Morning Report Wednesday 10 December 2014
I am buzzing this morning with so many ideas flying around in my head after only two espressos, that I thought the best report would be a snapshot of all my thoughts today. Please excuse the information overload, but all very relevant at present.
Market volatility is clearly increasing with 50-100 point swings in the ASX200 becoming common place. This degree of increased equity market volatility is of often an indicator that a major market turn is approaching. As you all know, I believe this is a top that will see a +2000 retracement in the DOW.
• I believe the local market will likely bounce today, ideally I will be liquidating more of my portfolio around the 5500 area in the ASX200 – see chart 1.• The German DAX aggressively pulled back to our target areas last night, mainly on Greek concerns. I am now targeting a strong “blow-off” rally, ideally to sell around 10,500 – see chart 2.• The US Indices remain solid and my targets remain around 2% higher in the major indices, prior to a 15% correction – see chart 3. Interestingly last night, the Russell 2000 (small cap Index) that has lagged all year (Dow is up 7.4% for the year and the Russell only 1.9%), was by far the strongest performer last night, playing catch up, another sign of a potential market blow off.
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