The share market has been quite challenging this year with the All Ordinaries Index down 10.08% to 31 May 2008. The worst performing index is the Mid Cap index which includes shares ranked from 51 to 100 by market capitalization which has fallen by 15.77% for the year.

In 2007 all of the indices, with the exception of the top 20 rose between 11% and 12% but the poor performance of the market this year has essentially wiped out these gains. The good news is that in the 26 years since 1982 the All Odinaries index has only ever closed lower than it open for the year on five occasions and it has never had two consecutive down years. Given this, probability suggests that the worst of the volatile market is behind us.

So what can we expect in the market?

Last week I indicated that it was possible that the market could fall this week although I didn’t expect it to fall below 5720 before rising again. However, the market did fall below this level to a low of 5620 yesterday, which could be attributed to the fact that we are in a period where shares will exhibit volatility and possible false breaks, which as you may remember I mentioned in last weeks report. While it is possible that the volatility will continue until around 19 June, my expectation is that the market will settle and return to being bullish with it likely to rise to around 6155 points by the end of June.

Dale Gillham
Chief Analyst
Wealth Within

This entry was posted on Tuesday, June 10th, 2008 at 8:33 am under Market Wrap.

Related posts:

• Share Market Wrap 30th May 2008
• Share Market Wrap 27th June 2008
• Share Market Wrap 7th March 08

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