Upfront Investor | Look to the Past to Discover the Future…

Once again we are about to hear news on US monthly employment numbers, due out this Friday night. Will the news be good or bad for the US economy? According to the FED the economy is in recovery, however currently all indications are that this month’s numbers will again disappoint and show that not enough jobs are being created in the economy. But what is realistic and what does this really mean for you the investor?

If you follow global market news you will have learnt that at times the US market reacts swiftly when the employment numbers are below expectations and yet at other times this news can be a non-event. So in my opinion, if you are a medium to longer term investor this information is only useful in so far as it provides you with an indication or explanation for why markets are reacting in the short term.

To make a more informed assessment an investor requires historical data. Without this information it can be very difficult to establish the impact news such as employment numbers can produce and whether any reaction by the market is simply emotional or warranted. As with any data, whether you are looking at a company’s share price or employment data, it is critical to be able to correctly analyze the underlying trend. In 2013, US employment numbers show between 150,000 and 200,000 jobs added per month. This month the expectation is for 180,000 jobs, so anywhere between 150,000 and 200,000 would be within trend and in support of the FED’s view.

So what do we expect in the market?

This week on the market we have mostly seen a sea of red, particularly on Tuesday when the market fell by around 93 points, however, the All Ordinaries Index staged a comeback on Thursday as some investors saw opportunities to buy into stocks at lower prices ahead of reporting season and the release of ex-dividend dates. The rise was also fueled by short positions being unwound as prices had fallen to important support levels. This activity saw the market recover by around 50 per cent of what it lost in the first three days of the week.

Currently, we are watching the market closely for a reversal over the next week or two as more companies report their results. Next week some of the big names include Commonwealth Bank, Stockland, Computershare and OZ minerals. Now is a good time to prepare your dividend calendar and when the pay dates are released you simply mark them on your calendar and wait for the cash to come in.


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 adviceto 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.