Market Matters Report / The Hickman Report - Sunday 29th September 2013‏

By Market Matters 29 September 13

The Hickman Report - Sunday 29th September 2013‏

Hi All, September continued strongly last week, again touching new highs on the ASX200 since June 2008, the ASX200 closed up 30 points yet the Dow was down 193 points – sound familiar? Basically there has been no major theme change over recent weeks / months =- outperformance from Australia. Personally I believe this trend has much further to go as I am hearing plenty of people who have missed out and are hoping for a pullback to buy.

With the historically ideal time to buy equities looming large any sharp selloff in equities in coming weeks courtesy of politicians in America (Government Shutdown) or Europe (Italy raising its head again) should be bought aggressively.

The potential takeover of OZL by Glencore may inject more enthusiasm into the domestic resources sector. On a valuation basis equities look fairly priced until upgrades appear BUT markets often move both ahead of upgrades and into overpriced territory.

Relevant current seasonal statistics:

 

1.    Since 1950 September is the worst performing month for US equities, with the last 2 weeks the focal point.

 

2.    End of quarter restructuring plus general events has often led to nasty month end sell offs.

 

3.    Historically buying equities in early / mid October has proven very profitable into the New Year.

 

Bullish:   ASX200 (m), Banks (m), FOX (m), FTSE (w), IBEX (m), NAB (w), QBE (m), SUN (m), WES (m) & WOW (m).

Neutral:   AMP (w), ANZ (w), ASX200 (d) & (w), Banks (d), BHP (d) & (w), CSL (m), Hang Seng (w), MQG (w), NASDAQ (d) & (w), Nikkei (m) , NZ (m), RIO (w), SEK (w), STOXX (w), & WBC (w).

Bearish:    BHP(d), BHP $US (m), China (w), Copper (m), Dow (d) & (w), Gold (w), NCM (m), RIO (d) & (m), & S&P (d) & (w).

still believe we may have commenced an 8-9% correction in the S&P, but how far the ASX200 corrects, if at all, is much harder!

This week I would sell any recovery on Monday, 1/2 size, around 5300 basis Dec. SPI with stops over 5320


Super Portfolios Holdings











American Equities


The American indices still look set to have the predicted 8-9% correction, but I am bullish if we get that retracement. The daily charts are looking poor after failing to hold gains after the unexpected failure to Taper by the FED plus this is historically an awful period of time for US equities.












European Indices


The European indices now look net bullish  for 2013 with the FTSE starting to look very promising, I would be an aggressive buyer of an “abc” pullback towards 6350. The Spanish IBEX has reached my long term target plus the short term pattern targets a 10% rally minimum. The overall position of the European indices is the reason I have bought NAB ahead of ANZ after CBA went ex-div.

 




Asian Indices

Asian indices are gaining clarity and becoming positive. The Nikkei is trading out of control, under the weight of stimulus andintervention.




Australian Stocks

Buying sustainable yield and selling XJO calls has been a logical strategy over recent years, however, rising bond yields is taking the tarnish off this space and I am now recommending a more balanced portfolio’s. Overall the major stock’s in the ASX200 remain clearly positive but consolidation / a pullback in coming weeks to buy would not surprise. Basically look to buy weakness BUT there may well be some competition.

Stock picking is at a premium as is demonstrated by BOQ outperforming in the Banks and FMG in the resources space.
























Australian Dollar  

The $A is looking very heavy, the recent bounce was a little greater than anticipated breaking 95c, renewed weakness nowlooks likely with an ultimate target of 81-82c.


Commodities


The Gold chart looks bullish longer term targeting fresh recent highs, likely over $2,000 suggesting inflation - confirmation requires a close over 1480. On a weekly basis Gold and respective stocks are looking VERY bearish targeting new lows for 2013.

Also, the amount of money tied up in Gold ETF’s that did not exist pre 2004 is extremely scary!

Copper remains negative on a longer term basis, a very similar chart pattern to Newcrest Mining and we saw what happened there!!



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



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