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The ASX200 and global equities have rallied strongly since their early 2020 COVID meltdown with virtually all major indices posting fresh all-time highs in recent weeks but there might be a new canary in the coal mine, the main question being will it be around for just a few weeks, or much longer. Firstly lets reiterate 3 of the main reasons stocks have “wobbled” in recent sessions:
The ASX200 experienced some September wobbles last week finally closing down 116-points / 1.5%, all 11-sectors closed in the red with the Materials & Real Estate stocks worst on ground. Fridays was a classic mean reversion session with many stocks which endured a tough week managing to bounce, and vice versa. A couple of themes caught my attention through the relatively volatile week:
The ASX bounced back tentatively today recovering a third of yesterday’s decent decline – most buying in the Material stocks supported by IT and Energy which suits MM’s current positioning – healthcare lagged. Overall, a good session to end a soft week.
The ASX200 was clobbered yesterday falling -1.9% plumbing levels not seen since late July as broad-based selling washed through our market, noticeably the “dip” buyers failed to surface as we broke down out of the last few weeks trading range. Only 3% of the main market managed to close up on a day when all pockets of the market suffered, almost 15% of the market retreating by -4%, or more.
The market opened lower this morning and instead of buyers emerging into the dip we got the opposite with a consistent sell-off right across the market with 191 stocks from the ASX 200 closing lower on the day. All sectors finished in the RED however IT felt post pain down ~3%. Green was a scarce colour on the screen and aside from the VIX there were only two stocks that rose more than 1%, namely Resmed (RMD) & Whitehaven Coal (WHC).
The ASX200 continues to rotate around the 7500 area, give it another 9-more days and it will perfectly mirror the 201-point pullback in June / July from both a time & price perspective. Wednesday was a quiet day even while it delivered another recovery from early weakness, we finally closed down -0.2% with less than 30% of the main board managing to close in positive territory. Interestingly Australian stocks still haven’t experienced a 5% pullback in 2021 yet Bitcoin ($US) managed to plunge -15% in just 2-hours on Tuesday illustrating perfectly…
The market opened on the backfoot again this morning with Futures down ~60pts early before rallying from the lows–it’s been the playbook for the last week it feels, although today we did finish below the session highs. COVID continues to dominate the news flow, the bickering between the States is getting old, FFS we don’t need political BS to end a pandemic that has cost so many people & businesses so much.
We are making changes to both the Emerging Companies Portfolio & the Global ETF Portfolio today
The ASX200 closed marginally higher on Tuesday as it continued to hover around the 7500 level, the number of winners & losers almost exactly matched with only 1% of stocks moving by over 5% i.e. there was little on the stock level to excite investors following the Labor Day holiday in the US. However on the macro / news level there was a couple of interesting events catching our attention:
The market continued to follow a very similar path to home schooling in the Gerrish house hold of late, the low set in the morning – perhaps deeper than most feared before a recovery plays out later in the session and we close at the high point of the day. Today that was up just 1pt for the ASX 200 as the market continues to consolidate it’s recent ~200pt pullback. As we highlighted this morning, the previous pullback back in June / July took 6-weeks…
