Chart of the Week

By Colin Twiggs
February 29, 2020 1:30 a.m. EDT (5:30 p.m. AEDT)

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It's not a pretty sight. The ASX 200 fell close to 10% in a single week. The severity of the fall suggests that sellers are committed and buyers are scarce. Breach of support at 6400 is highly likely and would offer a target of 5400 (a 25% draw-down). A V-shaped recovery is unlikely.

ASX 200

Our conclusion remains the same as it has been for a while:

Threats continue to outweigh opportunities and we retain a bearish view on the global and domestic economies. We maintain a high level of cash in our portfolios and our equity focus is on defensive and contra-cyclical (gold) stocks.

If there is a single dominant lesson from 1918, it's that governments need to tell the truth in a crisis...Those in authority must retain the public's trust. The way to do that is to distort nothing, to put the best face on nothing, to try to manipulate no one....

~ John M. Barry, The Great Influenza: The Epic Story of the Deadliest Plague in History (2004)

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Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.

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