Why be Market aware?

In our view becoming market aware is a vital part of your investing activity.

It may assist you in:

  • Decisions as to timing of entry and exit of positions in any market vehicle
  • Alter position sizing of the trades you take
  • Help make a decision on strategy selection
  • Indicate whether it may be beneficial to protect your investment positions

The two major forms of data are that which originates from companies and more general data relating to economic health. Both have the abilty to change sentiment and so move the price of individual shares, sectors or even the whole market.

Additionally of course, is the prevailing market sentiment often judged by the performance of the indices as a whole, and the movements in other markets such as commodities and currencies.

Although we may offer some opinion as to what we think, it is ESSENTIAL that:

a. Although we make every attempt to provide accurate information you MUST do your own due diligence relating to what you read as we do obtain our information from 3rd party sources

b. Although we have our opinions outlined here, the purpose of YOU becoming market aware is that you will be in a position to make best judgements as to the REAL implications for your investing that ONLY you can decide.

 

 

Global economic data

 

Economic data is a gauge of the financial health of both the country of the data release and the global economic market as a whole. the market sensitivity of the data (i.e. how it may effect the market) will be primarily dependent on expectations and prevailing market conditions.

Your downloadable PDF file not only gives dates and times of data release but also suggest this potential market sensitivity

 

Download this weeks PDF of major economic data releases

 

Company data

 

 

As with economic data releases of company information through relevant stock exchanges impacts on market expectations as to the value of the shares in that company going forward. The two PREDICTABLE major data points are earnings reports and dividend information.

Release of such information may influence your timing of both entry and exit. Outside of this, companies will make unexpected announcements when there is something to report.

The latter is difficult to legislate for apart from the risk management strategies that form part of your trading plan

Download this months PDF of key company releases

General weekly outlook

After a relatveliy successful earnings season in the US with over 65% beating market expectations, global and US markets will become more data responsive again to ascertain whether further highs in the US wil be obtained.

Locally in Ausralia earnings reports comtinue and several companies go ex-dividend over the coming days. As the econmic implications of the recent natural disasters become clearer, more clarity in terms of the impact on share prices may be gained.

With last weeks increase in interest rates once again in China, eyes wil be on the commodity markets all of which are near impoirtant technical points.

With the situation in eygpt looking to be moving towards resolution in the short term, whether any domino effect into other middle eastern countries will be debated and of course Europe will continue to be under the spotlight in relation to sovereign debt issues.

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The week ahead:

Weekly Key Technical Levels -

Last updated : Sunday 13th february

Major indices

With the US markets continuing to push to highs not seen since June 2008, there is little sign of this slowing down. the DOW continues to push away from the only obvious support level of 1200 there is little up above technically until around the 12700 mark.

The XJO continues to grossly underperform the US counterparts (which are now appropachign 100% retunr since the lows of March 2009) but seems to be finding some support aorund the 4800 mark with 5000 the psychologically important potential ceiling.

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Gold and Oil

After a bounce of support around the 1320 mark, the 1360 level is being eyed as the next key resistance level. The likely breakthrough this level could see further buying as gold moves back towards the highs from earlier in the year. Much may depend on the geo-political situtation in the Middle East which may be bullish should thing escalate and the performance of the US Dollar against other major currencies which are range bound at the moment. General market concensus for the long term remains bullish.

The Oil markets had a general drop as tensions came off the boil in eygpt and demand seems to be waning a little. The key support level which looks possibly threatened in the short term, appears to be around $85 with Fridays close only just finishing above that level. The resistance, although now some way off at the moment is now establishing at the $92.

As with gold many market pundits still have a bullish orientation with an expectation that oil may break the important $100 within the next 3 months

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Base metals and soft commodites

After hitting 2 year highs across the board over the last weeks the markets are watching closely as to whether these levels are sustainable. The decision to raise interest rates in China seem to have put the brakes on further moves up albeit perhaps temporarily.

Copper has some resistance that it may take an effort to break at around the $4.60 mark though looks supported over the $4.5 level at this stage. Further fiscal tightening in China may impact this obviously

In the grain markets, with the exception of corn which continues to break new levels to the upside, others notably wheat are looking rangebound with a key support level of the latter of around the 850 mark.

With soft commodities, cotton remains the out-performer closing in on an 80% rise since November. Other softs again are off there highs and are establishing a rangebound pattern.

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Vix index

The VIX index remains in a relatively low trading range suggesting general market fear of a correction is not high. A break and hold above the key level of 20 may indicate increased market nervousness and may be indicative a an immenent pull-back in prices

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Currencies

Late weekly strength is the US dollar index is now is begining to look like a reverse head and shoulders pattern with a break above the current neckline level of around 78.50 appearing potentially significant.

The USD out-performing most major currencies with the exception of the CAD.

The AUD has pulled back once again around parity and the move back below 1:1 late friday could put pressure on for a drop of up to an additional 1% early in the week. Support above $1 could push up to test 1.02 again if general market conditions remain bullish

The EUR, CHF and JPY are all sitting on key support levels and so any further drop could see further buying into the USD.