With reporting season underway the pull back of last week seems to be just that.
The big end of town looks to have locked in some gains and hedged their bets on the outcomes of the reporting season.
Keep in mind that there are still some weeks to go. But so far the results have been better than expected with the market recovering this week.
The Bears are still out there trying to scare the retail investor out of the market calling a “Correction”. Keep in mind for a correction we would need to see the market pull back 10%.
Based on the market close this week the market would need to get back to around 5000 points.
We see strong support level at 5350, 5150 and 5050 as such I would be buying into any correction and hold for long-term growth.
The key I am watching out for in this reporting season is any dividend cuts especially in the retail sector. It is not big surprise that the retail sector is doing it tough.
Roy Morgan is calling unemployment up at 12% nationwide. And with local unemployment conceding 10.5% you can expect retail sales to remain low.
Things will move back to normal.
That is when you will cash in on the retail investments.
But it may take some years.