Morning Report Tuesday 23 February 2016
Good morning everyone Overview Equities have rallied strongly from the panic lows of 10th / 11th February with the ASX200 up 6.3% and the S&P500 up ~7.2%. As readers are aware, Market Matters had been looking for this low based upon various analytics but we also remain cautious about whether the US market can follow through taking the S&P500 to fresh all-time highs i.e. Phase 5 on the chart below. After going virtually fully invested into this recent weakness, Market Matters is now wearing its seller’s hat looking to slowly increase cash levels into strength. The likelihood is that equities will rally into March, or April, before turning back down as investors start to focus on the dreaded "sell in May and go away". The S&P500 is now 10% below its all-time high so we are watching closely for any triggers that would suggest it will fail to rally towards the 2200 area.
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