Market Matters Report / MarketMatters Weekend Report Saturday 8th August 2015

By Market Matters 08 August 15

MarketMatters Weekend Report Saturday 8th August 2015

MarketMatters Weekend Report Saturday 8th August 2015

Afternoon All

The ASX200 was clobbered last week, falling almost 4%, as the banks became the main focus after ANZ's $3bn capital raising. Whether the US Indices, DAX and Nikkei manage to see fresh 2015 highs in coming weeks feels irrelevant, the ASX200 clearly is already in correction mode with our long-term target of 5100-5200 looming fast. The local market is running very independently of its larger counterparts and is suffering badly because of its significant dependence on both resources and the "Big 4" Banks. Maintaining a watchful eye on the US and European markets is always prudent but we should remember that the ASX200 is up 45% since August 2011 while the S&P500 is up 93% clearly illustrating that they both dance to their own tunes. A number of quality stocks are slowly but surely approaching our optimum buy levels. Remaining focused when panic selling emerges like Friday is very important to constructing an excellent portfolio at good entry levels. Below are some stocks we are watching very closely with our current buy targets:

1. Big 4 Banks : ANZ ~$29, CBA accumulate $75-78, NAB ~$30 and Westpac ~$30.
2. Financials: AMP ~$6 and Macquarie Bank (MQG) ~$75.
3. Oils : Crude is close to making the fresh 2015 lows that we have been targeting as Santos (STO) moves towards the $6.50 area that we believe is good value.
4. Telcos: Telstra ~$5.90 and TPG ~$8.25.
5. Healthcare: Ramsay (RHC) ~$58 and CSL ~ $85.
6. $US Earner: Amcor (AMC) ~$13

At MarketMatters we think recent volatility will continue in August and September hence passionately ask investors to have a plan as exciting opportunities are arriving!

Our views at a glance:

1. US equities will correct 10-15% in the relatively near future.
2. Australian resource stocks are interesting at present for countertrend bounces, led by oil stocks, however the trends remain bearish.
3. Commonwealth Bank (CBA) will trade between $75 and $95 over coming 12-18 months – very useful for option sellers.
4. I am an accumulator of any fresh lows in 2015 by Australian banks. Current levels outlined above.
5. We believe gold is very close to an aggressive countertrend rally.
Any subscribers not familiar with codes or companies can check these on the ASX website: http://www.asx.com.au/ - See charts of all below.

Summary:

No major change here:

1. We will remain patient on further purchases but now have our buyer's hat in place.
2. We continue to have no interest investing in the resources sector but trading opportunities are now being targeted.

* Watch closely for MarketMatters alerts via SMS and email.

What Matters this week

The ASX200 looks likely to open down around 15-points on Monday.


Potential Investing Opportunities for the coming week

· Hopefully investors are now sitting on a decent cash position awaiting buying opportunities – see above.
· We are now wearing our buyer's hat but generally looking for lower levels to reinvest excess funds.
We are sellers of Vocus (VOC) into fresh 2015 highs.

Potential Trading for the coming week

· Short-term we are still looking for selling opportunities, ideally any 50-100 point bounce in the ASX200.
· For aggressive traders / investors we are long FMG / NST and Regis Resources (RRL).
· Santos (STO) is in our buy region as it falls towards $6.50 - see chart 25b.
Lastly our nemesis Myer (MYR) is looking technically excellent for a +25% rally in coming months.


 

Portfolio / Trade Holdings

Our portfolio had an average week, struggling to match the overall market, the ASX200 fell 3.9%.

1. Bendigo Bank (BEN) -1.3% - medium term investment.
2. Challenger (CGF) -1.1% - medium term investment.
3. Commonwealth Bank (CBA) -7.1% - long term Investment.
1. 4. Seek (SEK) -2.6% - medium term investment.
2. Vocus (VOC) -2%- Medium term investment.
3. Woodside (WPL) -4.7% - medium term investment.

· Fortescue (FMG) October 1.75 Calls - Trade.
· Regis Resources (RRL) and Northern Star Resources (NST) - Trade.

• Cash for future purchases, ~14%.

Australian ASX200

We continue to look to spread our portfolio into more growth and offshore earning stocks going forward but importantly with patience.

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 5a ASX200 REIT Index Monthly Chart

Chart 5b ASX200 Banking Index Monthly Chart

Chart 5c ASX200 Financials Index (excl. REIT's) Weekly Chart

Chart 6 Volatility Index VIX Weekly Chart

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

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


American Equities

The American indices continue to show signs of a topping pattern for 2015 but our preferred scenario is one fresh high for 2015.

Chart 8 – Dow Jones Index Monthly Chart

Chart 9 – Dow Jones Index Daily Chart

Chart 10a – US S&P500 Index Monthly Chart

Chart 10b – US S&P500 Index Daily Chart

Chart 11 – NYSE Composite Index Monthly Chart

Chart 12 – Russell 2000 Index Monthly Chart

Chart 13 – US NASDAQ Index Monthly Chart

Chart 14 – The Canadian Composite Index Monthly Chart

 

European Indices

European Indices feel to be in the middle of a decent correction with clearest leads coming from the UK's FTSE and Spanish IBEX.

Chart 15 – Euro Stoxx 50 Index Weekly Chart

Chart 16 – UK FTSE Index Weekly Chart

Chart 17 – Spanish IBEX Index Monthly Chart

Chart 18a – German DAX Index Monthly Chart

Chart 18b – German DAX Index Weekly Chart


Asian Indices

Asian indices have been extremely volatile over recent weeks on the back of a plunging Chinese market, we believe this represents a good long term, albeit aggressive, buying opportunity. However, the Nikkei looks technically a sell into fresh 2015 highs.

Chart 20 – Hang Seng Weekly Chart

Chart 21 – China Shanghai Composite Index Monthly Chart

Chart 22 – Japanese Nikkei 225 Index Monthly Chart


Australian Stocks

Quality stocks with sustainable yield have been standouts but some industrial stocks are now looking better. We are no longer am a net seller of the “yield play” after its 15-20% correction and looking to invest in growth / yield stocks BUT not resources. However, we're no longer bearish the resources sector from a risk / reward perspective.

Chart 23 – BHP Billiton (US) Monthly Chart

Chart 24 – BHP Billiton (BHP) Weekly Chart

Chart 25a – Woodside Petroleum (WPL) Weekly 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 30a – Regis Resources (RRL) Weekly Chart

Chart 30b – Northern Star Resources (NST) Weekly Chart

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

Chart 32a – Commonwealth Bank (CBA) Quarterly Chart

Chart 32b – Commonwealth Bank (CBA) Weekly Chart

Chart 33a – 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 Australia Bank (NAB) Weekly Chart

Chart 36 – Macquarie Group (MQG) Monthly Chart

Chart 37a – Bank of Queensland (BOQ) Weekly Chart

Chart 37b - Bendigo Bank (BEN) Monthly Chart

Chart 38 – AMP Ltd (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 (QBE) Monthly Chart


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Chart 43 – Wesfarmers Ltd (WES) Weekly Chart

Chart 44 – Woolworths Ltd (WOW) Quarterly Chart

Chart 45 – Seek Ltd (SEK) Monthly Chart

Chart 46 – Telstra Corp. (TLS) Monthly Chart

Chart 47– M2 Group Ltd (MTU) Monthly Chart

Chart 48a – 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

Chart 55 – Crown Resorts (CWN) Monthly Chart

Chart 56– Myer Holdings (MYR) Weekly Chart

Chart 57– JB Hifi (JBH) Monthly Chart

Chart 58– Harvey Norman (HVN) Monthly Chart

Chart 59– Australian Dollar (AUD) Weekly Chart

The $A continues to decline with an ultimate technical target now well under 70c but short term a bounce feels likely.


Commodities


We are looking for Gold to reverse back up aggressively in coming weeks.

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's ended very quickly, we still expect renewed weakness over coming months to make fresh 2015 lows but interesting the energy stocks look ok.

Iron Ore remains positive for a countertrend bounce.

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 our personal TECHNICAL opinion of markets and "General Advice" taking no account of individual’s circumstances.

Have a great week,
MarketMatters Team


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