Australian Investment Blog

Will a June correction become self-fulfilling? Pessimism is rife, that the ASX200 will fail at the 5400 area and return to the disappointing days of the last 15 months. Unfortunately we all know since last March, the local market is down 11.2%, while during the same period, the US S&P500 is up 1.8%. The big end of town has generally been the worst place to hide over the last year, with the banking index down 13%, energy 25%, Woolworths 20%, BHP 34% and RIO 22% to name some key examples. Currently, stock selection has arguably never been more important to achieve optimum portfolio gains. Over the last 2 days, the local market has fallen 100 points, again ignoring mildly positive leads from the US. However it should be remembered, that June is basically only the financial year end for Australia and New Zealand, hence we are much more likely to run our own race over coming weeks. The ASX200 Weekly Chart When Market Matters looks at short time frames, we look at the futures markets, as the prices exclude index changes due to large dividends being paid. We understand that many subscribers are not familiar with futures and it’s an area we will explain in a report when markets are quiet, but in simple terms the futures price theoretically moves point for point with the ASX200.
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