I don't think CBA is being bought on the merits of the company. The market is being bought on the whole, but there is a fair amount of short interest from Asia selling down the miners. As the market is bought up and the miners are sold down - CBA gets bought up automatically (by arbitrage computers) and as the biggest component of the index it gets the most additional buying. I really don't think it matters 1 iota what happens to CBA or Australian banking for more than a day, it resumes the trend of the market buying.
This market buying is simply computers following what the US market has done - it is the same for just about every other Western market - with European markets trading at highs despite recessions, etc.
I feel the only thing that will change course for CBA is when US markets turn and that will occur when there is a change in interest rate/inflation sentiment. Or, there is a change in US government deficit spending (7% of GDP btw).
That change will happen eventually, and when it does, there will be a lot of downside on the XJO, and a lot of downside on the banks. I anticipate the miners will be relatively unscathed though.
CBA Price at posting:
$158.60 Sentiment: None Disclosure: Not Held
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