Australian Investment Blog

Happy Christmas everybody!

We will be closed until the 9th of January, but if there are any significant market moves, we will still publish reports and importantly, alerts will still be sent if we trade on the MM portfolio which currently feels highly likely.

The local market yesterday again continued with its seasonal strength, rallying 30-points to close at another fresh high for 2016. In the previous Morning Report, we looked at the statistics for the next few trading days since the GFC and they were a very powerful / bullish set of numbers:

1. The ASX200 has rallied 75% of the time over this period.
2. The ASX200 has gained on average 77-points over this period.
3. The ASX200 has gained on average 1.6% over this period.

The conclusion to us was easy, for the next week or so investors / traders should be long, or out. We remain comfortable with our current position of significant market exposure, but looking to sell into further strength.

We continue to target ~5700 into 2017.

A few subscribers have wondered if we are bearish the market right from the outset of 2018 and the simple answer is "not yet". The MM portfolio has been aggressively long during recent market volatility that scarred many seasoned / famous investors into hibernation. We now simply want to lock in some of these gains and sit back and observe how the start of 2018 unfolds.

When we look at the statistics for January since the GFC, in a similar manner to above the results are relatively inconclusive:

1. Since the market in 2009, the ASX200 has been up 50% of the time in January and unchanged once.
2. The net change for the month of January has been negative 159-points.

Overall our interpretation is slightly negative, considering the last seven years has been an impressive bull market.

ASX200 Weekly Chart

The US market continues to hold firm and we are still targeting around 2% higher into 2017.

US S&P500 Daily Chart

This morning we have again listed the stocks within the MM portfolio, which are approaching our ideal sell levels, while hopefully not giving them "the kiss of death":

VTG - Looking to take profit ~$3.40.

WFD - Looking to take profit ~$9.50.

TCL - Looking to take profit ~$10.80.

MQG - Looking to take profit ~$90.

WBC - We are looking to take profit ~$33, but we may do this in two sell downs of 5%.

Summary

No change, we remain short-term bullish stocks, but are still planning to reduce exposure during the end of December.

* Please watch for alerts.

Overnight Market Matters Wrap

• The US share markets closed marginally lower in a quiet session, ahead of the festive season.
• The Dow closed 23 points lower (-0.12%), at 19,919, while the broader S&P 500 closed 4 points lower (-0.19%) at 2,261.
• The major miners are expected to underperform against the ASX 200 with BHP in the US closing an equivalent of -1.83% to $24.69 from Australia’s previous close.
• A quiet session remains to be expected in the ASX200 today, with the March SPI Futures indicating a ~15 point jump from the gates this morning, testing the 5,660 level.

Disclosure

Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday.

Disclaimer

All figures contained from sources believed to be accurate. Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy. Prices as at 23/12/2016. 8.00AM.
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