Sentiment has moved to the downside

June 7th, 2011  |  Posted in Share Market

By Peter Spann

The positive sentiment that accompanied the market in March and April seems to have evaporated and the Australian markets are following the US down. 

Concerns that the US economy is faltering have pushed markets lower over May and June with considerable falls in the last few days. 

The biggest weight on the market seems to be disappointing US jobs data which is sending shock waves through the economy.

Indications that China is starting to slow have also tempered any enthusiasm for gains and gold and oil are pushing new highs. 

Next strong support on the All Ordinaries is around 4610 with blue sky down to 4360 and around 4200 being the next strong support. 

Retracements of 10% to 15% every now and again (taking us down to around 4300) are healthy for the market and good for investors who can take advantage of bargains. 
Anything stronger may indicate a more protracted bear market.

This type of oscillation is normal after such a huge fall in the market that we experienced during the GFC and it will take a number of years for the market to go back to stable upwards trends. 

This can be scary for some investors but if you consider it “normal” then you are better able to deal with the ebb and flow of the market and grab bargains when they occur.

And there’s nothing wrong with that!

Important Information

Peter Spann is a representative of Excela Equities Ltd (ABN 17 010 763 041) and Freeman Fox Pty Ltd (ABN 47 062 481 378), holders of an Australian Financial Services licences (AFSLN 246510 and 220622 respectively). This general information is provided by Freeman Fox Pty Ltd. It does not take into account your investment objectives, financial situation, or needs.

Information contained in this update is obtained from various sources. The changing character of markets requires constant analysis and may result in changes. Past performance is not a reliable indicator of future performance. All investments contain an element of risk. Actual performance will be different and returns are not guaranteed. While information in this update is given in good faith and is believed to be reliable and accurate, Freeman Fox gives no warranty as to the reliability of accuracy of the information, nor accepts responsibility for any errors or omissions of third parties. Opinions expressed are subject to change.

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