Posts Tagged ‘eurozone debt’

Markets Higher As “Buy on Dips” Rules, But Volatility is Increasing: Weekly Market Wrap

Friday, February 8th, 2013

Traders globally have continued to push markets higher, although market volatility is rising as investors are becoming a little nervous over the strength of the markets since the start of the year, with the January performance the best in over a decade. Investors are turning their focus from the US earnings season across to Europe, where concerns are resurfacing about the debt crisis and the earnings season is well underway.

In today’s Analyst’s Eye we discuss the Yield Investment Strategy, identifying some potential investments and how you can protect your recent gains while still qualifying for future dividends.

The Australian market has continued its relentless rise (up consistently since last November) and is in bull market territory, up over 23% from its June lows and up over 14% from its November lows. There was a hiccup earlier in the week, but we are moving to new highs on the close.

US stock markets have held on to recent gains this week, hovering around all-time highs after recording their best January since 1994. The next target on the upside for the S&P 500 is still 1525 in the near-term. The S&P 500 is up 5.8% this year and is only 3.6% from all-time highs, while the Dow Jones is just 1.5% from all-time highs, hovering around the key 14,000 level. The CBOE Volatility index is up 4.7% for the week so far, indicating nervousness among investors after the recent spectacular run. Trader sentiment has been tempered by concerns over the eurozone debt crisis, after comments from the ECB president regarding the strength of the euro dollar which has a dampening impact European growth. Domestically weekly employment figures disappointed and a separate report showed productivity, the measure of employee output per hour, decreased at a 2 percent annual rate (down from 3.2 percent in the precious quarter), its worst performance in nearly two years. Over 300 S&P500 companies have reported, and of these 3 in 4 have exceeded earnings expectations, while 66% have beat on sales, with average earnings up 5% (compared to 1% in the previous quarter), according to Bloomberg surveys.

European stock markets paint a different picture and are down off their highs for the week, capping their biggest monthly gain since last July. These markets are still near their highest level in almost two years, as European companies began reporting earnings. The Europe Stoxx 600 is still at levels not seen since February 2011, but the index has retraced and is now only up 1.5% for the year, after recording its longest winning streak since 1997. The three benchmark indexes are all down for the week, with France, Italy and Spain leading the falls, as sellers stepped in after Spain lifted its ban on short-selling stocks. The Stoxx Index, a measure of the price of using options to protect against declines in the Index, edged higher again, after it surged 26 percent earlier in the week for its biggest jump since August 2011. Of the nearly 200 Europe Stoxx 600 companies that have reported just about half have exceeded earnings expectations, while 53% have beat on sales, according to Bloomberg surveys. The European Central Bank President Mario Draghi signaled policy makers are concerned about the euro dollar strength as it could dampen inflation and detract from the eurozone economic recovery.

Asian stock markets fell back from their highest levels in eighteen months with Japan leading the way, backing off 4-year highs. The MSCI Asia Pacific Index eased -0.3%. The move is on the back of resurfacing concerns over the eurozone debt crisis. The index is still up around 11% from its June lows, led by Japanese stocks on optimism that the new government will take the necessary steps to fight deflation. Of the 255 companies on the MSCI Asia Pacific index that have reported earnings so far this quarter, about half have exceeded profit expectations, while half missed sales projections, according to Bloomberg surveys. In Japan the market made its highest close since September 2008 this week, while in Hong Kong the market had its largest fall since November earlier this week, where the selling was due to renewed concern about the eurozone debt crisis.

The Chinese market has fallen for the first time in nine sessions, after it recorded its longest winning streak since last February and is up 24% from its 4-year lows in December. The gains this week were led by the technology and financial sectors which have lagged YTD, but the energy sector failed to participate, after China said its demand for coal is peaking. Earlier in the week this market formed a golden cross, where the 50-day is above the 200-day moving average, confirming the bullish move since late last year. According to Bloomberg, on the past five occasions in the past two decades that a golden cross has occurred, the market has jumped an average of 6.3% in the following month. Of note Tom DeMark, who made his name as the creator of indicators that show market turning points, said the Chinese market will retreat around 8 percent before resuming its up-move, as a surge in Chinese stocks has exhausted buyers.

The Aussie market is finishing the week higher and has now risen eleven of the past twelve weeks. The market is testing the 4965 level near-term. The market held above the 4870 level and is now hovering above the 4950 level and looks set to test levels not seen since mid-2008. Our market continues to rebound strongly from the November lows, on the back positive sentiment around the globe. The Aussie banks have continued higher in the chase for yield, but we have also seen money pour into industrial and resource stocks, as investors look for a turnaround in these sectors for 2013. We are moving into the local reporting season with Newcorp, Telstra and NAB reporting yesterday and Newcrest Mining reporting today. Retail sales figures disappointed, both in December (down -0.2%) and in the December quarter (up a miniscule 0.1%). The RBA said inflation remains benign at 2.25%, employment is expected to ease, the mining investment cycle is topping out and there are concerns where the economic growth will come from in the near-term. The unemployment figures came in slightly better-than-expected at 5.4%.

Key levels for the index next week will be 4880 and 5000, with 4930 the key short term pivot level. Volatility remains subdued and affords cheap protection as the markets are moving higher. Traders continue to be optimistic ahead of the Aussie reporting season, on the back of positive news flow regarding the state of the Chinese, US and European economies.

Protection is still cheap and investors can have cheap insurance for their portfolio and could look to put their money to work, while reducing their risk by using options and warrants strategies. Remain attuned to the news from overseas, particularly from the eurozone (earnings), China and the US (earnings). Monitor the US dollar for a guide to the future direction of commodities and equities prices.

Contact D2MX Advisory on 1300 610 024 and we can help you trade using a number of strategies that will give you the tools to navigate this market and help you improve your returns on investment.

Michael Hevern
Investment Adviser D2MX Advisory

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of D2MX Pty Limited ABN 98 113 959 596, AFSL No. 297950 (D2MX), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd. Opinions, conclusions and other information expressed in this report are not given or endorsed by D2MX, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.
Disclaimer: Using leverage to invest can be a two edged sword, as it can magnify your returns when the stock price rises, but will in turn magnify the losses if the trade does not perform as expected.

Post to Twitter

Tags: , , , , , , ,
Posted in Stock Market Analysis | No Comments

Weekly Market Wrap: Markets Fall As Investor Optimism Over Stimulus Measures Fades

Friday, September 28th, 2012

Traders continued to take profits off the table this week, but markets remain at key multi-month and multi-year highs. The US and benchmark European markets remain in the upward channels that have been in place since May. In Asia markets are backing off 6-month highs, with the exception of China which is testing 2000, a level not seen since the end of the GFC.

US stock markets had recorded five straight days of falls, with the S&P500 posting its longest retreat since July, as concern grew over a worsening euorzone debt crisis and comments from the President of the Philadelphia Federal Reserve, Charles Plosser, who said new bond buying (QE3) announced by the Fed this month probably will not boost growth or hiring.

Despite the rise in the US markets last night, overall the markets are still lower for the week. The Volatility Index has been on the rise this week as investors buy options for protection near-term. The Dow Jones and the S&P500 are both close to the all-time highs of October 2007, as investors pushed equity prices higher due to optimism about better-than-estimated earnings and central bank stimulus measures. The Dow Jones is around 6% from its peak and the S&P500 is just 9% away. Trading volumes on the NYSE continue to grow and remain above the three-month average.

European stock markets have recorded their biggest drop in two months this week, with a slight relief rally overnight. The Stoxx Europe 600 Index plunged -1.8% in a single session, its largest drop since late July, however this index is still up 16% from its June lows, as the European Central Bank policy makers approved a plan to implement an “unlimited” bond-buying program.

Traders were spooked by the Ifo Economic Institute report that German business confidence fell for the fifth straight month to the lowest level since February 2010. The reading was worse than forecast and confirms that the eurozone debt crisis is impacting the region’s economies, which are falling deeper into recession. Investors were already nervous about the leaders of Germany and France being in conflict over plans to unify the debt-laden European banking system. Also weighing on trader sentiment were riots over austerity measures, news that Spanish bond yields surged back above 6% (the highest level in three weeks), concerns over Spanish and Greek debt escalating, and the downbeat comments from the US Federal Reserve member suggesting the QE3 bond buying program may not be enough to stimulate the job market in the US.

Asian stock markets are looking to end flat for the week, as they recover from growing concerns over slowing global economic growth and an ongoing territorial dispute between China and Japan weighed on sentiment. The MSCI Asia Pacific is now up around 5% this quarter, on the back of central bank easing in Europe, the US, Japan and China as they took action to stimulate economic growth, while it is up around 8% for the year. During the week the Japanese market recorded its largest daily percentage decline since May, as the strong yen and the ongoing territorial dispute between China and Japan continued to weigh on sentiment. The Shanghai Composite had fallen -7.7% this year on concern the government is not loosening monetary policy or introducing stimulus policies fast enough to counter the slowdown in the economy. The index sold down to the 2000 level, as traders vented their concern. This has prompted the PBOC to act on stimulus as Chinese stocks have now risen for the first time in three days after reports that the People’s Bank of China added a record net 365 billion yuan ($US56 billion) to the financial system this week (a form of quantitative easing), as cash demand rises before their week-long holiday.

In commodities crude-oil prices fell below $US90 this week, the lowest level in two months, but crude-oil appears to be rebounding in the short-term at least. On the flip side gold prices at around $US1,750 are on track to record their best quarterly gain in over two years, currently up 10% since the start of July, due to central banks boosting stimulus measures to support global growth. Copper remains near 4-month highs and is on track to finish up around 7% for the quarter.

The S&P/ASX 200 index is currently trading at 4380 and is looking to close the week lower. Key levels for the index next week will be 4330 and 4450, with 4360 the key short term pivot level. Traders are squaring off their accounts for the end-of-quarter and now need to decide if all this stimulus will be enough to boost global growth. The mining and mine services sectors have been in focus this week, as commodity prices have continued to pull back and data showed slowing global growth.

In our market the defensive sectors supported the market this week, as investors took profits on their growth-sensitive stocks near-term. Telstra, Real Estate REITs and health-care stocks saw buying in to the end-of-quarter. The financials and materials sectors have resumed their upward path. The financial and info-tech sectors held around 12-month highs. The materials, industrials and energy sectors eased over the week, as trader optimism over the central bank stimulus faded.

Remain attuned to the news from overseas, particularly from the eurozone, China, Japan and the US. Monitor the performance of Italian and Spanish borrowing costs, China-Japan tensions and the US dollar for a guide to the future direction of commodities and equities prices.

Protection is very cheap at the moment and investors should have protection in place for their capital, and could look to put their money to work while reducing risk by using options and warrants strategies. Contact me at D2MX Trading on 1300 610 024 and I can help you trade using a number of strategies that will give you the tools to navigate this market and help you improve your returns on investment.

Michael Hevern
Investment Adviser D2MX Advisory

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of D2MX Pty Limited ABN 98 113 959 596, AFSL No. 297950 (D2MX), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd. Opinions, conclusions and other information expressed in this report are not given or endorsed by D2MX, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.
Disclaimer: Using leverage to invest can be a two edged sword, as it can magnify your returns when the stock price rises, but will in turn magnify the losses if the trade does not perform as expected.

Post to Twitter

Tags: , , , , , ,
Posted in Stock Market Analysis | No Comments

Weekly Market Wrap: Chinese GDP Inline – Hopes For “Soft” Landing

Friday, July 13th, 2012

Markets have had a choppy week, as traders have plenty to be concerned about. European markets have held up surprising well, while the US markets have drifted modestly lower. Asian markets have underperformed across the board, as global growth continues to slow and QE3 has been set aside for now.

US stock markets fell overnight and are down for a sixth consecutive day, as traders fretted over corporate earnings and concerns about slowing global economic growth. The three benchmark indexes all finished down, as investors digested the minutes of the FOMC meeting, which did not give any firm indication of when QE3 will be forthcoming. In the broader market the mining, financials and technology sectors have led the declines. Stocks have been drifting lower, as the indexes have tentatively bounced off their 200-day moving average, but still remain below their 50-day moving average, which is a cause for concern near-term. S&P 500 earnings are projected to decrease 1.8% in the second quarter, the first drop in almost three years according to analysts surveyed by Bloomberg. Bank of America strategists have reduced earnings forecasts for S&P 500 companies by -1.4% for this year and next year. Even Warren Buffett, the chairman of Berkshire Hathaway, has ratcheted back his outlook, commenting that economic growth in the US is slowing even as the housing market shows signs of rebounding, but US unemployment has remained stubbornly above 8% for the past three years. Investors are going to have to wait until the next financial leaders’ meeting at Jackson Hole in late August for any update on QE3.

In Europe stock markets have suffered their biggest declines in over two weeks. Investors showed their concern over the slowing global growth, and hopes faded that the Federal Reserve would soon act to bolster the US economy, as QE3 was set aside by the Federal Reserve. The three benchmark indexes are all down from their highs of the week. The Stoxx Europe 600 Index is down -0.6% for the week and at this rate the index is set to record its first negative weekly performance in the past six weeks. However, trader sentiment has been buoyed this week by news that European finance ministers had reached a deal to grant the Spanish banking sector access to EUR30 billion in aid by the end of the month, as the first tranche of the bailout for the Spanish banks. They also announced that Spain will be given extra time to hit a target for reducing its budget deficit. This move is seen as a major step towards the formation of a eurozone banking union, which would have the goal of eventually using the euro-area bailout fund to recapitalise banks directly instead of saddling the government with the debts. The Spanish and Italian 10-year government bond yields have fallen sharply. Across the region the mining sector has led the falls this week with a number of broking houses ratcheting down earnings forecasts and cutting ratings.

Asian stock markets have pulled back this week, ahead of the Chinese GDP report, and as jobs data from Australia disappointed. Across the region we have seen broad-based selling, with mining and energy sectors leading the declines, but financials and cyclicals have also weighed. In Japan the Nikkei Stock Index fell for six days, extending its longest losing streak since April. In Hong Kong the Hang Seng Index slumped nearly -4% for the week, and in China the Shanghai Composite Index is down over -2%. Chinese GDP data has been released, and came in line with expectations of 7.6% (consensus was for 7.7%), confirming that Chinese economic growth has fallen below 8% for the first time since 2009.

In commodities crude-oil prices bounced another 2% in the past week and are now above $US86 again, as US inventories backed off their 22-year highs. Gold prices drifted down after QE3 was set aside, and gold is trading around $US1,565 again. Copper prices are hovering around their 200-day moving average.

The Australian market has drifted back into its 2-month trading range this week, and is tentatively holding around the key pivot level of 4080. Sentiment has been mixed, driven by news from the US and the eurozone, as hopes of US central bank easing (QE3) faded. Major market sectors have been missed over the past week. The 4200 level is the next crucial resistance level and 4120 is a pivotal level for next week. The next few sessions will determine whether we will see some buying in the energy and materials sectors, which have been hammered this week.

In our market the defensive sectors continue to outperform, with Telstra, Real Estate REITs and health-care stocks trading higher, as investors seek out stocks that can deliver consistent yield in this low rate environment. The materials and energy sectors broke down to below their 2011 lows. The industrials sector also broke support, while banks have found support and are testing new monthly highs, as investors turn to dividend yield. The Australian jobs report showed employers cut payrolls by 27,000 workers in June and the unemployment rate increased to 5.3%, which disappointed investors.

Investors should have protection in place for their capital, and could look to reduce their risk by using options and warrants strategies. Look to pick up value stocks that pay consistently high dividend yields, when they reach your buy levels.

Remain attuned to the news from overseas, particularly from the eurozone, China and the US, as the US reporting season continues. Monitor the performance of Italian and Spanish borrowing costs, China and the US dollar for a guide to the future direction of commodities and equities prices.

The S&P/ASX 200 index is currently trading at 4095 and is testing breakeven levels for the year. Key levels for the index next week will be 4050 and 4200, with 4120 the key short term pivot level.

By Michael Hevern
D2MX Trading Desk

For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research.

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of D2MX Pty Limited ABN 98 113 959 596, AFSL No. 297950 (D2MX), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd. Opinions, conclusions and other information expressed in this report are not given or endorsed by D2MX, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.
Disclaimer: Using leverage to invest can be a two edged sword, as it can magnify your returns when the stock price rises, but will in turn magnify the losses if the trade does not perform as expected.

Post to Twitter

Tags: , , , , , , , ,
Posted in Stock Market Analysis | No Comments

Weekly Market Wrap: Traders Sell On The News

Friday, June 22nd, 2012

Well, investors had an eventful week, as promised, and next week European Union leaders will likely keep traders on edge as they meet for a summit on 28-29 June.

The week started off on a positive note as the pro-bailout New Democracy party came in first in Sunday’s Greek national election, and they have now sworn in a new coalition parliament.

Trader sentiment was also boosted by the news out of the G20 meeting, where European officials pledged to take “all necessary policy measures” to defend the euro currency union, as world leaders endorsed a road map for tighter integration to cut borrowing costs and prevent further damage to the global economy. However German Chancellor Angela Merkel declined to commit to direct sovereign debt purchases through the eurozone bailout fund, highlighting that there is still work to do to get consensus on this initiative. The next critical meeting is the summit of European Union leaders in Brussels on 28-29 June.

US stock markets traded to one-month highs this week, having recovered 6% from the recent lows. However they sold down sharply overnight, in a delayed reaction to the Fed. The markets were at key levels, testing the 50% retracement levels from the May sell-off. The Federal Reserve has now committed to extending its Operation Twist program to replace short-term bonds with longer-term debt by $US267 billion through to the end of 2012, however traders were disappointed because they had speculated on a more aggressive QE3 approach. It is worth reflecting that the previous stimulus measures by the Fed, including two rounds of quantitative easing through asset purchases known as QE1 and QE2, helped the S&P 500 double from its bear-market low in 2009, while US Treasury yields reached the lowest on record amid demand for safety away from the eurozone debt crisis.

European stock markets gained over the past couple of weeks, but are now running into 50-day resistance levels. The Greek market has been the standout, up around 25% from its recent lows as a new coalition government has been sworn in, ending the political limbo that began at the failed election on May 6th. German Chancellor Angela Merkel is still reluctant to allow the use of Europe’s dual bailout funds, the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM), to buy debt of countries like Italy and Spain and provide liquidity in the eurozone financial system.

In commodities crude-oil has plunged to an eight-month low, as US inventories hit 22-year highs. Gold prices pulled back this week, as the US dollar rose in the absence of a QE3 announcement. The CRB commodities index closed at its lowest level since 2010, and mining and energy stocks across the globe remain under pressure near term.

Asian stock markets have generally taken their cue from Europe this week, and sold off heavily yesterday on the back of Chinese manufacturing data declining for an eleventh month out of the past twelve. HSBC preliminary data shows that Chinese manufacturing is set to contract in June, matching the streak during the global financial crisis (GFC), signaling that the Chinese government stimulus has yet to reverse the domestic economic slowdown. The Chinese stock markets fell below a key level overnight, dragging the benchmark index to the lowest level in 3 months, after a report showed Chinese manufacturing shrank for an eighth consecutive month in June. Traders are concerned that the growth slowdown is deepening in China and the sovereign debt issues are impacting corporate earnings going forward. Selling was broad-based but the miners and energy stocks suffered the brunt of the selling. The Japanese market remains around 1-month highs.

The Australian market has traded sideways again this week, and is again trying to hold around the key 4000 level. Sentiment has remained cautious, driven by news from the eurozone and hopes of central bank easing. Major market defensive sectors have been tentatively holding on to the support levels of last week.

In our market the defensive sectors continue to outperform, with Telstra, Realestate REITs and health care stocks holding ground, as investors seek out stocks that can deliver consistent yield in this low rate environment. The materials and energy sectors continue to underperform on the back of lower commodity prices, but banks are tentatively looking to find some support as investors turn to dividend yield.

On the S&P/ASX 200 the 4000 level will now be a crucial support level and the 4080 level is again pivotal for next week. We have not seen capitulation by the bulls as yet, which could come about if the current weekly support levels are breached at 3980, in which case we could see the 3950 and then the 3850 levels tested.

The S&P/ASX 200 index is currently trading at 4049 and is testing breakeven levels for the year. Key levels for the index next week will be 3930 and 4160, with 4080 the key short term pivot level. Tonight traders will be reacting to Goldman Sachs’ recommendations to clients to build on their short positions in the broad S&P 500 index, on expectations of further economic weakness. Also, Moody’s Investors Service has announced further downgrades of the credit ratings of 15 lenders and securities firms with exposure to the global capital markets.

Investors should have protection in place for their capital, and could look to reduce their risk by using options and warrants strategies. With the sustained selling we have endured over the past few weeks we are looking to pick up value stocks that pay consistently high dividend yields, when they reach our buy levels.

Remain attuned to the news from overseas, particularly from the eurozone (the EU leader summit), now that China is facing another month of contracting manufacturing activity, and the US, as the US markets back off their 3-week highs. Monitor the performances of Spain, Italy, China and the US dollar for a guide to the future direction of commodities and equities prices.

Contact me at D2MX Trading on 1300 610 024 and I can help you trade using a number of strategies that will give you the tools to navigate this market and help you boost your returns on investment. For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research.

By Michael Hevern
DM2X Trading Desk

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of D2MX Pty Limited ABN 98 113 959 596, AFSL No. 297950 (D2MX), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd. Opinions, conclusions and other information expressed in this report are not given or endorsed by D2MX, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.
Disclaimer: Using leverage to invest can be a two edged sword, as it can magnify your returns when the stock price rises, but will in turn magnify the losses if the trade does not perform as expected.

Post to Twitter

Tags: , , , , , , ,
Posted in Stock Market Analysis | No Comments

Weekly Market Wrap: Testing Time for Investors

Friday, June 8th, 2012

Investor nerves have been tested this week as volatility increased. Traders in the northern hemisphere are gearing up for summer and global growth is declining for a third straight year.

The bears remain in control of the markets, although stocks did tick up on hopes that the central banks will make a move towards quantitative easing. These expectations are proving to be premature, as the ECB and EU leaders are not likely make a move until after a government is formed by the Greek elections on 17 June. In the US the Federal Reserve Chairman Ben Bernanke stopped short of signaling new stimulus measures in testimony before Congress.

US markets are again testing their 200-day moving averages, which may end up acting as resistance near-term. Economic data continues to point to slowing economic growth and the monthly jobs data showed unemployment remains stubbornly high at 8.1%.

In the eurozone the Greek and Spanish markets were pummeled on debt contagion concerns, and even the German market sank lower, due to worry about growth in the region. The UK market had a shortened trading week.

Stocks did spike as investors were optimistic that the European Stability Mechanism could inject capital directly into eurozone banks, which would have the advantage of not loading the country debt levels. The ECB left interest rates at 1%, but said growth remains weak and the economic outlook in the eurozone is subject to increased downside risks, leaving the door open for a rate cut in July.

Asian markets are testing multi-year lows and at this time are bouncing, helped by news overnight that the Chinese central bank said it would lower benchmark interest rates on loans and deposits by 25 basis points.

There was a flight to safety, but the US dollar backed off the high levels not seen since mid-2010, which is putting pressure on commodities which are priced in US dollars. Crude-oil is at 6-month lows, copper is at 4-month lows, gold had a reprieve but is again heading to 10-month lows again, while silver is hovering around 15-month lows. This is putting pressure on the mining stocks across the globe, even despite the news overnight of an interest rate cut in China.

The Australian market has been volatile this week, and is trying to hold around the key 4080 level. Sentiment has been mixed, driven by news from the eurozone and hopes of central bank easing. Major market sectors have been tentatively holding on to the support levels of last week.

In our market the defensive sectors continue to outperform, with Telstra, real estate REITs and health-care stocks holding ground, as investors seek out stocks that can deliver consistent yield in this low rate environment. The materials sector continues to underperform on the back of lower commodity prices, but banks found some support as investors turn to dividend yield.

The Aussie market has been trying to find some support again this week, at a level established back in November around 4080. On the S&P/ASX 200 the 4150 level will now be a crucial resistance level and 4080 is again a pivotal level for next week. We have not seen capitulation by the bulls as yet, which could come about if the current weekly support levels are breached, in which case we could see the 3950 and then the 3850 levels tested.

Investors should have protection in place for their capital, and could look to reduce their risk by using options and warrants strategies. With the sustained selling we have endured over the past few weeks we are looking to pick up value stocks that pay consistently high dividend yields, when they reach our buy levels.

In this week’s Analyst’s Eye we discuss a Trading Plan For June, and the D2MX Financial Advisory team can help you trade the themes discussed in this article. Call me on 1300 610 024 for further information. Options remain an excellent form of insurance and are an excellent instrument for speculation.

Remain attuned to the news from overseas, particularly from the eurozone, now that China cut interest rates in its move towards policy easing, and the US, as the US markets trade around their 200-day moving averages. Monitor the performance of Greece, Spain, China and the US dollar for a guide to the future direction of commodities and equities prices.

The S&P/ASX 200 index is currently trading at 4061 and is testing breakeven levels for the year. Key levels for the index next week will be 3950 and 4180, with 4080 the key short term pivot level.

By Michael Hevern
DMX Trading Desk

For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research.

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of D2MX Pty Limited ABN 98 113 959 596, AFSL No. 297950 (D2MX), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd. Opinions, conclusions and other information expressed in this report are not given or endorsed by D2MX, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.
Disclaimer: Using leverage to invest can be a two edged sword, as it can magnify your returns when the stock price rises, but will in turn magnify the losses if the trade does not perform as expected.

Post to Twitter

Tags: , , , , , , , ,
Posted in Stock Market Analysis | No Comments

Weekly Market Wrap: Traders Cheer the Greek Debt-Swap Deal

Friday, March 9th, 2012

Investors had plenty of news to digest this week, but the major market mover has been the Greek debt-swap deal, which was at risk of being derailed by the private-sector bond holders.

Traders pushed markets down for their biggest single day losses since last November, with the Dow Jones recording its first triple digit loss for the year. The selling was sparked by renewed concerns that the private-sector was reluctant to participate in the Greek debt-swap, which was crucial for Greece to gain access to its second bailout funding.

US markets have backed off key levels this week, with a sharp dip coming after Greece had debt-swap issues, but the markets have since recovered to record their best two-day rally for the year. Commodity prices were sold-down sharply earlier in the week as traders took their profits off the table, but they appear to be finding support again in recent days. There will be some telling data released tonight, with the Non-Farm Payroll monthly employment report, which is expected to report an unemployment rate that will hold steady at 8.3% in February, and that the economy added 213,000 jobs. On the corporate front Apple has released a new product suite and has reached $US500 billion in market capitalisation.

European traders have driven global sentiment this week, with troubles over the participation rate of private-sector creditors in the Greek debt swap. However news overnight has confirmed that the participation rate will be high enough for Greece to get the second bailout package, worth EUR130 billion, and avoid a “disorderly” default. At last report private-sector creditors representing 75% of outstanding Greek debt have agreed to exchange their holdings for new debt.

Italian government bond yields fell to 4.8% overnight, their lowest level since mid-2011, while the euro dollar climbed sharply against the US dollar. The other issue for the week was the slowing eurozone growth rate, as the ECB and the Bank of England held interest rates steady, but the ECB has said that eurozone economic growth will shrink by 0.1% this year (down from 0.3% growth), and the ECB now expects 2013 growth of 1.1% (down from 1.3%). In Germany however, the market has been supported by news that industrial production for January exceeded expectations, as production rose 1.6% on the previous month.

Asian markets remain at multi-month highs, with Japanese stocks benefiting from a weaker yen and the Chinese Shanghai Composite Index holding above 2400, its key 6-month pivot level, after traders cheered the news that the Chinese central bank is considering further easing. The Hong Kong and South Korean markets are at levels not seen since July last year, as traders shrugged off comments from Chinese Premier Wen Jiabao, at the annual National People’s Congress, that the Chinese economic growth target was cut to 7.5% for 2012, after keeping it at 8% for the past eight years, while the annual inflation target was set at 4%.

Commodity prices initially sold-down on the news about slowing growth in the eurozone, China and Brazil, but they have since recovered as we finish off the week, with the gold and silver markets and the crude oil prices all bouncing off six-week support levels.

The Australian earnings season continued this week, and the dividend season is drawing to a close. We have been driven by global forces this week, with the materials sector suffering from lower commodity prices.

The Aussie market has broken down through its 50 day moving average, and the index is attempting to find support at its six-month pivot level around 4180. On the S&P/ASX 200 the 4180 level is the crucial support level and the 4320 level becomes increasingly more important each time it is tested. This week we found support around the 4150 level but we are now trading higher again. A number of the S&P/ASX sectors are bouncing off their 150 day moving averages, having found support after their sell-off earlier in the week. These include Energy, Consumer Discretionary, and Industrials. There continues to be rotation out of the more defensive sectors like Utilities and Telecoms, while Materials and Financials have broken down from their 50 day support levels.

Traders are eager to lock in profits in this market, so reduce your risk by using options strategies. The MDS Financial Advisory Services team can help with these trades. Call 1300 610 024 for further information. Investors should also be looking to utilise options strategies to protect their positions, as options are a relatively cheap form of insurance, even though volatility has picked up of late.

Keep an eye on the Aussie reporting season as it winds down and remain attuned to the news from overseas, particularly from the eurozone and China in relation to easing policies, and the US as their markets hover around multi-year highs. Monitor the performance of the US dollar for a guide to the future direction of commodities and equities prices.

The S&P/ASX 200 index is currently trading at 4198 and is holding above the key medium-term pivot level around 4180. Key levels for the index next week will be 4140 and 4280, with 4200 being the key pivot level.

By Michael Hevern
MDS Trading Desk

For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research.

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of MDS Financial Services Pty Limited ABN 28 088 190 283 AFSL No. 333298 (MDS), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd. Opinions, conclusions and other information expressed in this report are not given or endorsed by MDS Financial Services Pty Ltd, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.

Post to Twitter

Tags: , , , , , , ,
Posted in Stock Market Analysis | No Comments

Weekly Market Wrap: Traders Hold Their Nerve

Friday, February 24th, 2012

Traders have held their nerve this week, with markets holding at key levels after the Greek debt deal was finalised.

On the Aussie market the 4300 level is the key level, and pressure is mounting for a break of this level, though there has been some caution as the dispute over the Prime Minister’s position is being resolved. In the Analyst’s Eye today we discuss the trade that is setting up for the market. Note that the 4350 to 4300 level on the S&P/ASX 200 has held as resistance since July 2010.

Globally markets are holding on to recent gains, with the European markets holding up as Greece lives to default another day and despite comments that eurozone growth will slow in 2012. Asian markets are at multi-month highs, with Japanese stocks benefiting from a weaker yen and the Chinese Shanghai Composite Index finishing above 2400, its key 6-month pivot level, after traders cheered the news that the Chinese central bank is moving to inject CNY400 billion into the Chinese banking system, after announcing a cut in banks’ reserve requirement ratio to 20.5% from 21%.

The US stock markets are hovering around multi-year highs, as the Dow Jones Industrial Average broke the 13000 level for the first time since May 2008 before the GFC, but has since eased back from this level. Energy stocks have been in focus, as crude-oil melted higher to $US109, while gold is higher at $US1,780.

In Australia, the earnings season heated up this week, with the general themes being that we have some sharp short covering rallies that even retail stocks have joined in, banks are trading sideways, miners are cashed up and will benefit from China easing, but earnings have been tempered by delays due to weather events and their CAPEX budgets are expanding in the next few years. Companies are still forecasting a tough 2012, particularly in the first half year.

The bulls have won out this week, but there is still a struggle as the 4300 medium term pivot level is retested. The main gainers have been the mid caps that handed down results that beat estimates. For example Onesteel jumped over 50% this week.

The Aussie market is pushing up against its 200 day moving averages, and the index is looking to close higher for a seventh week out of the past nine. On the S&P/ASX 200 the 4180 level is the key support level and it has held once again, as the market looks to be setting up for an assault on the 4320 level near-term.

This week we again found support around the 4180 level but we are now trading at the 200 day moving average, which sits around 4305. A number of the S&P ASX sectors are trading above their 150 day moving averages, including Energy, Consumer Discretionary, Technology and Industrials, and their appears to be some rotation out of the more defensive sectors like Utilities and Telecoms, while the Materials and Financials are testing overhead resistance and would need to break through for the market to punch through the 4300 level.

The dividend season rolls on, so you can look to boost your yields through options strategies. The MDS Financial Advisory Services team can help with these trades. Call me on 1300 610 024 for further information. Investors should also be looking to utilise options strategies to protect their positions, as options are a relatively cheap form of insurance, given the falling volatility of late.

Keep an eye on the Aussie reporting season and the political situation, and remain attuned to the news from overseas, particularly from the eurozone and China in relation to easing policies, and the US as their markets hover around multi-year highs. Monitor the performance of the US dollar for a guide to the future direction of commodities and equities prices.

The S&P/ASX 200 index is currently trading at 4271 and is holding above the key medium–term support level around 4180. Key levels for the index next week will be 4220 and 4320, with 4250 the key pivot level.

For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research.

By Michael Hevern
MDS Trading Desk

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of MDS Financial Services Pty Limited ABN 28 088 190 283 AFSL No. 333298 (MDS), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd. Opinions, conclusions and other information expressed in this report are not given or endorsed by MDS Financial Services Pty Ltd, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.

Post to Twitter

Tags: , , , , , , ,
Posted in Stock Market Analysis | No Comments

Weekly Market Wrap: Traders Cautious While Awaiting Greek Bailout Resolve

Friday, February 17th, 2012

Traders have been cautious this week due to disappointment over delays on the Greek debt bailout deal. On the Aussie market the 4300 level proved to be a barrier once again! The 4350 to 4300 level on the S&P/ASX 200 has held as resistance since July 2010.

Globally markets are in a holding pattern, as European financiers procrastinate over the resolution of the Greek debt bailout and this has served to weigh on sentiment. Even the news from the People’s Bank of China Governor Zhou Xiaochuan, who said that he believes Europe can solve its sovereign issues and that China will expand investments in the region, failed to spark buying.

Sentiment was dampened earlier in the week as the Moody’s Investors Service downgraded a number of European sovereign debt ratings, including those of Spain, Italy and Portugal, and cut its outlook on AAA-rated France, Austria and the U.K. Also weighing on the mood was the S&P downgrade of 34 of the 37 Italian banks it covers, highlighting their issues with sovereign debt.

European markets are holding up well this week, despite news overnight that the Greek debt deal was still not finalised. Greece needs a EUR130 billion loan tranche, before its March 20 bond redemption payment becomes due, to avoid default. Across the region financials have been weighing on sentiment, due to the prospect of further downgrades for the eurozone banks. The Moody’s Investors Service has placed the ratings of 114 financial institutions in the eurozone countries on review for possible downgrade, pointing to the banking system’s vulnerability to the euro-zone sovereign-debt crisis.

In the US the three major markets are all around 3-year highs, as domestic economic data continues to surprise to the upside. Positive employment data has boosted momentum and the tech-heavy Nasdaq is still outperforming, up 16% since its December lows and up 26% from its October lows. US traders are choosing to focus on the domestic economy, while keeping one eye on the developments in Greece. Expect a pop, if and when the Greek debt-deal gets resolved, but this may be an opportunity to lighten up, especially if trading volumes fail to pick up on any breakout.

Asian stock markets have been holding up as well. In Japan the Nikkei Stock Average rose after the Bank of Japan surprised the market by expanding its asset-purchase program. The Hong Kong market is breaking to 6-month highs. In China the market is holding at 2-month highs, despite the central bank saying in its quarterly monetary policy report that the country still faces the risk of slower growth and higher inflation and that it must continue to guard against inflation risks. Financials have been under pressure and growth-sensitive resource stocks have also eased.

In Australia, the earnings season heated up this week, with the general themes being: retailers are struggling and expecting consumer confidence to deteriorate into 2012; banks are struggling to achieve growth in the current environment; and miners are cashed up but earnings have been tempered by delays due to weather events and their CAPEX budgets are expanding in the next few years. Companies are forecasting a tough 2012, particularly in the first half year.

The bears are winning the battle for control of our market this week and trading volumes continue to steadily improve. The ABS surprised this week, reporting the unemployment figures dropped to 5.1%. Financials were in focus with the majors increasing interest, despite the RBA keeping rates on hold. CBA and Westpac reported results, and took the opportunity to justify their out-of-cycle rate increases and warned of further jobs losses in the sector. The concerning theme out of the bank results was the anemic credit growth, as retail banking is struggling with rising funding costs, while provisions and impairments are at record lows as the economy continues to slow.

The Aussie market dropped below its 50-day moving averages for the first time in two months. On the S&P/ASX 200 the 4180 level is the key pivot level and if this can hold the market could to be setting up for an assault on the 4320 level near-term, but if this level gives way the next support level will be 4080.

This week we found support around the 4180 level but we are now trading below the 13-day moving average, which sits around 4240. Many of the S&P/ASX sectors are trading below their 150-day moving averages (MAs), with the exception of Telecoms, Industrials and Utilities. The Energy sector is holding up, as crude-oil prices hold around the $US100 level.

The dividend season is underway, so you can look to boost your yields through options strategies. The MDS Financial Advisory Services team can help with these trades. Call me on 1300 610 024 for further information. Investors should also be looking to utilise options strategies to protect their positions, as options are a relatively cheap form of insurance, given the falling volatility of late.

Keep an eye on the Aussie reporting season, and remain attuned to the news from overseas, particularly from the eurozone, Greece and China in relation to easing policies, and the US with its earnings season. Monitor the performance of the US dollar for a guide to the future direction of commodities and equities prices.

The S&P/ASX 200 index is currently trading at 4201 and is only just holding above the key medium-term pivot/support level around 4180. Key levels for the index next week will be 4150 and 4250, with 4180 the key pivot level.

By Michael Hevern
MDS Trading Desk
Authorised Representative 417348, MDS Financial Services Pty Ltd AFSL 333298.

For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research.

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of MDS Financial Services Pty Limited ABN 28 088 190 283 AFSL No. 333298 (MDS), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd . Opinions, conclusions and other information expressed in this report are not given or endorsed by MDS Financial Services Pty Ltd, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.

Post to Twitter

Tags: , , , , , , , ,
Posted in Stock Market Analysis | No Comments

Weekly Market Wrap: Global Markets Reach Key Levels

Friday, February 3rd, 2012

The Aussie market continues to hold on to its January gains, having recorded its best January performance in over a decade. Volatility continues to contract, as investors remain comfortable with the current state of the market. The retailers continue to have the greatest level of short interest for stocks on the S&P/ASX 200 index. Investors should be taking this opportunity to protect their recent gains.

The bulls continue to control the market as we start February, and trading volumes are steadily improving. February is a busy time for Aussie investors as the reporting season gets underway and many stocks will be going ex-dividend in the next six weeks. Over a dozen stocks hand down their interim results on Tuesday.

US investors had their best January since 1997, as the Dow Jones Industrials rose 3.4% for the month, the S&P 500 was up 4%, while the Nasdaq outperformed up 8%. The earnings season has been exceeding expectations and the US financials have held on to their record gains. Manufacturing figures are improving globally and a reading on US manufacturing came in at 54.1 for January (up from 53.1). There is a lot of hype about Facebook’s announcement to IPO to the tune of $5 billion and Apple has been confirmed as the largest corporation on the boards (outsizing Exxon Mobile Corporation).

The Federal Reserve Chairman Ben Bernanke addressed US lawmakers overnight, describing the pace of the US economic recovery as “frustratingly slow” and warned of the importance of addressing the US’s fiscal challenges, highlighting that eurozone sovereign-debt crisis is an example of out-of-control fiscal policies. Bernanke fell short of reaffirming a QE3 package, however. Traders will be focusing now on the US Non-Farm Payroll monthly employment figures out tonight.

European markets are continuing to melt-up, with the European Stoxx 600 index holding at 6-month highs. Globally investor sentiment has been boosted by successful eurozone bond auctions with borrowing costs continuing to pull back, despite the Fitch ratings agency downgrading Italy, Spain, Belgium, Slovenia and Cyprus, and cutting the outlook for Ireland. Sentiment has been buoyed by the news of a successful “fiscal compact”, as all but two of the European Union countries have agreed to sign a treaty designed to stop overspending on the eurozone, and put an end to the bloc’s disastrous debt crisis, while also pledging to stimulate growth across the region.

European shares have continued higher this week after data showed that the ISM manufacturing index climbed to 54.1% in January. Additionally manufacturing data from Germany, the U.K. and the eurozone all boosted sentiment as the German PMI rose to 51.0 in January (up from 48.4), while eurozone PMI rose to 48.8 in January (above estimates of 48.7), while London the UK PMI hit an eight-month high of 52.1 in January (up from 49.7).

The eurozone debt crisis continues to simmer under the surface though, as there is concern that Portugal may be the next in line for a Greek-style debt bailout. The European leaders and Greek bondholders are still in negotiations over the Greek bailout, where Greece has to write down the country’s debt by EUR100 billion. A resolution is essential, as Greece must repay EUR14.5 billion of maturing debt in March to avoid a default.

Asian markets returned from their Lunar New Year holidays and traders played some catch-up. The key data point for the week was the Chinese manufacturing activity figures coming in better-than-expected, but this did heighten concerns that the government may not need to immediately ease its monetary policy. The Chinese official Purchasing Managers Index (PMI) was reported at 50.5 in January, up from 50.3 in December (above expectations of a drop to 49.5). 50 is the level that delineates expansion and contraction. The Chinese market is approaching 2-month highs.

The Aussie market has once again found medium-term support around the 4200 level and has finished higher four of the past five weeks. The market appears to be setting up for a retest of the multi-month highs around 4350, as the upcoming reporting season may well be a trigger for this move. This week we found support around the 4200 level and we are now trading above the 13-day moving average, which sits around 4230. Many of the S&P/ASX sectors are looking to test their 150-day moving averages near term, which could give some pause as these levels have held prices in check for the past six months. The Materials, Industrials and Telecoms sectors are in uptrends, while the Financials and Energy sectors look set be testing overhead resistance. Defensive sectors such as Utilities and Consumer Staples look to be losing favour.

The next dividend season begins in February, so you can look to boost your yields through options strategies. The MDS Financial Advisory Services team can help with these trades. Call me on 1300 610 024 for further information. Investors should also be looking to utilise options strategies to protect their positions, as options are a relatively cheap form of insurance, given the falling volatility of late.

Remain attuned to the news from overseas, particularly from the eurozone, Greece and China in relation to easing policies, and the US with their earnings season. Monitor the performance of the US dollar for a guide to the future direction of commodities and equities prices.

The S&P/ASX 200 index is currently trading at 4255 and is trading above the key pivot level around the 4180. Key levels for the index next week will be 4180 and 4320, with 4230 the key pivot level.

By Michael Hevern
MDS Trading Desk

For regular Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research.

Post to Twitter

Tags: , , , , , , , ,
Posted in ASX Trading News, Stock Market Analysis | No Comments

Market Wrap: Market Melt-up Continues

Wednesday, January 25th, 2012

The Aussie market continues to melt-up, rising over 5 percent from the start of 2012, and volatility is contracting as investors appear to be comfortable with the current state of the market.

The bulls remain in control, and trading volumes have been steadily improving throughout the month. The US markets are set to have their best January since 1997, and their reporting season continues to beat expectations. Financials are having a particularly stellar run, and even home builders are joining in this bullish move and are up 50 percent in the past 3 months.

Globally investor sentiment has been boosted by successful eurozone bond auctions with borrowing costs pulling back, despite the recent S&P downgrade of eurozone nations and the EFSF bailout fund. However the views for 2012 growth from the World Bank and the IMF have been ratcheted down, with the IMF suggesting that if the eurozone does not resolve its debt issues, the global economy could be in for a “1930’s moment”.

Greece has been the focus in the eurozone this week. The European leaders and Greek bondholders are still in negotiations over the Greek bailout, where Greece has to write down the country’s debt by EUR100 billion. A resolution is essential, as Greece must repay EUR14.5 billion of maturing debt in March to avoid a default.

Commodities have had another good week with copper outperforming, up over 12%, and gold is up 7% for the year. Iron ore and energy stocks have also jumped into the New Year. Many Asian markets are closed this week for the Lunar New Year.

The Aussie market has once again found medium-term support around the 4000 level and appears to be setting up for a retest of the multi-month highs around 4350. This week we found support around the 4100 level and we are now trading above the 50 day moving average, which sits around 4150. Many of the S&P ASX sectors are looking to test their 150 day moving averages (MAs) near term, which could give some pause, as these levels have held prices in check for the past six months. The Telecoms and Utilities sectors are in sustained uptrends, while the Financials and Industrials sectors look set to break into a new uptrend.

The next dividend season begins in February, so you can look to boost your yields through options strategies. Last week we highlighted Toll Holdings for a dividend yield play and the stock is now up 10% in 5 days. The MDS Financial Advisory Services team can help with these trades. Call me on 1300 610 024 for further information. Investors should also be looking to utilise options strategies to protect their positions, as options are a relatively cheap form of insurance, given the falling volatility of late.

Remain attuned to the news from overseas, particularly from the eurozone, Greece and China in relation to easing policies, and the US with their earnings season. Monitor the performance of the US dollar for a guide to the future direction of commodities and equities prices.

The S&P/ASX 200 is melting up, with the index currently trading at 4254 and above the key pivot level around 4180. Key levels for the index next week will be 4180 and 4320, with 4230 the key pivot level.

By Michael Hevern
MDS Trading Desk

For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research.

Post to Twitter

Tags: , , , , , , ,
Posted in Stock Market Analysis | No Comments

« Older Entries