weekend charting december 19, page-15

Sure was a frustrating week, not helped by some questionable management actions in some blue chips. We were expecting a launch but wasn't to be. However some things were well supported when selloffs threatened. Much different to 2008.

If you have a 50k car and it breaks down, you will likely only get 20-25k for it if you want it sold on the spot, however if you wait for it to be fixed it should return to it's value. This is how I think of the market atm. There is still much fear in the markets and you can see an example of this by the recent bond issues. CBA issuing perls at 3.4% above, ANZ 3.1% above, plenty of other examples. This is not a normal state of affairs for example NABHA floated at 1% or so above back in a normal market and now it's trading at only 76% of it's face value! It is not logical for investors to have their money in bank accounts with the rates on offer in these vehicles so it shows the general state of fear imo.

So I'd say look for the market to be higher when fear subsides. One point I'd make is that the current bearish period is similar to the "head and shoulders" crowd in July.