This week we saw the market make a strong rally which started on Monday and continued all week, the market topped at 6160 before coming back a little on Friday.
Is it all over? I don’t think so. I expect we’ll see some more weakness in the coming weeks and perhaps see the market retest the lows we saw last Thursday the 16/08/2007. If this does in fact happen it will provide a great opportunity to buy. We also anticipate a further fall in the resources sector which again will allow investors to get set.
This week we saw the BHP report, the results were in line with expectations with the dividend being 4c above predictions at 27c and gearing at a low of 22.5%, this is expected to be halved in the next 12 months. BHP is still positive on China and on going improvement in India.
Should you have any queries please contact your adviser on 07 4771 4577.
PS. The jury remains hung on the significance of the Thursday low. Is it a major bottom within the context of an ongoing bull market or does it represent something more sinister, an interim bottom within a bear market? Please read Daniels latest technical analysis of where he thinks the markets are going.