Archive for the ‘2016’ Category

Paraphrasing the famous sentence of Game of Thrones seems correct this year.

These are difficult times for the markets

If your adviser does not understand it (or if the institution that advises you has a care towards shareholders, not client) you  are a lamb brought to the slaughterhouse.

If instead you understand it…there are really interesting occasions.

Make your choices correct, or ask me if you are in doubt.

As previously written, this year volatility will reign!

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As predicted, we saw the intervention of the ECB and this week we will probably see the Fed and Bank of Japan.

The short squeeze, depending on strength, has targets area 1,920, 1,970 and then 2,050. (it would be ASX200: 5,350/5,400 approximately).

On a technical analysis point of view the graphs says “it’s a trap!!”.

Unless it clears the all time highs 2,130 – the targets between here and October at 1,785, 1650 and, on panic, a spike on the 1,550 (ASx200: 4,000 or lower!)

Yes the Reserve Banks could negate this pattern. And that is why I say “a game too dangerous”.

But it definitely looks scary

ASX200 : Flat or negative (-5% to +3%) – banks and materials under pressure

SP500 Slightly up (0/5%)

AUD 0.68/0.70 US cents (later i the year, now there is a USD weakness)

Bond – Stable /positive (only 2 Fed hikes)

RBA no move for most of the year, maybe up towards the end

Oil: Once a low is in (USD25/34) a counter  rally to USD60

Iron Ore: USD 40 (stable)

Gold: once a low is in around $950/$1,000 a rally to $1,300/1,400

China to continue its slow “rotation to consumer economy path.

Yuan to 7.5 (depreciation towards dollar of about 15%)

Preferred markets: Japan, selectively Europe, Vietnam, selectively South America

Space to watch for potential crisis.

– Turkey/Russia/Iran

– High Yield Bond (energy, US auto loans)

-Italian banking crisis

-terrorist attacks

-China/ Emerging Markets (currencies)

Merry Xmas!

Well by now you should know that, in this period, I am against indexing (both for 2015 and 2016).

My friends at Market Vectors saved me some research and it clarifies what I mean

The ASX performed +1.76% year to 30 Nov 2015.

The top 10 shares which represents over 60% of the ASX and are the core of 80% of the SMSF managed by institutionally aligned advisers and private individuals…performed dismally

Look at the price movement (dividend is not included)

CBA -5.04%

BHP -31.68%

WBC -0.57%

ANZ-13.4%

Telstra -8.04%

NAB -9.9%

WOW -20.18%

WES -6.59%

Scentre (Westfield spin off) +18.29%

WPL -18.94%

So it is better to take an active approach.

What is in store for 2016…let’s see

Major Banks….they have pretty much arrived to full valuation – between rising capital requiring and slowing of real estate you will be happy if they do not more

Mining – Iron Ore, apart monthly swings – will not do anything major. China is transforming into a consumer economy or slowing down. Anyway steel consumption will not increase, so there  is a cap there

Energy – this could be more positive once a low is settled in as Middle East is ripe for a major accident.

There are other bright spots but not enough to influence the index. So keep away from indexing.