Market Wrap - Week Ending Friday 8th Feb 08

market%20wrap%2008-0208.gifThe chart on the right is the same chart as last week’s newsletter except I have included market movements for the week just gone. The interesting fact about this chart is the market has continued to stay inside last weeks trading range.

What does this mean? For my money this is again a good indicator that we have seen the market low for now. This allows us to start investing back into the market with some confidence.

We still need to be careful as to how we invest,
but there are a number of cheap stocks and sensible strategies you can use in the current market to make money. The type of strategies we are using include selling naked puts to pick up stock at lower prices, writing covered calls and use of installment warrants as a safe way of gearing your investments. We are also buying shares which have a high free cash flow, low debt and good solid income.

This week was also a big week on the news front, interest rates up 25 bases points or 0.25%.  BHP came out with a result under expectations, made a low ball bid for RIO and RIO rejected the bid out right.

At this point I expect to see our market continue to trade sideways for a couple more weeks.

Until next week.