Australian Investment Blog

Yesterday, the local market continued with its seasonal strength, rallying another 22-points to close at a fresh high for 2016 - a nice way to be heading into Christmas. We felt this advance was a very high probability occurrence, the question now is what happens over the remaining few trading days into both Christmas and New Year’s Eve? We currently remain heavily committed to the market looking to sell into current strength, hence until we actually sell some holdings, forecasting this recent advance rally counts for nothing.

Let's look back at the market between the 22nd and 31st of December since the height of the GFC:

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 is easy, for the next week or so, investors / traders should be long, or out. We remain comfortable with our current position of looking to sell into further strength.

We continue to target ~5700 into 2017.

ASX200 Daily 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 updated 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 over $9.50.

TCL - Looking to take profit ~$10.80

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 tone hasn’t changed this week across the globe this week, as investors wind down ahead of the festive season, the US markets closed with little change again overnight.
• The Dow lost 33 points (-0.16%) to 19,942, while the broader S&P 500 closed 6 points lower (-0.25%) at 2,265.
• Crude oil slipped 1.52% lower overnight to US$52.50/bbl. after a data report showed an increase of stockpiles for the first time in five weeks.
• A quiet session is expected in the ASX200 today, with the March SPI Futures indicating a slightly higher open towards the 5,625 level this morning.

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 22/12/2016. 8.00AM.
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