I am guarded about the next few days. I think many in the US are considering this to be either the "technical correction they had to have" and will not be buying until it has fallen 10% or more, to about 12,600, and others see this as a bearish trend and won't buy regardless. Given that this seems to encompass the majority view as I gather it from looking at US trading sites and news reports, this will become self-fulfilling.
There is little doubt the ASX will take a hammering on monday - like sheep we are with our American shepherd, who occasionally does the kiwi thing and F#^%s us right up.
I expect to see either a flat/slightly down on the DOW monday or even bigger falls than the last two days - what governs this will be early sentiment and economic news. I read the US sentiment as very bad at the moment, and any bad report - even from a smallish sector could trigger a stampede for the door. This is not all bad - lots of sound stocks will be very oversold and give excellent value.
I think it is safe to buy solid near-term producer midcap stocks or blue chips that have already been very oversold. BHP presents good value ($40 within two weeks). Oversold solid near term producers include AGS and MMX.
TRF and CFE also look to be relatively good value though higher risk if this turns into a real correction.
I almost forgot GDN - will be a fair buy when it hits 0.1c some time on Tuesday.
ASX Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
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