Well at least most in Australia would be chilling out, if not necessarily basking in the sun. And while you were putting your feet up, the markets were working hard – in fact from the get-go of the New Year the markets took off with confidence. Regardless of the world shenanigans.
Let’s take a look at the key indices and see what has been happening:
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All Ordinaries (XAO:ASX) Daily Line Chart
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A strong start and now heading to a wave five high. Two are shown. With the current momentum it would appear the first wave five could be taken out easily even though we may see some sell off days which is the natural profit taking process.
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S&P ASX Consumer Discretionary (XDJ:ASX) Daily Line Chart
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As you spent up big in December and the new year sales, share traders are optimistic that you might continue to spend in the coming quarter. You will note that the first wave five is within reach and we could see the sector lose some momentum in the medium term.
That is more in keeping with economic logic.
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S&P ASX Energy (XEJ:ASX) Daily Line Chart
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Oil stocks continue to rise but have not matched the volatility of eco-political issues that affect oil.
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S&P ASX Financials (XFJ:ASX) Daily Line Chart
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The malaise of 2019 has continued into the new year with the index almost back to levels of January 2019.
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S&P ASX Materials (XMJ:ASX) Daily Line Chart
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Resources have shown strength so far, but some pullback is likely in the weeks ahead.
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S&P ASX Industrials (XNJ:ASX) Daily Line Chart
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The Australian ‘’industrials’’ sector has shown solidarity month after month and though a stalwart of the overall Australian market, the sector also is eyeing a significant top and perhaps some easing.
Overall the Australian market, like only a few other – USA in particular – has defied popular opinion and continued higher. Yes, a top will come – we all know that – but the timing is the key issue, and no-one can predict that with strong conviction.
Beware the experts as they abound. Listen to your charts.
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Enjoy the ride
Tom Scollon
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