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Only a few months ago the headline would have been: ‘Markets Behaving Badly’. And rightly so.
Mind you, I have not heard from those bears that berated me for my optimism some months ago. Gone hiding, but they will be back with their misery. The doom and gloom they predicted may well come, but it is all in the timing.
The markets right now are behaving like a well trained pet. Just take a look at the ProfitSource All Ords chart:
Chart 1 – All Ordinaries Daily Line Chart
click chart for more detail
It was only a matter of time before the market would break through that critical 5100 level. When it did, it produced one of those gorgeous trend lines that is so often referred to as ‘the trend is your friend.’
And we are now possibly into a very orderly retracement – marked as a wave four. When markets retreat we of course cannot say with certainty where the bottom may be. We do know though that there are probabilities as to where the retracements may finish and the wave four marked above gives us both a time and price estimate – incredibly handy for any investor.
The good news is that after the retracement we should see the old high of this month taken out and yet another all time record for our market with somewhere around 6000 being reached – barring the ‘X’ factor of course!
It’s summer time again, the surf is up and blue skies are here so hang on for another giant wave!
Enjoy the ride
Tom Scollon
Chief Analyst
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