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Hi readers and welcome to this newsletter. I took a break after my speaking and course tour, so this is the first newsletter for a while. Thank you to all who attended, either the courses or the lectures, it's always very interesting to meet fellow traders, do some brain storming and  put faces to the names.

I have heard comments recently the market is crazy. Here is something for you to consider...this market is normal. A thought provoking brain teaser is this: What is normal? Normal is the midpoint between two extremes, pick your two extremes, then the midpoint, now you have normal. Ok, sorry, too much philosophy perhaps but hopefully you get the point. Normal or crazy is in the eye of the beholder. This was a "normal" correction, only time will tell if it is something more or less.

The other valid point to remember is the market was in a steady grinding uptrend for quite some time, when that happens market players look for a reason to sell, the market corrects, recovers, and continues on. There has been continual fear around this market since the GFC, now 6 years ago. It will probably take another 2 years or so for that fear to dissapate to a level where we get more confidence in the market, then it will be time to be fearful, because markets crash when confidence is high with many people in the market, and we dont have that..........yet.

Whats happening globally? The top 3

The US is strong

Despite concerns over "how" the Americans are creating a strong market and economy the fact is they are. Economic numbers from the US continue to impress and that is reflected in their stock market indices being very strong. The SP500 is in an incrediblly strong uptrend.

China has weakened but steady

China growth has slowed, as our miners well know. However a growth rate of 7 to 7.5% is still 3 times what most other economies can produce.Their stock market indicies look to be recovering but it is too early to call an uptrend yet.

Europe seems a basket case

I am 54 years young. The last 50 years I have regularly watched the 7pm ABC news. (it was compulsory viewing in the Castle home) Every night there is a drama in Europe or the Middle East, they will have a war or bumble their way through, I hope for the latter, but who knows. Its exactly 100 years ago they started World War 1 (in the Balkans...hmm) lets hope the idiots dont do it a 3rd time.

So as the ageing rocker (67) Meatloaf sang, "two out of three aint bad"

The Aussie market

Aren't you glad you live in Australia? (I have a few followers in China so no disrespect to them). Its been a tough month here for some traders, some would have done well trading the volatility, my guess is, most not. There has been a washout from some sectors (like the banks) as money looks elswhere for perhaps a more productive home. Lets look at a chart of the XAO.

 Perhaps too many lines for some and not enough for others! If you agree with the analagy that we have an uptrend if the price goes form the bottom left hand corner of the chart to the top right corner of the chart, then it seems as if that's the case over the last 3 years. Remembering that price is the ULTIMATE INDICATOR, however the volume support seems to be agreeing. It's been a choppy market and not easy to trade (we make it as hard as we want or not, dont we?) If the American market stays strong and China continues to steady, the Europeans bumble along ok, then this market of ours is likely to do the same. As I always say, you can't predict, but you can implement a strategy and stick to it as is humanly posible.

I have updated the website pages, click here for Peters Portfolio, now one year old and up 14%. The next newsletter I will discuss that in more detail, looking at what worked and what did not, and why.

http://www.easysharetradingsystems.com.au/peters-portfolio.html

Also click here for the 52 week high list this week, and to view more charts and comments about the XAO going back the last volatile 4 weeks

http://www.easysharetradingsystems.com.au/How-to-Trade/52-week-highs.html 

Thanks for reading

Peter

"October. This is one of the peculiarly dangerous months to speculate in stocks"

Mark Twain

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