Share market is in whipsaws. Australian market has been consolidating at the range of 4900-5200 for around 2 months. Today, financial shares moved higher sharply. The only sector is lagging behind is material.
US dollar has been unprecedentedly strong in the last one and half months. Causing gold falling from 980 to 810, oil from 148 to 108 now, Australia dollar diving from 0.97 to 0.82.
I feel with Fannie, Freddie takeover new, commodity and energy price would be rebounding quickly as well as Australia dollar. This will end crazy period in the last 2 months in terms of commodity and FX exchange.
Today, US share market will have around 2% gain. Not sure whether this would mean a temp relieve of bear market, at least a decent rebound for a while?
What is dragging share market lower, unemployment figure, mortgage crisis, high oil price. All of them seem to have a good answer. There is no fresh bad news.
In the long term of run, I don't believe material sector will be performing well. It lacks fundamental support/urge to push commodity price higher. Demand from China will be shrinking. Real estate market in China is facing similar problem, price of real estate property is dropping.
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