The international equity index and the ASX
sector tables are showing plenty of red - no surprises there.
We only need look at our portfolios to know that the markets
have been heading south, the ALL-ORDS for 13 consecutive days!
AUREUS users will have witnessed the high number of long-term
Lighten signals and some Sell signals. This is an indication
of how many stocks are making new quarterly lows. Some will
continue to fall and others will be resetting for their next
run. Those that turn and rise again will provide us with
alerts to take action.
The question on everybody's minds is: "When
will it end?" Nobody can answer that question with certainty.
But I'll have a go. How about when the pain is too much to
bear that many have totally cashed up. At some stage the
market will find a bottom which will be a point of equilibrium
where sellers and buyers reach consensus on perceived
value.
Both the S&P500 and ALL-ORDS have fallen
through fairly long-term support lines and both 40 week moving
averages have turned down. Whilst false breakouts occur this
one does look a little ominous. Those that heeded the High
Market Risk signal and reduced position sizes and exposure to
the market will, although in drawdown, be beating the market.
Remain true to your processes such that when the entry signals
start occurring again ensure that you take the trades. Stock
price precedes index movement.
We have had many V-shaped High Market Risk occurrences over
the last few years. I don't think that a V-shaped bottom will
occur this time around. We might see either a slow falling
market or a sideways moving market for a few months before
positive sentiment returns. The slush-ball from left field is
a huge positive news event that fires the market into positive
sentiment.
We will need to wait for some more price
action before finding a new long-term support trend line. The
all time high reached in early October 2007 seems a long way
away now!
Local Market Report
| All-Ords |
5799.4 |
-4.21% |
HIGH |
Down |
Down |
| Info
Tech |
471.4 |
-10.07% |
HIGH |
Down |
Down |
| Cons.
Disc |
2400.1 |
-3.98% |
HIGH |
Down |
Down |
| Materials |
13546.5 |
-6.95% |
HIGH |
Down |
Down |
| Energy |
14079.4 |
-7.10% |
HIGH |
Down |
Down |
| Property
Trusts |
1806.9 |
-3.12% |
HIGH |
Down |
Down |
| Financials |
6142.9 |
-1.42% |
HIGH |
Down |
Down |
| Staples |
8056.4 |
-6.41% |
HIGH |
Down |
Down |
| Health |
9027.1 |
-3.46% |
Neutral
- HIGH |
Down |
Up |
| Telecom |
1558.4 |
-4.66% |
HIGH |
Down |
Down |
| Industrials |
5981.6 |
-1.67% |
HIGH |
Down |
Down |
| Utilities |
6184.5 |
-2.93% |
HIGH |
Down |
Down |
The Health sector is the ONLY long-term up
trend, however, there are four sectors, although falling, that
are outperforming the ALL-ORDS (as analysed in Market Master):
Health, Materials, Energy and Staples.
The most resilient parts of the market over
the last 2 to 3 months have been the mid-cap and small-cap
resources stocks.
The ALL-ORDS has breached it long-term
support line and, as at Monday 21 January (fell another 2.9%),
may not have reached its new low yet. The next few trading
days will hopefully establish where that is. the Daily SIROC
is very oversold however the weekly SIROC has just reached the
oversold zone indicating that we may have a few more weeks of
either downward or sideways movement.
Portfolio Summary
| AUREUS |
$401,202.42 |
$386,587.96 |
$374,211.76 |
-3.20% |
CFSRETAIL |
2.29% |
5 |
59.57% |
|
| SPA 1 |
$457,509.06 |
$455,471.78 |
$440,189.78 |
-3.36% |
GRAINCORP |
4.28% |
12 |
49.65% |
|
| SPA 2 |
$163,014.27 |
$159,282.78 |
$150,946.87 |
-5.23% |
PLAT-AUST |
3.78% |
7 |
42.12% |
|
Compounded Annual
Return
| AUREUS |
N/A |
N/A |
N/A |
| SPA 1 |
22.02% |
29.36% |
26.78% |
| SPA 2 |
22.23% |
14.64% |
N/A |
| All-Ords |
3.08% |
12.45% |
13.90% |
| All-Ords Accum Index |
7.97% |
17.40% |
18.81% |
Note how well the two SPA3 portfolios have
held up compared to the ALL-ORDS indices over the last 12
months. The market has obviously given back a lot of it's
gains from the last year but SPA3 portfolios, despite being in
drawdown right now, protect that profit relative to the market
by reducing position sizes and hence exposure to the market
during High Risk market periods such as we have had since the
end of June, 2007.
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 |
2 |
0 |
1 |
| SPA* |
51 |
14 |
5 |
*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.
| FUTURIS |
AUREUS |
KALGBOULD |
SPA |
| COOPERENG |
SPA |
DOWNEREDI |
SPA |
| FUTURIS |
SPA |
NAMOI-COT |
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
FCL (Futuris) is
the SPA3 'trade of the week' for this Active Investor issue.
A
WCB1+RSC(1-4) signal occurred on Friday 18/1/08 to enter
on Monday 21/1/08. FCL looks like it has completed a
nice bottoming pattern followed by a medium-term breakout.
Whilst the daily SIROC is rising the weekly SIROC (not shown)
has risen from the oversold zone.
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.
