Tuesday, March 27, 2007

So much for that "downward pressure"

A couple of weeks ago I posted on how the long term trends indicated we were going to see more Red days than Green days on the stock market. Well, the market has all but recovered all of these losses!

The US Dow Jones Index is still around 300 points off the high set in February, but the Aussie All Ordinaries is less than 100 points off the pace, partly pushed up by stronger metals and oil... after all, we are the world's quarry.

The rush to get money into super over the coming months may mean more green than red. Concerning, given that prices might not be reflecting fundamentals, but more simply, supply and demand. A short supply of Blue Chip stocks and a lot of money to be invested, means that prices are being pushed up not because greater profits are expected by the companies, but because there is simply nowhere else for the money to go!

The good news for investors is that there will be plenty more money going into the sharemarket than will be going out, so this climb may continue, however, I am still cautious and think there might be more volatility to come.

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