Aussie Shares Are Going Up

The ASX Down and Global Politics

The US is ‘ready to embrace peace with all who seek it’.

These were the recent mumblings of US President Donald Trump after Iran flared ballistic missiles at two Iraqi bases that held US troops.

Fortunately, no one was injured. And now it looks like Iran is stepping down.

How’s this for a start to a new decade?

Can the DOW really move higher?

The Dow Jones is trying its dang hardest to break its all-time high even with all this war talk.

I called for volatility for the start of the year. But I wasn’t sure what we were in for.

That’s the beauty of the markets. Every single day, it’s as if you get a fresh start.

It’s also why I wrote to you yesterday. If you missed it, read this.

One thing that I’ve learned about the stock market is that the market climbs the wall of worry.

Here’s what the economics director at National Australia Bank, Tapas Strickland, said…

Assuming Iran-US tensions continue to simmer rather than boil, markets are likely to re-focus on the global growth outlook and on trade with the interim US-China trade deal expected to be signed on January 15.

The markets are always looking forward. Not backwards.

This is very different from the general perception of your average Aussie. Of course, I’m generalising.

But no doubt eyebrows would have been raised yesterday. And I bet plenty of sell orders were scheduled to hit the market this morning.

Here’s a chart that paints a picture

But take a look at the chart of the Dow Jones [DJI]. It’s right below.

Port Phillip Publishing

Source: TradingView

[Click to open in a new window]

What you’re looking at above is the weekly chart of the Dow Jones. It’s from May 2017.

Apart from the turmoil in 2018, the market seems to be in a relatively strong position.

I must kudos my friend Callum Newman here. He’s got a good grip on the markets.

He’s been suggesting you should be in stocks for possibly the last big puff of this bull market. Call it an end of cycle rally or whatever you will.

Go here to see why stocks are likely to keep rising. Martin Zweig is credited for his catchy phrase ‘Don’t Fight the Fed’.

Martin was an American stock investor. He’s dead now. But he was known for having the most expensive residence in the US at one point. It was on top of the Pierre of Firth Avenue Manhattan.

If Callum’s right about the US Fed pump-priming the market, we could be in for some pretty wild returns. That’s the outlook for the next six months, anyway.

What happens after the US election will be anyone’s guess.

Letting the market guide you

Volatility through January to March is still on the cards, though.

You could say we’ve already seen a glimpse of it.

Right now the market is shrugging off these issues. But maybe they’ll be a catalyst that brings in some selling.

Who knows…that’s the thing about the markets, you just have to take it day by day.

All I know is that I’ve got a portion of my portfolio in a mix of assets.

I prefer to take a conservative approach and let the market guide me to opportunities as they appear.

Until next time,

Jonathan Evans Signature

Jonathan Evans,
Analyst, Profit Watch

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