That was the week that was… Your weekly market wrap (10-14 September)

By Dale Gillham. Published at Sep 18, 2018, in Market Wrap

Although the Australian market has performed solidly in recent months, there has been speculation of a market crash, which may have left you fearful, but should you be?

Is the Australian stock market about to crash?

There has been a lot of speculation of late that the US stock market is heading for another major correction or possibly a crash similar to the GFC, and many are purporting that Australia will follow suit.

All of this negativity makes investors indecisive about which direction the market is likely to head and what they should do. The question that has been raised over the past few days is whether the share market is crashing now and is it time to panic?

The simple answer is no, the market is not going to crash right now; rather the market is simply having a normal pull back. Overall, our market is currently bullish and is likely to remain so.

One thing I am absolutely certain about is, if the masses are concerned because they’ve read stories about a pending crash, then the market will not crash.

Also remember, markets do not crash at the top; instead they will generally provide many warning signs to alert you to get out, which we are not seeing right now. The most important thing you can do is not respond to fear. Have a plan to manage your risk, even when the market is bullish.

So what do we expect in the market?

The All Ordinaries Index (XAO) opened at 6,252 points on Monday before rising slightly to 6,291 points on Tuesday and on Friday morning was trading close to where it began trading for the week.

When the market rises for 15 to 22 weeks, as has recently occurred, a fall will typically follow for two to eight weeks to build sufficient support for further gains. Understand how the market moves and it won’t matter what everybody else says, what will matter is how you handle what is said. Currently, the market remains on track to achieve a new all-time high in the first half of 2019 and if you are concerned right now, it simply means you still have much to learn.

Good luck and good trading!

Dale Gillham, Chief Analyst at Wealth Within and author of Accelerate Your Wealth

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