The past week
The market rose again for a fifth consecutive week, continuing the uptrend of the past 6 months.
In the month between mid-October and mid-November there was a retracement just greater than the 38.2% Fibonacci level.
The gain for the week was just 40 points, after selling resulted in the XJO easing of a high of 4658.7.
Where are we at in recovering from the global financial crisis
The nadir for our market was reached in March 2009 at 3073. Subsequent recovery stalled at 5000 (the 50% Fibonacci retracement level) but found support at 3766 in August 2011.
This year the market was spooked by a sell-off in May which re-ignited fears of a double-dip for the GFC.
However there has been a steady lift in the index since June, and a cautiously bullish sentiment persists in spite of ongoing anxieties about European and US debt levels.
The year is coming to a close just over 4600, just above the 38.2% Fibonacci level.
What is the outlook for the coming year?
With continuation of an uptrend on the daily chart, and prevailing sentiment tending to be bullish, the expectation is for further gains in 2013.
Whether this materializes will depend on whether the global debt problem can continue to be
The current low-interest environment could benefit the construction and retail sectors, both of which have been in the doldrums of late.
Should the XJO penetrate the 5000 resistance level, the next target would be at 5400, the 61.8% Fibonacci level.
This may be too great a gain to be realized in 2013. A guesstimate for next year could be 5200.
Categories: Trading opinion