Are we heading for new highs or re-testing?
The last couple of days have seen a strong move in our market with the ASX 200 sitting back at 4800.
Is this the start of a larger move or is the market simply retracing the recent highs. Given the momentum behind the move I expect we could see further upside in the short term, keeping in mind that there is still a lot of cash hanging around.
We need to keep an eye on the market over the coming week to see if it is moving higher, if the market moves above 5000 for many investors this will be a good time to take some profits on recent buys or look to write some covered calls over your larger holdings for the income.
Taking a longer view, I still expect the market to be volatile with swings between 4400 and 5000. As such, I am looking to buy in the top 50 on a combination of a weak price and solid income.
Income is still king and will be for at least another couple of years.