall would usually generate a significant fall in the Oz Gold Miners Index (XGD), but it went up +1.9%. It is not unusual for the Gold Mining Stocks to pre-empt a rise in the Gold Price. So we may be seeing that situation here.

Here's the XGD chart:



XGD fell initially on the basis of the fall in the overnight Gold price. It hit the support of the previous day's low and the 200-Day TMA and bounced quite strongly. That looks like a "buy" signal to me.

RB