In the last newsletter I spoke about how the monthly chart of the All Ords was looking strong, but I had concerns about the level of money coming into the market. Volumes appeared low, or at least not matching the rising price action.
Things have changed and there now appears to be confirmation that money volume is matching the price action, I see this as an indicator that higher prices for the stock market are more probable than lower prices.
Sorry chart haters, bear with me and look at the one below.
The above is a 10 year chart of the All Ords in a Monthly scale, using a simple line chart, it's clear to see the break up of down trending and sideways price action, the market now searching for the old highs of 2007. Now, just one more chart, the significant one, in my opinion.
The chart above is still a monthly time scale, again of the All Ords, but over 5 years. I have added 2 volume indicators, the On Balance Volume ( OBV in Black) and the Chaiken Money Flow Index (CMF in Green). The analytical types can google those for more info, if they wish.
You can clearly see the break up of trend line resistance for both those money volume indicators, it took a while to happen, in fact the CMF took 4 years, buts it's up and away.
From a technical perspective, this is as good as it gets. Rising prices with rising volumes, suggesting buyers are committed. This years performance of the stock market, despite concerns of many, may well surprise to the upside.
Holiday and study trip.
I will be away from late April and all of May on an extended holiday and Zen study trip to Taiwan and Japan. During that time the website will not be updated with the free 52 week highs, nor will Peter's Portfolio. I intend to manage the portfolio the best I can whilst away, the exact details of that are undecided.
As usual if you go to the website you can look at Peter's Potfolio, and this weeks performance will be updated either tonight or tomorrow.