A Tale of Two Cities

These two charts could explain the indecision in the All Ords. The top chart is BHP for the past 5 months. The lower one is CBA for the same time period. They have moved in mainly the same direction during that period. But during October something odd has happened. While BHP continued onwards and upwards (essentially following the DOW), CBA abruptly turned around and headed south. Other banks have behaved in the same way as CBA, while resource companies are with BHP. What's this about?

All Ords dilly-dallies

While the Dow tests April highs, the All Ords languishes 6.5% below its April high. Is the All Ords lagging or telling us not to go there? At the moment it can't convincingly shake the resitance zone (4700-4750), although it has broken the trend-line. Interestingly, after breaking the trend-line, it pulled back, touched it and then bounced off it sharply. Also, the XAO Indicator remains blue. The next post "A Tale of Two Cities" could explain the indecision - resource stocks are powering ahead while financials charge in the opposite direction - no wonder the All Ords is standing still caught in the middle of the tug of war.

All Ords closes above resistance

After nearly a month of prevarication, the All Ords finally closed above the upper range of resistance - not to mention having clearly crossed above the down-sloping trend line. Needless to say this is a good sign for those of you holding long positons. The old resistance should now act as support and there's now not much to suggest the market won't reach 5000 or so. That should take about a month from now. If there is any change in that view I will let you know.

Resistance holding on All Ords - but will it last?

So far, the resistance level (4700-4750) is holding back the All Ords but will the 'levee' hold the 'rising waters'? Time will tell. Here's an updated chart. Keep in mind that the XAO Indicator is blue and there have been a number of changes to the indicator in recent times. That tells me that if the All Ords were to break upwards it could break hard and fast - 5000 would be the next stop.