redback report, week ending 7 december, 2012, page-6

Hello Brighter Spark,

I agree. I've commented several times in the recent past on the problematic market structure in the Australian market. It's indicative of a late-phase cyclical bull market. Next phase is bearish.

It's not, however, a particularly good timing tool. Understanding of market structure provides the context for decision making.

Still plenty of opportunities out there.

The big worry now is the outperformance of the Defensives and Financials. If they start to roll over???? It could mean switching into the resources sectors. Watch those. Or it could mean that we're starting on a major bear leg. If there's no significant improvement in XMJ and XEJ, then we're cactus.

The good performance of the European stock markets (particularly German and French) suggests that the European problems might be coming to an end. Stock markets are predictive of economic conditions - they don't follow.

Redbacka