'All Ordinaries' index struggling to stay above 6,000

Back on November the 7th the Australian All Ordinaries stock market index punched through the 6,000 points barrier; presumably back on its way to 6,900—where it was when the Global Financial Crisis (GFC) hit in 2007/2008.

At the time the index made the 6,000 level there we two lines of thinking being written up in the various financial journals.

One was that now that the All Ordinaries had finally managed—after 10 years— to crack through the 6,000 barrier that it would now rapidly move back up to 6,900. This thinking was based on the view that, by and large, the Australian economy is basically doing rather well. Employment is apparently improving—if you can believe the current press—and wages, which have been sitting flat for just under four years, were about to start moving upwards again.

The other line of thought, as you might have guessed, was that the index would have trouble staying at the 6,000 level. There were even a number of forecasters prepared to predict that they did not think the index would manage to remain above 6,000 over Xmas. The thinking here taking into account Australia's massive debt load both at the government level and at the household level; along with real estate prices flattening out and even falling in some states (other than Western Australia, where they have been falling steadily for almost four years).

Well, six weeks after the All Ordinaries index managed to peek above the 6.000 line it would be fair to say is having a lot of trouble staying there. On Friday it closed at 6,087 having dipped below 6,000 several times in the past six weeks.

At this point, I for one would be reluctant to take an even money bet that the index will be above 6,000 at the close of the exchange on the 24th December.