Despite international equity markets ending
the week in the red (with Friday doing all the damage),
important support levels are still holding on the US and
European equity indices. Investors have to remain neutral and
objective to all the noise that is churned out in the media
and commentators around the world. In commentators I would
include anybody who has an opinion including the Chairman of
the Federal Reserve in the USA, your friends and myself.
You may ask yourself then why you are reading
this? Well, hopefully to get an objective interpretation from
what the charts are telling us and not for what I or you hope
they may say to suit our respective personal situations.
So what are they telling us? That 12069 and
1316 are critical points on the Dow Jones Industrial Average
(DJIA) and S&P500, respectively. Regardless of what bad
news you may read in the newspapers or hear on the radio and
TV, if these support points hold then the market's response
is: "I can handle this bad news!". On the up side, if the
market can rise through 12768 and 1396 on the DJIA and
S&P500, then we will have a new medium term up trend
developing.
In my view the most positive outcome would be
some further sideways movement to let the bad news of the last
7 months really get fully accepted and digested by the
markets. This would provide a sound platform for another
upward run in coming months.
On the other hand, if the DJIA and S&P500
fall below 11635 and 1270, respectively, then batten down the
hatches for some more turmoil in the equity markets.
On the brighter side, as I have continued to
point out in the Active Investor (AI) over the last few weeks,
commodities and metals continue to shine. The CRB Index is up
28% since mid September 2007. Over the same period the
S&P500 and ALL-ORDS are both down around 10.5%. Since the
last AI newsletter Zinc and Nickel have also joined the party
and enjoyed short-term breakouts making it a clean sweep of
strong rises in all the major metals markets.
This fact, combined with the undervalued
nature (based on trailing PE Ratios) of stocks on the ASX, it
may be just a matter of time before our market bursts forth
again. It will, however, need to break through a heavy tide of
negative sentiment. In the short-term the odds are that
negative sentiment should prevail. However,
the majority of the SPA3 signals that have occurred over the
last 2 to 3 weeks (see tables below) are across the metals and
mining stocks. Vigilant active investors will be on their toes
for such opportunities at the moment.
Click here for details of upcoming
Share Wealth Systems Discovery Sessions in Melbourne and Sydney.
Local Market Report
| All-Ords |
5674.7 |
0.54% |
HIGH |
Up |
Down |
| Info
Tech |
494.3 |
-3.08% |
HIGH |
Up |
Down |
| Cons.
Disc |
2300.2 |
-1.69% |
HIGH |
Up |
Down |
| Materials |
15358.4 |
1.29% |
LOW -
Neutral |
Up |
Down |
| Energy |
15256.5 |
2.94% |
LOW -
Neutral |
Up |
Down |
| Property
Trusts |
1708 |
-1.07% |
HIGH |
Down |
Down |
| Financials |
5200.9 |
-1.65% |
HIGH |
Down |
Down |
| Staples |
7941.4 |
1.58% |
HIGH |
Up |
Down |
| Health |
9058.7 |
1.66% |
Neutral
- HIGH |
Up |
Down |
| Telecom |
1712.7 |
2.43% |
LOW -
Neutral |
Up |
Up |
| Industrials |
5677.7 |
1.90% |
HIGH |
Up |
Down |
| Utilities |
5683.6 |
-2.44% |
HIGH |
Down |
Down |
A little more green on the tables this week
with one sector now in a long term uptrend.
Telecommunications!! Well blow me down! After years in the
doldrums and it picks a time such as now to step forward. And
the sector is Low Risk according to SPA3! This is where
objectivity is required, when all your senses are saying "Stay
away!", you've got to step up to the plate and execute. This
is obviously due to Telstra which has made a new quarterly
high and is also an open SPA3 trade.
There are some positive signs starting to
emerge for the local market however the ALL-ORDS really needs
to hold above 5577 this week and, failing that, above 5222. A
move below 5577 in the first instance will set us up for more
downside pressure, and this may well happen on Monday.
The half yearly reporting season has again
been a relatively strong one which is keeping the the PE
Ratios of companies and the ALL-ORDS very low at these prices.
This market is definitely undervalued but negative sentiment
prevails for the time being. The unknown is how long this
stand-off will occur.
Portfolio Summary
| AUREUS |
$368,454.42 |
$374,123.13 |
$375,392.28 |
0.34% |
FELIXRES |
13.71% |
5 |
79.83% |
|
| SPA 1 |
$425,295.41 |
$422,903.55 |
$424,566.14 |
0.39% |
OM-HOLD |
12.67% |
6 |
50.40% |
|
| SPA 2 |
$142,937.98 |
$141,035.16 |
$140,782.26 |
-0.18% |
CENTAMIN |
5.30% |
2 |
47.15% |
|
Compounded Annual
Return
| AUREUS |
N/A |
N/A |
N/A |
| SPA 1 |
13.77% |
28.11% |
26.85% |
| SPA 2 |
4.90% |
14.50% |
N/A |
| All-Ords |
-2.44% |
10.94% |
15.35% |
| All-Ords Accum Index |
1.27% |
15.47% |
20.15% |
The two SPA3 portfolios remain less than 50%
invested while the High Risk market continues. This has
limited drawdown significantly. The AUREUS portfolio is 80%
invested as Accumulate signals have occurred and have been
used to open new positions in the AUREUS portfolio.
SPA3 Portfolio 1 continues to outperform the
ALL-ORDS Index by a country mile. Over 7.2 years the
comparison is 22.5% compounded annual return by the SPA3
portfolio vs 8.5% by the ALL-ORDS!
Whilst SPA3 Portfolio 2's performance has
been held back by the smaller amount of capital compared to
SPA3 Portfolio1, it has still outperformed the ALL-ORDS and
hence the majority of managed funds and managed Super Funds.
In fact, 93% of them by our research.
Click here for more information on
SPA3.
All actions each day for the SPA
1 and SPA 2 portfolios are available to Share Wealth Systems members
who use Market Master through our daily download software
along with the actual public portfolio files for importing
into the SPA software.
AUREUS and SPA Buy Signals
The table below shows the number of AUREUS
and SPA Buy signals for the past three weeks.
| AUREUS |
0 |
0 |
1 |
| SPA* |
26 |
21 |
35 |
*Our scan includes
stocks that have had four zero trading days unless it is a
suspension. Before entering we ensure that the position size
calculated has at least 5 times the average daily traded
volume for that stock.
The table below shows a sample of some of the
AUREUS and SPA buys that occurred last week.
| STBARBARA |
AUREUS |
NABINCSEC |
SPA |
| PREF-CAP |
SPA |
TRANSFLD |
SPA |
| GUD50C |
SPA |
ASX-LTD |
SPA |
| DIORO-EXP |
SPA |
GRAINCORP |
SPA |
| JB-HI-FI |
SPA |
|
|
For SPA buys, a complete list is
available to SPA customers by using the 'SPA Scan' under the
'SPA' pull down menu in Market Master X-ec. For AUREUS buys, a
complete list is available to AUREUS customers in the Members
Zone by choosing 'AUREUS', 'Alerts'.
SPA Signal of the
week
MRS (Minara
Resources) is the SPA3 'trade of the week' for this Active
Investor issue.
A WCB1+RSC(1-4)
signal occurred on Friday 29/2/08 to enter on Monday 3/3/08.
SPA3 had you out of this stock since June 2007. After a large
retracement from $9.50 to $4.50 followed by a basing sideways
movement, a medium-term breakout has occurred from an oversold
position. This is a high probability entry. It is necessary to
deploy an exit strategy and appropriate risk and money
management rules with every position taken in the
market.
Click here for more information on
SPA3.
Share Wealth Systems provides more detail
on all of the above items at our eUGMS. The eUGMs are monthly
multimedia presentations available to Share Wealth Systems members
only.
