Aussie market huffed and puffed and delivered fourth straight negative day despite banks holding up. We have had 11 out of the last 14 days being negative. But we continue to see market showing support around the 5000 level on valuation and we have seen profit taking after the market bounces over 5% from that level for the past 4 months. The reason we are seeing profit taking at 5000+5% level is that investors are not seeing growth and once the market runs 5% over fair value the dividend yield is already price in. The market is going to remain volatile till the US Fed move is out of the way….that’s next Thursday 17th morning Sydney time. Despite recent profit taking, it still looks like we will continue to Christmas rally similar to last year…we expect the third leg in the rally to start soon after US Fed move!!! There are US consumer data out tonight and China data tomorrow, but it should not be any real road blocks in these data sets. (VIEW LINK)
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