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So was the heading I read in the press this week. Sounds impressive.
But I am never satisfied until I see a chart.
Firstly All Ords, then XFJ and XMJ:
Click to Enlarge
Click to Enlarge
We can see with all three important indices for the Australian market, stocks might be at a six year high but all are well off their 7 year highs.
All three could continue higher from here but we know there will be a major pullback – the longer it takes the bigger the pullback that is likely.
All three offer the prospect of a rise close to the old high of 2007. BUT. Some five years out! Anything can of course happen between now and then. Note that the projected All Ords high is less than the 2007 high.
The DOW is well past the 2007 highs – by almost 50%:
Click to Enlarge
There is also the likelihood of a pullback and as the DOW has run so hard it could also tumble heavily.
Risks are increasing but if you keep good risk management in place then you can sleep relatively easily at night.
Enjoy the ride
Tom Scollon
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