An interesting article in the Australian titled:
"Don't miss out by waiting for a recession "
It's a subscription article so I won't copy and paste however, the title tells the story.
MNB is at times very illiquid and the sp is easily pushed down on fears from just a few investors which can give us a larger than expected correction. The sp can go down even when global sharemarkets are holding up as has been the case over recent weeks.
While I don't believe markets are always right, I think it's far more likely that the huge pool of investors that drive global sharemarkets are much more likely to be right, especially over an extended period, than a few nervous MNB investors over a short time frame.
Right now the US markets continue to build on strength that began around 8 months ago while Mnb has corrected for a little over a month. Mnb did have a big rally to 17.5c so a correction was always likely but I think it's now very much overdone as is often the case with smaller volatile stocks because so many investors always seem to look for reasons for a falling sp and convince themselves to sell, often believing that someone else must know something. There doesn't need to be a fundamental reason for a sp to correct but those that sold will think they were right as the sp falls further. Selling feeds on itself - until at some point that stops and then the recovery can be swift.
According to the article in the Australian, the current annualised rate of inflation is down to 3.6%. While still above the target rate, that's a very big decline from the high that was close to 10% late last year. The article also states that the US Labour market is proving much more resilient than consensus forecasts had predicted and that fears and warnings of a big drop in corporate earnings are overblown and therefore we could assume were overly factored in to the sharemarket. I think that larger stocks have held up better than small because they are less prone to the fears of retail investors.
I think those fears of smaller retail investors in MNB have created another unexpected bargain and it probably won't last long at all. It could change very abruptly as soon as off takes and/or funding is announced. In fact, Friday might have given us the low point. Anyone watching over the last week will have noticed that sellers selling down into the bid have then quickly built up at that price. Then sellers would then sell down to through next level and build up there again before selling down through the next level again and so on. On Friday that changed. Sellers sold down through 12.5c and then through 12c but then buyers came back in at 12c. Sellers sold through 12c again multiple times through the day but the buyers kept building up again at that level and finished the day with buyers steadily building their numbers at 12c. Mnb was then able to close at 12.5c. That changed the pattern of sellers building up at a level and then selling lower. So I'm seeing that as an indicator that 12c could be the turning point.
I think the title of that article in the Australian might be very appropriate here;
"Don't miss out by waiting for a recession "
https://www.theaustralian.com.au/business/wealth/recession-is-widely-tipped-to-dampen-wall-street-but-so-far-its-nowhere-to-be-seen/news-story/d7567e77fd2e99c4d9a2fa0cb6ec3691
