|
As readers would be aware, I have been rather bullish on the Australian equities market for some time, in particular those stocks with exposure to foreign demand, even before the impact of a weak US dollar on commodities prices.
The ensuing weakness in the US dollar and ultra-low interest rates has triggered a rather interesting situation on the domestic US market. As the All Ordinaries has an obvious correlation to its bigger brother, Australian equities will also be affected.
Interest rates can’t be lowered much further than current levels so this form of stimulus is unfortunately not an option for the US Federal Reserve at this point in time. For this reason, the words ‘Quantitative Easing’ can be heard in just about every finance report or news article of the past few weeks.
The prospect of Quantitative Easing is an interesting one. The Federal Reserve injects money into the economy to prevent another financial melt-down, although artificially bolstering the existing economic recovery, making the return to pre-GFC levels an even more drawn out process than before.
It is clear to see that markets consider this little (or rather major) injection into the US economy a positive for equities markets. In fact, the trillions of dollars expected to be injected into the market is already substantially factored into current valuations.
Now, if the Fed did find reason to not embark on another round of easing, this would indicate that the US economy as a whole may be better than most had anticipated –yet another positive sign. It’s a glass half empty and glass half full type of situation. Whichever way you choose to look at it, you can squeeze a little positive sentiment for US and Australian stocks.
Those who joined me in the recent Elliott Wave Webinar would be aware we examined a number of potential Wave 4 trades, many of which are proving to be very profitable. Pre-computed scans within ProfitSource allowed us to identify these trade setups by filtering from the whole US and Australian markets to identify those stocks which meet our Elliott criteria. Many of these stocks have begun their Wave 4 ascent, but it is still early days. We see new trade set-ups presenting themselves with multiple entry opportunities with every new scan we run through the ProfitSource software.
It’s not often we see a clear trending market with fundamental and technical trading opportunities creating a recipe for short term gain. Whether you’re using HUBBInvestor or ProfitSource now may just be the time to take your trading to the next level. Do your portfolio a favour and enrol in the Elliott Wave Webinar today.
Happy Investing
Lachlan McPherson
|