Interested to hear what everyone's thoughts are on the last few days of positive trading in the market.
Could this be signs of recovery, or is it simply a rally following Citi's news?
Part of me thinks that this could be signs of recovery, for a couple of reasons.
A) The majority are expecting it to just be a rally, so most investors are treating it with caution.
B) No one expects a recovery to come this early, yet recoveries always come earlier then expected. If they didnt, then everyone would get in at the bottom of the market.
C) Yes unemployment is rising, however the market generally starts to recover before unemployment hits its peak.
D) Australian Business have started to streamline their businesses, much before they came desperate like in the U.S. So by taking cautionary measures, they are going to be in a better position.
E) Interest rates are likely to fall. Combine this with the fact that businesses are becoming more streamlined, there will become a point where companies appear more profitable then low bank interest.
G) Consumers have really tightened their belt in the last 12 months and with lower interest rates, they surely have to becoming more comfortable and confident in their own financial situations.
H) The outlook for the market is bleak, but this has been factored in already.
I) The chances are, that the majority of the investors who sell on a panic, have already fled the market. Any investors that have remained in the market for the past 12 months, have probably come too far to turn back, and are prepared to stick it out, so we are unlikely to see another level of high volume panic selling.
These are just my personal views, and I must admit I am not a financial adviser or scientist for that matter. I do not know the score of pie, and all I am running on is a Tafe Certificate IV in team leadership.
In saying that, I would be interested to hear people's thoughts on my views.