The ASX200 rallied yesterday closing back above 6950 but so far it’s been a relatively lacklustre start to the week considering leads from the US and especially commodity markets. As we’ve pointed out fund managers are long cash, and underweight equities, but they remain understandably reticent to chase strength in stocks i.e. 3 steps forward, 2 back wouldn’t surprise us over the next few weeks with most of the standout volatility on the stock level – pretty much what we saw by US equities last night.
- Since the market tested 6400 in October we have been targeting the 7200 area in Christmas, it’s only 3.5% away hence I remind subscribers of our caveat that surprises are likely to be on the upside.
Last night saw the Dow rally over 500-points before surrendering all of the gains as Bitcoin tumbled before rallying again to close up over 300-points i.e. volatility with an upside bias. Following the gains overnight the local index looks set to re-test the 7000 area, it’s a matter of time before we’re typing 7100 in our opinion.
MM believes the ASX200 will test the 7200 area into Christmas
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