I can’t help but feel the need to help explain why a lot of news in the last couple of days has proclaimed that the All Ordinaries (XAO) index has surpassed its all-time pre-GFC highs; but very little has been said about the S&P/ASX 200 (XJO) index of Top 200 stocks.
The reason for this is because, believe it or not, the XJO index is very close to its pre-GFC record high but has not yet managed to reach it, or surpass it – so there has been no news to proclaim a new record high for the XJO. The accompanying price chart graphic helps to illustrate this, noting the following:
- There are four price charts shown in this graphic.
- The top two charts are the XAO (All Ords) index.
- The bottom two charts are the XJO index.
- The two left hand charts show each index in late October and early November of 2007 – the pre-GFC highs.
- The right hand two charts show the price action for both indexes through July 2019 up to Friday 26th.
- On each chart, the horizontal dotted blue line indicates the all-time Highest Close for each index. The two side-by-side charts have been placed so that the vertical value (price) axis scale is directly comparable.
- In the top right chart note that the XAO traded above it’s previous record Close on Thursday 25 July, then fell a little Friday to close above the previous record Close.
- In the bottom right chart note that the XJO closed below its all-time record pre-GFC Close price, and then traded lower on Friday.
- There is no comment here about the small spike high in late October 2007 in the two left hand charts. Many people believe that the most important price for the day is the Close price, and not the intraday High.