Tom Scollon
Chief Editor

And so say all of us, us, us. Yes Trading Tutors Newsletter is now one year old and what an enjoyable 12 months it’s been – I will not say how time has flown as that will date me. I believe I can say on behalf of the Trading Tutors team that you have been a great readership and a pleasure to write for. The positive feedback and appreciation expressed by readers has been overwhelming. We are committed to bringing to you the same succinct, relevant articles over the coming 12 months. Please feel free to pass it on to a friend – you may be just doing them a big favour! You can do that by merely passing on the link www.sitm.com.au.

Well those who sold the dead cat bounce may well be regretting that decision although the view that market valuations are becoming stretched, is gaining momentum. And time may bear out the wisdom of that decision. For me I am sticking with the trend but constantly doing housekeeping and cleaning out underperformers.

The Dow stumbled for a short while a couple of weeks ago, but seems to have recovered as the jobless recovery appears to kicking in. The Australian market, which has a mind of its own right now, has been one of the outstanding global performers over the last month and last week comfortably took out that old high of March 2002. This is not to say it could not revisit the level again!

I took a look at the very first 2004 edition of TT last week and my view then was ”3600 is a highly likely milestone but in the best of worlds, barring the “X” factor, we could see an All Ords as high as 3800. That does not mean it is straight up from here – we could see a major pullback before an assault on the new peak”.

It is probable that April will see a steady move up and this may even continue into early May. If so, we could well see the 3600 level breached. I continue to be satisfied with my projection of 3800 some time during the year and in fact would not be surprised if that level was higher.

As usual it will be a case of being selective in your stock choice and in that way you will constantly find value in the market. Sectors are showing some signs of divergence with Materials, Pharmaceuticals, Energy and Media showing strength against some weakness amongst the Banks, Telecommunications and Retail. I believe firmly that those who are prepared to actively manage their portfolio and use options to add leverage will constantly find value over the majority of players. This does not necessarily mean constantly switching, as that can lead to frenetic delirium. Managing your weak investments and letting your profitable holdings run will see you with superior returns come year end.

Enjoy the ride.

Tom Scollon
Editor