For the finance sector. Now that is not to say we will not see some stocks move higher, but pretty much interest in the sector has waned and will stay soft for quite some time.
Let’s look at both the daily and weekly charts for the sector index – the XFJ:
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S&P ASX Financial Sector (XFJ:ASX) - Daily Line Chart
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Click to Enlarge
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S&P ASX Financial Sector (XFJ:ASX) - Weekly Line Chart
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Click to Enlarge
In the weekly you can see the OBV and the steady decline over the last year or so. We do not often seen that in modern times for markets, sectors or individual stocks. Quite marked.
The magnitude of the OBV decline mean the Instos have bailed out. It is not possible for even thousands of retail investors to cause such a decline. After all, this sector is about 40% of the All Ords.
This will have an impact on superfund returns and certain annuity type incomes as ultimately there could be an impact on dividends. This is a major change to income streams for retirees particularly.
It could be partially offset by a minuscule increase of interest rates on cash type products.
Within any sector there will be individual stocks that will move up and some that will move down. A sector index is a sum of plusses and minuses.
For now our focus is the XFJ.
Your home work is to check out individual stocks.
You might be surprised what you discover!
Enjoy the ride
Tom Scollon
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