This week has been all about the Materials sector with the market pushed higher by solid gains in this sector. BHP put on 30% during the week before profit taking towards the end of the week saw the price drop. What is not showing in the chart is that although the banks made ground this week they lagged behind the Materials sector.
The weakness in the banking sector indicates more risk to the downside for this sector and the possibility of new lows. As such next week the market will depend on the Materials sector holding up, however, nervous investors may look to take profits.
You can see that the market continue to trade in the sideways channel for now and we expect this will be the case until we receive some economic news to allow investor to be more confidant of future economic growth.
There are still plenty of good opportunities in the market you just need to be more selective. With property set to come off and interest rates historically low Shares are the best option for growth in the median term.