Market Matters Report / Market Matters Weekend Report - Sunday 21st June 2015

By Market Matters 21 June 15

Market Matters Weekend Report - Sunday 21st June 2015

Market Matters Weekend Report - Sunday 21st June 2015

Afternoon All,

Markets have been extremely complacent over Greece of recent weeks, could it be the one time they should have been concerned?

I decided to clear my head for a day and write this weekend report on Sunday as markets continue to be extremely tricky. I strongly believe that the days of buying and simply holding for 5 years are well behind us as recent movements in stocks have demonstrated e.g. over the last year Westpac (WBC) -4%, Macquarie Group (MQG) +34%, Santos (STO) -41%, Ansell (ANN) +29%, Harvey Norman (HVN) +61% and Fortescue (FMG) -49%. Investments / opportunities need to be continually evaluated / monitored as stocks feel set for some ongoing significant gyrations in volatility, even if the index itself remains fairly flat e.g. the Dow is unchanged in 7 months.

· Increased volatility in stocks will yield excellent opportunities for those who know what stocks they want to buy / sell and at what levels.

Last Thursday the ASX200 was hammered back towards 5500 and I thought it was looking set to accelerate towards 5200 but then on Friday it rallied +70 points (1.3%) but China collapsed 6.4%. In hindsight the local strength was likely caused by some aggressive traders unwinding their “long China short Australia” positions. Overall I remain committed to my view that the ASX200 corrects towards 5200 in 2015 with the US Indices close to a 10-15% correction. I have held this view on the US stock market now for over 6 months, the US indices remain basically unchanged, yet we have witnessed significant movements in other regions markets as various countries / regions share markets dance their own tune. I do believe the ASX200 will experience a decent fall if the US corrects 10-15%.

· The best move I did last week was following my “Gut Feel” and not pulling the trigger to buy Regis Resources (RRL) as a trade, with the stock reversing down poorly on Friday even with Gold up over $US25/oz. Saving $$ is as important as making $$ for investors / traders.

Myer (MYR) is in a similar position to RRL and I will be watching carefully around this $1.25 area, one thing is sure this would be a very contrarian play.


My views at a glance:

1. US equities will correct 10-15% in the relatively near future.

2. There are no reasons for traders / investors to buy Australian resource stocks at present.

3. Commonwealth Bank (CBA) will trade between $75 and $95 over coming 12-18 months, hence a good yield compared to 2% official rates – very useful for option sellers.

4. I am an accumulator of any fresh lows in 2015 by Australian banks. Short term their bounce may be close to completion.

5. For the first time in over 6 months I can see Woolworths (WOW) outperforming Wesfarmers (WES).


Clarifying potential stocks on my likely shopping List for coming months.

· Investing - ANN, ANZ, AMC, CBA, CGF, CSL, MQG, MTU, RHC, SEK and TLS.

· Trading - MYR and RRL.

Any subscribers not familiar with codes or companies can do some quick checking on the ASX website: http://www.asx.com.au/ - See charts of all below.

Summary:

No major change here:

1. I will remain patient on further purchases but I now have my buyer hat in place.

2. I continue to have no interest investing in the resources sector.

* Watch out for alerts.


What Matters this week

The ASX200 looks likely to open down 10 points on Monday.




Potential Investing opportunities for the coming week

· Hopefully investors are now sitting on a healthy cash position awaiting buying opportunities – see above.

Potential Trading for the coming week

· Short term I am unsure after Fridays surprisingly strong bounce.

· For aggressive traders / investors I am watching Myer (MYR) and Regis Resources (RRL) after fresh 2015 lows.



Portfolio Holdings


My portfolio had a poor week, not matching the market last week, the ASX200 rose 0.93%.

1. Bank of Queensland (BOQ) +1.3% - medium term investment.

2. Commonwealth Bank (CBA) +3.7% - long term Investment.

3. Mirvac (MGR) -0.8% - medium term investment.

4. Vocus (VOC) -3.6%- Medium term investment.

Cash for future purchases, ~35%.


Australian ASX200

I continue to look to spread my portfolio into more growth and offshore earning stocks going forward but importantly patiently.

Chart 1 – ASX200 Monthly Chart

Chart 2 – ASX200 Weekly Chart

Chart 3 – ASX200 Daily Chart

Chart 4 - SPI (Share Price Index) Futures 60 mins Chart

Chart 5 ASX200 REIT Index Monthly Chart

Chart 5b ASX200 Banking Index Monthly Chart

Chart 6 Volatility Index VIX Weekly Chart

Chart 7a – The US 10-year Interest Rate Quarterly Chart

Chart 7b – The German 10-year Interest Rate Quarterly Chart


American Equities

The American indices continue to show signs of topping out for 2015.

Chart 8 – Dow Jones Index Monthly Chart

Chart 9 – Dow Jones Index Daily Chart

Chart 10 – S&P500 Monthly Chart

Chart 11 – NYSE Composite Index Monthly Chart

Chart 12 – Russell 2000 Index Monthly Chart

Chart 13 – NASDAQ Monthly Chart

Chart 14 – The Canadian Composite Index Monthly Chart


European Indices

European Indices still look have the potential to rally another 2-3% aided by ECB stimulus but Greece remains an ongoing concern.

Chart 15 – Euro Stoxx 50 Weekly Chart

Chart 16 – FTSE Weekly Chart

Chart 17 – Spanish IBEX Monthly Chart

Chart 18 – German DAX Monthly Chart

Chart 19 – Greek Stock market Weekly Chart


Asian Indices

Asian indices have been very bullish, led by China as it opens its market to offshore investors, Japan is still receiving great strength from ongoing aggressive QE.

Chart 20 – Hang Seng Weekly Chart

Chart 21 – China Shanghai Composite Monthly Chart

Chart 22 – Japanese Nikkei 225 Monthly Chart


Australian Stocks

Quality stocks with sustainable yield have been standouts but some industrial stocks are now looking better. I no longer am a net seller of the “yield play” after its 15-20% correction and looking to buy growth / yield stocks BUT not resources.

Chart 23 – BHP (US) Monthly Chart

Chart 24 – BHP Weekly Chart

Chart 25 – Woodside (WPL) Monthly Chart

Chart 25b – Santos (STO) Weekly Chart

Chart 26 – RIO Tinto (RIO) Weekly Chart

Chart 27 – Fortescue Metals (FMG) Weekly Chart

Chart 28 – Vale (US) Weekly Chart

Chart 29 – Newcrest Mining (NCM) Monthly Chart

Chart 30 – Regis Resources (RRL) Weekly Chart

Chart 31 – Barrick Gold Corp. (US) Monthly Chart

Chart 32 – CBA Quarterly Chart

Chart 32b – CBA Daily Chart

Chart 33 – ANZ Bank (ANZ) Monthly Chart

Chart 33b – ANZ Bank (ANZ) Daily Chart

Chart 34 – Westpac Bank (WBC) Weekly Chart

Chart 34b – Westpac Bank (WBC) Daily Chart

Chart 35 – National Bank (NAB) Weekly Chart

Chart 36 – Macquarie Bank (MQG) Monthly Chart

Chart 37 – Bank of Queensland (BOQ) Weekly Chart

Chart 38 – AMP Weekly Chart

Chart 39 – Challenger Financial (CGF) Monthly Chart

Chart 40 – Suncorp Group (SUN) Monthly Chart

Chart 41 – Insurance Australia (IAG) Monthly Chart

Chart 42 – QBE Insurance Monthly Chart

Chart 43 – Wesfarmers Ltd (WES) Weekly Chart

Chart 44 – Woolworths Ltd (WOW) Quarterly Chart

Chart 45 – Seek Ltd (SEK) Monthly Chart

Chart 46 – Telstra (TLS) Monthly Chart

Chart 47– M2 Group Ltd (MTU) Monthly Chart

Chart 48 – Vocus Communications (VOC) Weekly Chart

Chart 48b – TPG Telecom (TPM) Monthly Chart

Chart 49 – Westfield Corp. (WFD) Monthly Chart

Chart 50– CSL Ltd (CSL) Monthly Chart

Chart 51 Ramsay Healthcare (RHC) Monthly Chart

Chart 52– Resmed (RMD) Weekly Chart

Chart 53 - Ansell (ANN) Monthly Chart

Chart 54 – Amcor Ltd (AMC) Monthly

Chart 55 – Crown Resorts (CWN) Monthly

Chart 56– Myer Holdings (MYR) Weekly

Chart 57– JB Hifi (JBH) Monthly

Chart 58– Harvey Norman (HVN) Monthly

Chart 59– Australian Dollar (AUD) Weekly Chart

The $A continues to decline with an ultimate technical target now well under 70c.


Commodities

I am now neutral Gold as rising interest rates could easily derail the recent strength. I have divergence with the stocks and precious metal.

Copper remains very negative on a longer term basis, a very similar chart pattern to Newcrest Mining (NCM) and unfortunately we all saw what happened there.

Crude Oil has bounced as anticipated; I still expect renewed weakness over coming months.

Iron Ore is 50-50 here BUT the trend is clearly down and long term futures remain bearish.


Chart 60 – Gold Monthly Chart

Chart 61 – Copper Monthly Chart

Chart 62 – Crude Oil Monthly Chart

Chart 63 – Iron Ore Monthly Chart


Please note this is my personal TECHNICAL opinion of markets and "General Advice" taking no account of individual’s circumstances.

Have a great week,

MarketMatters Team

 

All figures contained from sources believed to be accurate. Marketmatters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy. 
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