The Market Wrap 28-2-2012

By Jason Fittler

The market is struggling to move above 4300 points, which is no surprise. 

We have had a good reporting season with only a few of the poor small performers yet to report.  I feel the market is strong. 

As you can see from the below chart it is getting set to make a sustained move above 4300.

This week we have had the political issues sorted which should provide the platform for companies to start doing some long-term planning. 

The next election is late 2013 and the welcome stability in our political sector will reduce the volatility in the market for now. 

Keep in mind that companies do not care who is in power they only care about knowing the rules and knowing that the rules are not going to change short-term. 

The average investor on the other hand is about to start feeling the effects of the GFC. Credit is tight, employment is tight, house prices have fallen, government borrowing is high and cost of living is on the raise.

This will cause less people to invest over the coming years and perhaps use the surplus funds to reduce debt.

For the astute investor this will be a great time to start slowly picking up those shares, which have been oversold.