Where to now, S&P/ASX200 touched 4801 this morning

What’s next?

That’s the question top of mind, as investors revisit portfolios and traders returning to desks after the holidays, to a buoyant market. so far this month to 21 Jan 2013, the XJO has returned 3%.

4800 level of the XJO is a level not seen for 2 years.

Last time we were at this level was late Jan/early Feb 2011

Let’s look at the market’s volatility in Feb 2011.

The XVI then was 16%, after touching a low of 12.5% 2 months before (Dec 2010).

This cycle, same level on the XJO, but the XVI touched a low of 10.5% (last Thursday).

Points to note:

– since 10.5 last Thursday, in the last 4 trading sessions, the XJO has been staying above 11%. Volatility has been trending up. Not a signal to sell the market, but indeed, investors are more vigilant as they come back and LESS complacent.

– the VIX index in on the CBOE was at an all-time low on Friday as well 12.5. but has not shown the trending up we have seen locally in Australia.


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