The Market Wrap + Technical Summary 31-8-12

By Jason Fittler

 Quote of the Week - "Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away." —Antoine de Saint-Exupéry

It is funny how history repeats itself.

Back in 2007 the GFC shocked the global markets. During that time at average person on the street did not feel the impact. Only investors and self-fund retirees real felt that pain of the GFC.

Here we are 5 years later, for the investor and the self-funded retire things are starting to look up as market volatility reduces and companies have restructured.

For the average person who to date has been largely unaffected, the tough times have just started. Ask yourself how long since you have seen a major city street blocked by unions. Expect to see more of this in the coming years.

It is now time for the government to pay back their debts and this will affect us all.

While all of this is going on and focus is elsewhere the Australian Share market will start to increase. I expect this will go widely unnoticed by most, but not by Grow Your Wealth. I expect there to be plenty of opportunity to purchase quality companies cheap.

The market may have a few more small dips to come, but the foundations for a recovery have been set and I expect that the next five years will be profitable.

Technical Summary

The near-term technical picture suggests it is likely the market will move past its May-2012 high of 4448 points within the next two weeks.

However, I am keeping an eye on a number of medium term technical issues that are brewing, that suggest this rally is likely to be followed by a large pullback through late September and early October.

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