With the market hitting 3850 at the start of October we are now watching to see if this is indeed a higher low.
Back in August this year the market tipped 3775 forming the low for 2011, if a higher low is in then we expect to see the market move back towards 4500.
The last two weeks saw a great rally on the market with the market now sitting at 4200, the US was strong over the weekend, and if our market continues to move up over the next couple of days then we should see 4500 in the coming month.
As you can see from the below chart, towards the end of last week the market stalled around 4200. Meaning that it was consolidating for a move up or it has run out of steam. The next couple of day will give us the answer.
Keep in mind at these levels the market is still very cheap, it is not our aim to pick the bottom of the market. Our goal is to buy quality businesses which paid high dividend yields below their intrinsic value.
Even at these levels the big blue chips are great buying for the long term investor.
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