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    Indexes into Christmas

    Hi guys, apologies; could you give another update on how you see the indexes moving into Christmas. Everything to me just seems very stretched at the moment and I've been reluctant to hold any decent position as surely, valuations need to reset at some point. As much as we are in the goldie locks scenario right now, we've still got to look at earnings across the board to match. I got a few nice runs from the August, September drops and have been hoping for another pull back before Christmas; maybe the US election will provide some good entries. Your views are always appreciated. ASX, Dow 30, Nasdaq, Stoxx 50, S&P500, FTSE, H-shares. (I trade indexes as I can leverage up and manage it easier than a portfolio of shares and other instruments) Regards, Simon

    Answer

    Hi Simon,

    A technical/statistical based question into yearend; we are bullish at this stage expecting higher prices through Q4 while volatility is likely to remain very elevated on the stock/sector level:

    • ASX200 – were looking for a push towards 8600 which would simply be the average ~4% gain for a 4th quarter of the last decade plus of course a number of major stocks trade ex-dividend in November hence its the equivalent to 8650 basis todays index.
    • Dow 30 – we can see a test of 44,000 but its tough to call for an index with a small number of stocks pushing to fresh highs.
    • Nasdaq – we expect this tech based index to follow Nvidia (NVDA US) to fresh highs, best guess for Christmas is 21,000.
    • Stoxx 50 – We continue to look for this European Index to make fresh highs ~5200, or 5% higher.
    • S&P500 – in line with the NASDAQ we can see the S&P500 test 6000 into Christmas.

    NB There are a lot of investors waiting/hoping to buy a pullback.

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