A NEW test on 10,000 failed to hold yesterday despite local market support. Optimism on overnight buying in the United States pushed the December future through 10,000 to a high of 10,015 intra-day. The contract failed to hold the level and slunk back to 9,990 on the close. On the day the contract was up 100 points and a premium over the cash of 63 points. The heavy premium over the cash throughout the day was taken as a positive signal by brokers with the growing expectation 10,000 will be broken today. January futures rose 105 points to 10,040, a premium over the cash of 113 points. Volume was modest at 13,624 contracts. The activity was split with 12,700 contracts in December and 924 in January. In index options there was modest activity with a total of 2,551 lots traded. Jardine Fleming said bulls dominated the options market and out-of-the-money calls were active. 'Some traders bought December 10,200 calls while those expecting the market to peak at 10,600 in the coming months bid for March 10,000/10,600 two by one call spreads,' Jardine Fleming said. Despite the apparent bullishness in the futures market, implied volatility kept falling to about 16.5 per cent. In the past implied volatility, a measure of investor expectations in the market as reflected in option prices, has also reflected investor sentiment elsewhere in the stock and futures markets. A falling implied volatility appears to be out of line with futures sentiment, especially given the big premium in January futures over the cash. Derivatives traders argue there is no direct correlation between implied volatility and futures premium or discount levels. The premium in the futures directly reflects bullish opinion for the end of the month and for the end of January. Implied volatility is a technical yardstick used by professional investors as a comparative measure of value between two similar derivatives. Implied volatility can fall in the face of a rise in futures premium because implied volatility is not only a measure of value and investor expectations but it also reflects the rate of change in value expected ahead.