The ASX200 enjoyed a solid Wednesday in the face of some negative leads as US stocks drifted lower and the local BNPL space was clobbered courtesy of Apple (AAPL US) – more on this later. Under the hood we saw ongoing mean reversion with the likes of Crown (CWN) and HUB24 Ltd (HUB), who both reside in the MM Flagship Growth Portfolio bounce strongly after struggling over the last few weeks i.e. pretty much a continuance of the trend across recent months.
History tells us patience towards investing is usually rewarded but after more than 6-weeks of watching the market tread water its becoming frustrating even for us, I can just imagine how many short-term traders have been chewed-up after failing to identify the current rhythm and buying strength and selling weakness. A number of good quality stocks have corrected 50-75% of our targeted pullback only to find a base as the “buy the dip” attitude continues to unfold through the market, a few examples from the major heavyweights:
- BHP Group (BHP) corrected 12% from its May high before retracing most of its fall.
- Commonwealth Bank (CBA) has retraced over 8% from its June high but its stubbornly holding onto the $98 area.
- CSL Ltd (CSL) corrected more than 11% from its June high before bouncing strongly from $273.
Obviously these swing lows might ultimately be broken but for now accumulating into weakness as opposed to waiting for a specific buy zone has paid dividends hence MM whose sat on the patient side of the fence is experiencing a relatively prolonged period of inactivity across our portfolios. However at this stage, we’re comfortable being ready and flexible for any future volatility that may raise its head, we still believe it’s a strong possibility in the coming 1-2 months.
Overnight US stocks held steady with the tech space the best index gaining +0.2%, the SPI Futures are calling a quiet but slightly weaker start to this Thursday led by BHP Group (BHP) which fell ~20c in the US.
MM remains a very keen buyer of stocks into decent pullbacks
Add To Hit List
