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Monthly Review – October 2019

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Our Aussie market (ASX200 Index) has held onto it’s all-time high made in July at 6875.50 tracking mostly sideways during October and trading within the range of the July-August correction – see chart below. From the end of September to the end of October, the index lost only -0.37%With a bit of global lull in any important market-moving news, we await a breakout of this range either up or down. 

On the weekly chart below, we do have a higher BOTTOM at 6396, which was an important support level from the OLD TOP of 6373.50 (red horizontal line on chart), an indication of an upward trend, which formed in the first week of October. Still, we are yet to cross the previous weekly TOP made on in the week of September 20.

The S&P/ASX200 Total Return Index (XNT) – which also factors in dividend income –  declined -0.35% in October.

Looking Into November

If we zoom out a bit to see the bigger picture, there are some time frames which suggest a possible change in the trend – either a TOP or a BOTTOM – around the week ending November 29. I suspect this will be a signal for the final rally Christmas rally for 2019, and with a little luck, we’ll be breaking into new blue sky going into 2020.

We are now nearing the end of a 12-year time cycle from the previous November 2007 peak of our market. With this long term cycle in the background, and seeing some closer time cycles lining up – i.e. 48-weeks from the December low – we’ll certainly be watching with interest around this time for signs of a change, and act accordingly.

US Markets

US equities (S&P 500 Index – SPX) continued their strong upward moves with a solid reporting season from the tech sector and other big brands. The S&P500 Index broke new record highs in October and looks set to continue through the end of 2019.

The S&P500 index rallied 2.04% in October, and has gained 29.4% since the low in December 2018. We continue to hold a large percentage of our funds in the US markets via the iShares S&P500 ETF (ASX:IVV).

As mentioned above, we’ll be watching for some signs of a change in November, being the culmination of the 12-year cycle, which has proved in the past to be very accurate.

The 2007 peak of the US markets came a month earlier than ours, in October, so it’s definately getting close now. Or, nothing noticable could happen at all, and we simply continue the main trend up. Either way, we’ll follow it because the trend is our friend.

Jeremy Gard

Jeremy Gard

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