Fair points to all. But what's your take on simple gravity?
Please remember im not a trader (but nor am i a simpel buy and hold investor, basically i buy when a company is cheap (hence is shares cheap) and sell when a company is expensive (and hence its shares are expensive).
So any traders looking at my posts should ignore them, i have a high probability of loosing money for you (because i dont do short term market timing).
Ok to your question? Yes the recent 1 month upside has been on relatively low volume, but then so was the downside from the June high (it also traded down on low volume).
What do i make of this? Well again remember im not a trader, so i might be a bit naive in answering this question, but here are my views:
1) US summer holidays: institutional investors away on holidays (hence the big market movers, us retail investors are just icing on the cake upwards or downwards). Again consider the financial environment this time this year, compared to this time last year. THe financial environment was much more nervous even in July08(before we had the big downwards movements. Bear Sterns had just gone under, alot of institutional investors would have been taking holidays with their labtops to make necessary adjustments). 2) Institutions have been indirectly allocating their cash on the sidelines into equities through all the recent sharemarket placements (what is it now $50billion odd), so as well as adding to directly to equity positions, they have indirectly added through shareplacements. So whilst institutional investors are still too overweight cash, they are not SO OVERWEIGHT CASH, that they have to buy not matter what. I think many are slowly trying to buy dips, and the rest are waiting for confirmation of their beliefs upon the release of the June reporting season AND MORE IMPORTANTLY MANGEMENT COMMENTS RELEASED WITH THE REPORTING SEASON.
Remember there are reasons for stock market sayings like 'the stock market climbs the stairs with a wall of worry and takes the elevator down'. Like all sayings there is a grain of truth in the saying. What we are witnessing now is the LIVE application of that saying.
Again i emphasise for those of you that make your money based on short term decisions of the market, read my posts with extreme caution. I am not, repeat not a short term trader. For those that are trying to build medium term positions in the market, i am confident that over a period of 5 years you will achieve more than satisfactory investment results based on current market levels.
(20min delay)