Resource sector volatility continues to fall.  The measure in the chart (used in the PortfolioDirect investment report as a short term market direction...

John Robertson

PortfolioDirect

Resource sector volatility continues to fall.  The measure in the chart (used in the PortfolioDirect investment report as a short term market direction indicator) is based on movements in the small resources share price index.  As long as volatility is falling, there is usually upward pressure on prices.  As a rule of thumb, peaks in volatility indicate buy signals and troughs indicate prices will start falling.   Volatility is still falling but approaching the lower reaches of its historical range.  A sharp turn may not necessarily follow.  A prolonged period of low volatility such as occurred in the late 1990s is a strong possibility - and a key theme in our investment strategy - but this would also imply only moderate upward price pressure rather than a cyclical adjustment.


John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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