As you can see on the below chart, last week tested the lows of January and at present it seems to be holding up. The $200 million injection of funds by the Feds in the US did help this cause a little.
The positive side of the week is two fold, we saw the Financials hit a bottom and start to rebound along with the Utilities and materials sectors. This is a positive; it’s a good indication that investors are calling the market too cheap and will buy at these prices.
I don’t rule out further down movements, but with a long term view I do feel that now is a great time to start buying into the financials and Utilities. The materials sector is still a bit volatile for my liking and I would like to see the Iron Ore contracts completed and Oil come off a little before I start buying into this sector.
I am not expecting a quick recover, a key point of any recovery is earnings. I expect the market to wait and see the end of June results before confidence comes back into the market.
Until next week.