Technicals | Sep 13 2016
By Michael Gable
The US markets rallied last night, but European markets were down and bonds didn't join in on the party. So our market will be up today but we doubt how long that strength will last. We nearly hit our S&P/ASX 200 Index downside target of about 5200, but with the US coming off so sharply and showing signs of weakness, we could see our index go a bit lower than that over the next few weeks.
We have included a chart of the US S&P500 Index in today's report. We have mentioned previously that there are Exchange-Traded Funds (ETF's) that can be bought to capture downside in the Australian market, and the same exists for the US market, with currency hedged ETF's listed on the ASX that can benefit from US markets going down.
The shock move last week in the US, coming as it did near the top is a sign of further weakness for the time being. We can see some support just above 2100, but the index as a minimum is likely to head back towards 2000. A more bearish scenario would see it correct back towards 1870.
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Michael Gable is managing Director of Fairmont Equities (www.fairmontequities.com)
Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.
Michael is RG146 Accredited and holds the following formal qualifications:
• Bachelor of Engineering, Hons. (University of Sydney)
• Bachelor of Commerce (University of Sydney)
• Diploma of Mortgage Lending (Finsia)
• Diploma of Financial Services [Financial Planning] (Finsia)
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2
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Disclaimer
Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
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