The Market Wrap Friday 13th November 2009

Sideways is the new trend.

By Jason Fittler

Over the past couple of weeks we have seen the market pull back to 4500 at level which I have been expecting to see for some time. We also saw a quick rebound from this level, again totally expected.

Many investors who did not get set at the March lows are using any weakness to get into the market.

Note how the market was unable to move back through the 4800 level and is once again trending down. I expect to see the market move sideways from now until Christmas as investors look for opportunities, of which there are plenty.

Any change to this pattern will be caused by one of two things:

1.    The US retail sales improvements along with US companies re-capitalising themselves.
2.    China reducing their spending - I do not expect to see this happen.

At present I am looking at the following sectors,

  • property trusts,
  • infrastructure,
  • media
  • and investments in the US.

Keep in mind that as the US retail sales start to improve this will see US companies increase in value, at the same time they will look to increase interest rates improving their dollar giving any investments in the US a fantastic return.

I think now is the time to take a look at the US.