Market cools after a good run
What Mattered Today
The market cooled off slightly today after a pretty frantic few sessions for Aussie stocks - with things now quieting down for Thanksgiving in the US. No trade tonight then a half day on Friday should see the markets limp into the weekend. For the week, the ASX is up +2.35% - a very good move, and we continue to see upside in the local market into early December, albeit after a few quiet days from here.
The market dropped to a low of 5052 on the afternoon of the US election, before hitting a high today of 5503…A rally of +8.9%....After the BREXIT, the ASX 200 had a low of 5051 on the 28th June before rallying +560pts to trade at 5611 by the 1st August – a rally of +11%. It seems pretty clear from these moves that short term market spats can be very good buying opportunities – and more importantly, they often provide that ‘shake out’ that many investors need.
As we wrote this morning, we expect the current rally will continue to well over 5500 prior to a 100-point pullback in early/mid December, a 2016 high well over the August 5611 high feels a strong possibility. That’s how the seasonal footprint tends to play out, and although it may sound bullish cash levels from domestic and international funds remain high.
Commonwealth Bank (CBA) is now at an interesting juncture, having traded up from the bottom of the range to now be at the top… Clearly a very good run up in price in a short period of time. We sold out of ANZ a few weeks ago, after sighting it an the best performing bank from the July lows, but continued to hold CBA (before selling half last week). When a bank underperforms, and specifically when it’s CBA, it will generally play catch up – and that has clearly played out in this instance– we’ll put some stats around this in future notes however for now, we’re still holding our 6% position in CBA.
Commonwealth Bank (CBA) Daily Chart
On the market today, we had a range of +/- 32 points, a high of 5503, a low of 5471 and a close of 5485, flat on the session. Volume was OK at $4.92B although that will drop off tomorrow
ASX 200 Intra-Day Chart
ASX 200 daily chart
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ASX 200 Movers
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Market Matters Afternoon Report Wednesday 23rd November 2016
