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19/11/17
12:56
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Originally posted by Martin Gifford
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"A good trade would be waiting for a breach of last week's high and riding it up to the pre-GFC level of 6800 in 2007. The US markets are well above their pre-GFC highs so Australia might have some catching up to do.... Also the US markets do seem overbought so a correction might be likely."
Your chart shows extreme reactions to that 6,000 line back in 2008. Then the reactions to it softened in 2015 and 2017. So it looks like a break upwards is possible, and the 6800 target is logical. But as you suggest, we might be late to the party. Are we too late? If the US has a big pull-back, then we won't get to 6800. Also, China is a worry with its move to cleaner energy. They have a glut of iron ore and coal demand can reduce. Because of these doubts, I don't see ASX200 doing too much. Maybe 6,200. However, the guy from HML said global markets are a long way from the top, so if the rest of the world continues to rise, we might follow to some extent. Note that US markets are still in a strong uptrend on the weekly charts, and the recent pullback has been very small - just three small candles on the S&P500 weekly, and four small candles on the DJIA.
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Yep no sign of a top in the US markets just yet. Was trading the NASDAQ on Thursday and it just seems any sort of dip is seen as a good opportunity to buy right now. It might feel irrational but we'll just have to keep riding with it. Agreed, if the US market continues upwards ASX should peak it's ahead above 6000 once more and then it should get interesting.