ASX 200 Risk To The Downside

This story features BRAMBLES LIMITED, and other companies. For more info SHARE ANALYSIS: BXB

By Michael Gable 

The nervousness creeping into the market is still evident by the volatility being experienced. Volumes are also quite low and our market needs to double its daily volume for the rest of this week just to ensure that August’s volume is on par with 2012.  The US is fixated on when QE tapering will start, and we are already seeing bond markets jump the gun and sell off, pushing yields to higher levels. A slew of data this week could potentially put it all into perspective and cool down fears that the US is ready to start turning off the taps. One big beneficiary of this fear is the gold price, and in particular, gold stocks. They have been clear outperformers recently so in today’s Charting section, we have highlighted a couple of great trading opportunities in this space. With most of reporting season over, and the market still downgrading earnings, the focus has once again been on high yielding stocks. The flip side of this is that companies which have become expensive have shown that it is difficult to maintain their lofty share prices. In Companies & Sectors, we have covered off on a couple of these including Brambles ((BXB)) and where we think they could go from here.

ASX 200

The market endured levels of low volatility for much of July, then all of a sudden we suffered a drop of nearly 2% in one day on 7
August. When you see a market rally 10% and then suffer a large sell off at the end of that trend, as we did with the XJO, then
chances are that nervousness has started to hit the market. And that means that risk is to the downside. While the market did
recover about a week ago, that was the last desperate plunge by the “Fear of missing out” crowd, especially driven by those falling
over themselves to get into BHP Billiton ((BHP)) and Rio Tinto ((RIO)). While the market does look good in the medium term, the next few weeks could continue
to be volatile and we may see levels closer to 4900 on the XJO before it wants to resume the uptrend.
 

Content included in this article is not by association necessarily the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

After leaving Macquarie Bank's Securities Group in 2008 after many years of service, Michael has gained a highly regarded reputation in the financial services industry. As a Private Client Adviser with Novus Capital, Michael has become a popular live commentator and analyst for Sky News Business Channel’s “Your Money, Your Call” program. He is also the author of the weekly stock market report “The Dynamic Investor”.

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management.

Michael 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

Disclaimer

Michael Gable is an Authorised Representative (Rep. No. 376892) of Novus Capital Limited AFSL 238168 ACN 006 711 995. Michael Gable and Novus Capital Limited, their associates and respective Directors and staff each declare that they, from time to time, may hold interests in securities and/or earn brokerage, fees, interest, or other benefits from products and services mentioned in this website. This website may contain unsolicited general information, without regard to any investor's individual objectives, financial situation or needs. It is not specific advice for any particular investor. Before making any decision about the information provided, you must consider the appropriateness of the information in this website or the Product Disclosure Statement (PDS) or Financial Services Guide (FSG), having regard to your objectives, financial situation and needs and consult your adviser. Any indicative information and assumptions used here are summarised and also may change without notice to you, particularly if based on past performance. Michael Gable and Novus Capital Limited believes that any information or advice (including any securities recommendation) contained in this website is accurate when issued but does not warrant its accuracy or reliability. Michael Gable and Novus Capital Limited are not obliged to update you if the information or its advice changes. Michael Gable and Novus Capital Limited and each of their respective officers, agents and employees exclude to the full extent permitted by law, all liability of any kind, in negligence, contract, under fiduciary duties or otherwise, for any loss or damage, whether direct, indirect, consequential or otherwise, whether foreseeable or not, to the extent arising from or in connection with this website.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

Click to view our Glossary of Financial Terms