Market Matters Report / The Hickman Report - Saturday 3rd January 2015

By Market Matters 03 January 15

The Hickman Report - Saturday 3rd January 2015

The Hickman Report - Saturday 3rd January 2015

Happy New Year!

The markets continue to unfold eerily close to my predictions of the last 3 months. If this continues, it should be a very exciting 2015 indeed. We had the anticipated Christmas rally, although markets left it until the third week of December to get into the festive spirit. Interestingly, the ASX200 rallied 6.7% to close up 1.8% for the month, while the Dow rallied 6.1%, but closed slightly lower for the month. The weaker Australian dollar may help the local market in 2015.

Let’s look at the clear market movements that I am anticipating for the coming few months:

1. I believe that US equities have topped out and are commencing a 10-15% correction.
2. The Australian market may outperform slightly, but I still expect a test of the 5000 area for the ASX200 i.e. 8% lower.

I believe investors should be in cash, because if I am correct, awesome opportunities are close at hand and if I am wrong, we still collect a small % of interest and are unlikely to witness markets roar ahead without us, plus its mid-February until some major stocks go ex-dividend.

This week, the clear technical charts are again aligned with above comments:

Bullish: The Chinese Index looks set for more gains, Gold and its respective Sector still looks bullish, Seek remains bullish targeting $19.

Neutral: RIO, Australian Banks.

Bearish: The US and German DAX Indices are heading for a major correction in coming months, the ASX200 is targeting the 5000 area, I remain bearish BHP longer term, Australian Insurance Sector, Macquarie Group (MQG) is targeting $55 area and Woolworths (WOW).

My conclusions:

• Cash is “king” - investors sit back and be patient.
• Traders use any rallies to sell calls / short the market.
• I am NOT a buyer of any equities at present, except gold stocks on down days.
Gold should continue to rally towards $1400 and stocks in the sector, especially Australian based companies should follow with the added tailwind of a weak $A.


What Matters this week

The ASX200 is looking to open down up around 35 points on Monday, around 5400.


Potential Investing opportunities for the coming week

• For investors holding cash, be patient. It may take 3-4 months, but I anticipate excellent buying opportunities in 2015.

Potential Trading for the coming week

• Look to short the market ideally into any rallies e.g. Friday’s 58 point intraday rally.



Portfolio Holdings

My portfolio has reduced its stock holdings significantly over December as was discussed in previous reports. We underperformed slightly as the ASX200 rallied 0.42%, courtesy of a strong recovery in resource stocks, aided by stabilising commodities and a weaker $A.

1. Bank of Queensland (BOQ) +0.16% - Medium term investment.
2. Commonwealth Bank (CBA) +0.11% - Long term investment.

• Cash, +50%.

Australian ASX200

This New Year, I am carefully looking for selling opportunities.

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 – Volatility Index VIX Weekly Chart

Chart 6 – The US 10 year Interest Rate Monthly Chart

Chart 7 – New Zealand 50 Index Monthly Chart


American Equities

The American indices will ideally correct 10-15% over coming months.

Chart 8 – Dow Jones Index Monthly Chart

Chart 9 – Dow Jones Index Daily Chart

Chart 10 – S&P500 Monthly Chart

Chart 11 – S&P500 Weekly Chart

Chart 12 – Russell 2000 Index Monthly Chart

Chart 13 – NASDAQ Weekly Chart

Chart 14 – The Stock Market Cycles

 

European Indices

My “Gut Feel” tells me that European Indices will spike under October lows in coming months.

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 – German DAX Daily Chart

 

Asian Indices

Asian indices are neutral at present. However, China is still looking very bullish as it opens its market to offshore investors.

Chart 20 – Hang Seng Weekly Chart

Chart 21 – China Shanghai Composite Monthly Chart

Chart 22 – Japanese Nikkei 225 Monthly Chart

 

Australian Stocks

I am happy to be over 50% in cash, awaiting developments.

Chart 23 – BHP (US) Monthly Chart

Chart 24 – BHP Daily Chart

Chart 25 – Woodside (WPL) Monthly Chart

Chart 25b – Woodside (WPL) Daily Chart

Chart 26 – RIO Tinto (RIO) Weekly Chart

Chart 27 – Fortescue Metals (FMG) Monthly 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. (ABX.US) Monthly Chart

Chart 32 – Commonwealth Bank (CBA) Quarterly Chart

Chart 33 – ANZ Bank (ANZ) Monthly Chart

Chart 34 – Westpac Bank (WBC) Weekly Chart

Chart 35 – National Bank (NAB) Weekly Chart

Chart 36 – Macquarie Bank (MQG) Weekly 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) Weekly Chart

Chart 46 – Telstra (TLS) Monthly Chart

Chart 47– M2 Group Ltd (MTU) Monthly Chart

Chart 48 – Crown Resorts Ltd (CWN) Monthly Chart

Chart 49– Ansell Ltd (ANN) Monthly Chart

Chart 50– CSL Ltd (CSL) Monthly Chart

Chart 51 Ramsay Healthcare (RHC) Monthly Chart

Chart 52– Resmed (RMD) Weekly Chart

Chart 53 - Fairfax Media (FXJ) Monthly Chart

Chart 54 - Flight Centre (FLT) Monthly

Chart 55 – Coca-Cola Amatil (CCL) Weekly

Chart 56– Myer Holdings (MYR) Weekly

Chart 57– JB Hi-Fi (JBH) Monthly

Chart 58– Harvey Norman (HVN) Monthly

Chart 59– Australian Dollar (AUD) Weekly Chart

The $A is 50-50 now it has hit major support but fundamentals remain negative.


Commodities

I remain bullish Gold, targeting the $US1400 area.

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 remains negative at present, but a bounce / consolidation is now overdue.

Iron Ore is showing a sign of a bottom, as downside momentum is falling. Interestingly, some short covering is emerged in the related stocks.

Chart 60 – Gold Monthly Chart

Chart 61 – Gold (in $A) Quarterly Chart

Chart 62 – Copper Weekly Chart

Chart 63 – Crude Oil Monthly Chart

Chart 64 – 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,

Shawn Hickman
marketmatters.com.au

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