"I am a South African now living in the UK and as I still have investments in South Africa I took particular note of your comments on the All-Share Index. (pasted below). I also subscribe to a charting software service in SA which as far as I am aware provides accurate fundamental data, and while it also reflects the DY as 2.35, it reflects the PE (30.09.2010) as 16.55. I know you receive your data from Bloomberg which is a reliable feed but your observation could be misleading if the Primecharts PE of 16.55 is in fact correct.

"My personal view is that the JSE All-share is expensive and that the PE is likely to contract from its current level. The DY of 2.35 also reflects that the market is expensive as you can earn 6% plus on Money Market investments. (which is no doubt supporting the Rand)

"It would be great if you are able to throw some light on these differing PE ratios."

Eoin Treacy's view Thank you for this informative email. I'm afraid I do not have information on how Primecharts calculate their P/Es but from past queries it may centre on a number of factors. Bloomberg P/Es are calculated on historic earnings but other services use operating earnings which may account for the discrepancy.

Another possibility is that Bloomberg does not report P/Es for relatively large companies in the JSE All-share such as Richemont, Anglogold Ashanti, Lonmin or Harmony Gold. How these are accounted for in the P/E calculation for the Index may also affect the outcome. I created this Excel sheet which ranks the constituents of the Index by market cap. Where available I have replaced null values with Estimated P/Es and marked them in yellow. I agree The JSE All-Share's yield is not competitive compared to what is on offer domestically.

One of the reasons we focus on price action is because it has none of the vagaries of fundamental analysis. Today's action of the JSE All-Share formed a technical key reversal, meaning that the action fulfilled the strict parameters of the formation but was not dynamic. Follow through tomorrow would confirm near-term resistance in the region of 30,000. However, a sustained move below 28,000 would be required to question medium-term upside potential