Where Did Pollyanna Go?
So what happened to all that enthusiasm exhibited on wall street last night? Why didn't people want to buy here? Are Australians smarter? Have all the hot copperites lost their money from the last dip? Nah, they're too busy buying AED, CNP, MFS, VRE and the like.
A lot of it is to do with the financial sector. It has underperformed the market quite substantially since the recent downturn, and it doesn't look like halting anytime soon. A lot of people don't seem to realise that the financial sector dominates our local bourse. I guess the assumption is that because we are in the middle of a mining boom, the index must be dominated by the resource companies.
The following is a chart of the XFJ, the main financial index. As you can see, it has broken down severely and may do so again. The next level of support is around the 4400 mark, greater than 20% away! There is some scratchy support around these levels, as well as a fib level. But, if it doesn't bounce, it could get even worse.
It was CBA that stopped the market before it even began today. Right from the open it was under pressure, and never recovered, breaking down again towards the end of the day. And it's easy to see why, the fantastic analysis done by The Fundamental Analyst portrays more bad news for the sector. It's certainly not one I want to be buying into for quite a while yet.
So what was the effect on the market? After initially popping higher, the SPI and the all ords failed to get out of the chair this morning. And causing head winds for almost everything in the market.
It will be interesting to see what lasting effects the Buffett related news has on the markets over the next few days. Even if they begin to see it as negative. Time to line up some shorts here I feel.
A lot of it is to do with the financial sector. It has underperformed the market quite substantially since the recent downturn, and it doesn't look like halting anytime soon. A lot of people don't seem to realise that the financial sector dominates our local bourse. I guess the assumption is that because we are in the middle of a mining boom, the index must be dominated by the resource companies.
The following is a chart of the XFJ, the main financial index. As you can see, it has broken down severely and may do so again. The next level of support is around the 4400 mark, greater than 20% away! There is some scratchy support around these levels, as well as a fib level. But, if it doesn't bounce, it could get even worse.
It was CBA that stopped the market before it even began today. Right from the open it was under pressure, and never recovered, breaking down again towards the end of the day. And it's easy to see why, the fantastic analysis done by The Fundamental Analyst portrays more bad news for the sector. It's certainly not one I want to be buying into for quite a while yet.
So what was the effect on the market? After initially popping higher, the SPI and the all ords failed to get out of the chair this morning. And causing head winds for almost everything in the market.
It will be interesting to see what lasting effects the Buffett related news has on the markets over the next few days. Even if they begin to see it as negative. Time to line up some shorts here I feel.
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