Market Commentary for October 2018

"I am sort of bullish... "

By Alan Hull

This commentary is in part or entirely created using extracts and comments from my weekly Blue Chip Report. For more information about the Blue Chip Report, including subscription details and a recent sample report, go to Blue Chip Report

Well I'm more bullish than bearish at the moment. It all really depends on which direction the U.S. Stockmarkets decide to take in October. In particular, it depends on what the NASDAQ decides to do...because right now it is at a fork in the road. And it looks like the NASDAQ is poised to take the upper channel in the following chart, but I'm waiting for a clear break from 8,000 points to be sure....

So I am sort of bullish until this question is answered, which I suspect will be very soon. The NASDAQ has to break away from 8,000...one way or the other. Once it does I will either be short selling or focusing on trading U.S. stocks. Hence I haven't even finalised what talk I'm going to give at this month's Melbourne STC meeting. To be advised...

What I am fairly certain about is that local blue chip shares are proving more hazardous than either local small to midcap stocks or U.S. stocks. And I have written about this before where I believe it is largely due to the advent of Exchange Traded Funds (ETFs) which have attracted a lot of money away from individually managed portfolios. This means investors are buying readymade portfolios or whole indexes via ETFs rather than supporting individual stocks.

In America where there is a lot more investors (and money) it isn't much of a problem but in Australia it has resulted in a lot of blue chip shares suffering sudden price collapses, in disproportion to the reason or reasons why. I think this phenomenon will change in time but for now it means I'm more interested in U.S. stocks which are offering a superior return...with less risk. And if local blue chip shares are going to behave like penny dreadfuls then I'd rather trade the penny dreadfuls.

So I'm recommending ETFs over the U.S. markets in preference to blue chip shares and I'm happy to review U.S. stocks as well as local stocks on my weekly ALANHULL TV show. And this leads me into this month's sales pitch...I will be running an ALANHULL TV seminar in Melbourne on the 10th of November. This seminar will run from 1.30pm to 5.00pm, including a break for afternoon tea.

The format will be much the same as the weekly show with an analysis of global markets, my stock picks and then your trade suggestions. If you aren't already a subscriber to ALANHULL TV then you will receive a 3 month subscription as part of your enrolment and if you are already a subscriber then you will be eligible for a very large discount.

And I will be finalising the numbers for this event in the coming fortnight so please don't delay if you wish to come along. To receive an information email, including an enrolment form, please send a request via our Contact Form