Market poised for consolidation
April 22nd, 2009 by Lawrence Grasso
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 7969.56 | 127.83 | 1.6% |
| NASDAQ | 1643.85 | 35.64 | 2.2% |
| S P 500 | 850.08 | 17.69 | 2.1% |
| FTSE 100 | 3987.46 | -3.4 | -0.1% |
| Nikkei 225 | 8711.33 | -213.42 | -2.4% |
| SPI Futures | 3682 | 11 | 0.3% |
| All Ords | 3,633.00 | -89.5 | -2.4% |
| Oil | 46.65 | 0.83 | 1.8% |
| Gold | 882.7 | -4.8 | -0.5% |
| Silver | 12.06 | -0.045 | -0.4% |
| Aluminium | 1398.5 | -20.5 | -1.4% |
| Copper | 4402.5 | -233.5 | -5.0% |
| Lead | 1438 | -71 | -4.7% |
| Nickel | 11470 | -760 | -6.2% |
| Tin | 11920 | -480 | -3.9% |
| Zinc | 1396 | -77 | -5.2% |
U.S. stocks rose overnight with the Dow Jones Industrial Average up 127.83 pts to 7969.56 (1.63%), recouping nearly half Monday’s losses. Concerns with the Banks receded as Treasury Secretary Geithner and Citigroup CEO Vikram Pandit, said Bank's "vital signs" are improving and they are poised to benefit from an economic recovery. Investors also focused on hopeful signs in reports from Coach, Texas Instruments, United Technologies and Delta Air Lines.
Gold was down $4.80 to $882.70 USD and oil rose 83 cents to $46.65 USD a barrel.
The Australian market today will open in positive territory with a lead from financials. The financials will bounce back today following on from the rebound in the U.S. We believe that the financials are still over bought and this rebound is only short with further profit taking in this sector on the cards.
We recommend our clients to sell calls on their financial stocks or take profits (contact your advisor for advice). As we mentioned in last Wednesday’s Market Fox we are still expecting the XJO (ASX 200) to fill a gap on the daily chart on upside at 3892. On the 17th April the market had a decent run at the gap but fell short at 3851. Keep an eye on this gap fill because once we hit this level we will pull back. With this in mind we believe resources will have a smaller pull back in comparison to the financials.
The overall view of the market is to add a small portion to your portfolio down at these levels. If we are looking at a long term investment then adding quality undervalued blue chip stocks with the ability of writing calls is the right strategy. If you have been hesitant of getting back in to the market, call your advisor today to have a chat about what stocks are providing plenty of value and growth.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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