Where to from here?

Well that's two out of two. At the end of May I predicted the All Ords (XAO) 10 month run of increases would come to an end. Then Last month I said the All Ords (XAO) would do it tough in July.

As it turned out the XAO fell 2.0% for the month of July closing at 6,187.5 down from 6,310.6 at the end of June. The XAO has retreated 4.2% from the closing high of 6,456.7 reached on 20th July.

So what are the odds of the XAO making it 3 months of straight declines? During the last 10 years (which is all I have data for) it has happened exactly 4 times. The last time the XAO fell for 3 straight months was 4 1/2 years ago. From 29 Nov 2002 - 28 Feb 2003 the XAO fell a cumulative 8.2%

The worst ever cumulative 3 months of consecutive falls in the XAO in the last 10 years happened from 29 Jun 2001 - 28 Sep 2001. The XAO shed 13.2% during that time.

What does history say about the month of August? In the last 10 years the month of August has seen rises in the XAO 6 times and declines 4 times. However the last time the XAO declined in the month of August was 6 years ago in Aug 2001.

Aha so what does all this mean? Not much except for the fact that I like to play with numbers. So after all those meaningless statistics my prediction for the month of August is that we will see another decrease in the All Ords index.

There are just too many negatives out there at the moment for my liking and although the markets have started to price some of those in I think they have yet to fully get their head around the current meltdown in credit markets.