Positive start to quite week


Published in the Daily Telegraph, September 2009

The Australian share market is likely to open marginally higher today after a mixed lead from offshore markets ahead of a quiet week for core local economic data.

Wall Street made moderate gains on Friday on a day of consolidation and profit-taking but the Dow Jones Industrial Average still hit a fresh 11-month high of 9820.20 after climbing 36.28 points, or 0.37 per cent, on the day.

The benchmark Standard & Poor's 500 index firmed 2.81 points, or 0.26 per cent, to 1068.30, while the techladen Nasdaq composite added 6.11 points, or 0.29 per cent, to 2132.86.

The local market snapped a three day rally to close lower on Friday, with the benchmark S&P/ASX200 index down 21.7 points, or 0.46 per cent, at 4693.2. The broader All Ordinaries fell 20.3 points, or 0.43 per cent, to 4693.7.

Wealth Within chief analyst Dale Gillham said he believed the market rises would soon end.

"Many investors are now rushing into the market thinking that they are missing out on this current bull run." Mr Gillham said.

"Some are even borrowing money in an effort to make up for the losses they experienced over the past two years.

"In my opinion these investors are taking too high a risk because, as the old saying goes, The amateurs buy at the top while the professionals buy at the bottom'.

"Right now the amateurs are taking a boots-and-all approach to the market, while the professionals are being more cautious, which is evidenced by the tow volumes being traded on our market over the past few weeks."

CommSec chief economist Craig James said the local market would likely rise by between 10 and 15 points at the open today on the absence of key events driving the US and European markets on Friday.

The oil and gold price declined modestly and traders closed out of their trading positions for the end of the week, Mr James said.

But the stronger Australian dollar will be a focus for investors as they gauge the outlook for company profits, he added.


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