What Happened Today?

This story features LYNAS RARE EARTHS LIMITED. For more info SHARE ANALYSIS: LYC

By Max Ludowici, Equities & Derivatives Advisor, 708 Capital

Friday + Thanksgiving in the US + Labor Thanksgiving in Japan = $2.4B total turnover. Pathetic! Even a strong lead from the US futures all day failed to spark investor interest in our market. We ended the day down .1 of a point or 0% to 4413. Our trading range was just 12 points and after our relatively strong move yesterday, the day traders appeared to take a breather.

A lack of meaningful leads and South Africa’s chase of Australia’s 550 in the second test was enough for investors to throw in the towel early on. There are too many unanswered questions offshore for investors to justify taking a position in our market. Yesterday’s gains were somewhat of a surprise so at least we managed to hold onto them. It would be great to think that the 5% pullback from the high 5 weeks ago of 4581 to the low last Monday of 4334 was the correction we were waiting for, as confirmed by our 60 point retracement this week but I think it’s a bit premature to take that view.

Clouds in the form of a resolution to the fiscal cliff issue and an outcome on Greece’s bailout package are still hanging over our market and this week’s positive move was only a response on hopes of a cliff resolution to last week’s slide backward on these same concerns. The cliff situation is complex and serious deals will need to be cut between the Democrats and Republicans. I just cannot see this being tidied away in a couple of meetings and the market is telling us we should prepare for more sideways action.

BUT it really isn’t all doom and gloom. China’s first PMI print above 50 for the first time in several months is genuinely positive and the housing price and sales data in the US is continually improving (remember recoveries begin with a rebound in housing). The yanks just need to put this fiscal cliff issue to bed so we can hope for a strong December and a better ‘13.

Price action across all sectors was mixed with the bottom feeders taking the opportunity to cover short positions in Lynas Corporation ((LYC)) up 6.7% and Fairfax ((FXJ)) up 4.8%.

DOW futures are pointing to gains of 33 points.

This article produced at the request of and is published by FNArena with the expressed permission of 708 Capital.

708 Capital is a full service stockbroking and investment advisory firm. 708 offers investment and market advice to high-net-worth Private and Institutional clients in Australia and across the globe. 708's extensive network of contacts gives its clients exclusive access to ground-level fundraising opportunities and new company listings in a variety of small and large cap ASX listed companies. 708 has a longstanding track record of generating exceptional returns for its clients. Click here 708capital.com.au/contact-us/ for a no cost consultation and portfolio review or to learn more visit www.708capital.com.au. Note: 708 Capital offers wealth management services for Sophisticated and Wholesale Investors only. We cannot assist investors who aren’t classified as Sophisticated Investors or have verified assets over AUD$2.5m.

708capital is a holder of AFSL. No. 386279

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This document is intended to provide general securities advice only, and has been prepared without taking account of your objectives, financial situation or needs and therefore before acting on advice contained in this document you should consider its appropriateness having regard to your objectives, financial situation and needs. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Disclosure of Interests: 708capital receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. 708capital and its associates may hold shares in the companies recommended.

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