be alert ... not alarmed ... and have a plan

Hmmm ... the Market has moved almost upwards almost exponentially since Mar09 and with every new high the clamour of the BEARS gets louder and louder.

The S&P500 at 1062 is certainly OVERBOUGHT and currently driven by momentum but claims it will tank to 400 is a tad hysterical.

Have used a cluttered XKO chart (S&P ASX300) to demonstrate the salient points and the case that whilst consolidation is occurring, albeit positive returns being pushed by momentum by the tide of cash from the sidelines, that companies are MAKING PROFITS !!!

Worth noting that in the US the 'normalising' of equity returns is a major foundation block of Govt GFC strategy and this wealth rebound could see the major retest of DJIA 10000 which may well be helped by some tickling by PPT.

Also worth noting that RBA head Glenn Stevens needs to swallow hard and accept that the Labor Govt is dealing well with the GFC for all Australians and to get on board ... threats of interest rate hikes are not helpful given unemployment is unlikely to peak until well into next year and businesses/households don't deserve a kick in the guts now by what even in the best of times is only a very blunt instrument.

Comment: Glenn, is better to have a job and pay a tad more at the supermarket (inflation) than no job at all.

Chart also shows pullbacks in every month since Mar09 (except current Sept) of at least 200 points and it is not unlikely given the run-up that we could see some further consolidation in the near term.

Short term traders looking to take profits might like SUPPORT 4650 as a trailing stop ... another is the 20EMA at 4600 and those managing portfolio's should HEDGE to the next test at 4530.

Again we are planning for XJO 48-5000 by Chrissy and 5200 by June10 suggesting we feel the Market is close to FAIR VALUE.




Cheers ... tight stops.


This is only my view ... read the black stuff.