RBA cuts rates and the ASX200 takes off, what now? The RBA cut rates yesterday to 2.25%, the lowest in history

RBA cuts rates and the ASX200 takes off, what now? The RBA cut rates yesterday to 2.25%, the lowest in history. Australian equities are simply looking for a new level of equilibrium/fairvalue as they factor in lower rates for 2015. Markets are now looking for at least one more rate cut in 2015 and with Australian 3-year bonds touching below 1.8%. Interestingly, the potential earnings ramifications of a rate cut on the financial stocks are mixed and another reason Telstra should continue to shine. However the current rally in equities has nothing to do with earnings (there a bonus), it's all about relative yield. •I am bullish the ASX200, expecting the market to trade between 5725-5925 over coming months prior to a consolidation. I still think our US friends are close to a major turn as they face rate rises, we are in a very different stage of the cycle. •With large current market moves, a 100 point pullback is likely in coming days/weeks, this pullback should be bought -Stay long high yielding quality stocks as they should continue to surprise on the upside. (VIEW LINK)