Upfront Investor 07-06-13 | When One Door Closes Another Opens…

The saying ‘when one door closes another opens’ could not be more true when it comes to the market as there will always be opportunities to profit regardless of whether a financial instrument, market or stock is falling or rising. With the right knowledge, it’s relatively easy to find where to invest for the best return but unfortunately, many ‘would-be’ traders and investors get caught up in the emotions of the market leading to poor decision making. The human condition dictates that people will do whatever is necessary to avoid pain and this explains why a fear of loss is such a strong human emotion. However, the best combatant to fear is knowledge and if you educate yourself in how to safely invest in the share market then logic not emotion will allow you to see the opportunities and give you real control over your investments.

We have seen in recent weeks how fear can impact the value of the Australian dollar, which has flow on effects for our market. Around 40% of the capital in our market is held by international investors and if there is an expectation of a fall in the value of the Australian dollar this puts downward pressure on our market temporarily. However the good news is that many quality stocks are now becoming much more attractive and therefore it appears the door of opportunity is about to open for those in the know.

So what do we expect in the market?

The Australian market continued to move down this week below 4850 points and toward the lower end of my zone of support around 4750 points. This decline represents a fall of around 9.0 per cent for the All Ordinaries Index over three weeks. Now, ideally I like to see a decline occur over one to four weeks before the market turns back up, and therefore I will be looking for the market to rise from the end of next week or for the market to move sideways during trade the following week.

Given that a rise back to the 4900 and 5000 point levels will be very important in confirming the probability of a continuation of the overall upward trend on the market, I will also be watching for a retest of this zone when a rebound occurs. When this next low is confirmed it will be possible to determine the most probable scenarios as to how the market will unfold moving into the second half of 2013. In the meantime, investors need to be patient while the market makes its move and remember that falls of this degree are common.


To your profitable trading,

Dale Gillham
Chief Analyst
Wealth Within

Dale Gillham, ‘one of the country’s most respected analysts’ (Wealth Creator Magazine, Nov/Dec 2004), sought after key note speaker and author of the best selling book ‘How to Beat the Managed Funds by 20%’. Dale has assisted thousands of traders and investors to learn to trade shares and become confident and profitable in their direct share investments. Tired of an industry saturated by quick fix gimmicks and expensive short-courses, Dale co-founded Wealth Within to provide ‘ real education and ongoing personalised support’, as well as independent investment advice to traders and investors who have become disillusioned by the market for one reason or another. As testament to this, Wealth Within launched Australia’s first and only nationally accredited Diploma and Advanced Diploma of Share Trading and Investment.