The ASX 200 is headed for a correction. Bearish divergence on the Trend Index warns of selling pressure. Breach of the new support level at 6350 would signal a false breakout, confirming a correction.
I have increased cash and fixed income securities to 46% of my Australian Growth portfolio for two reasons: (1) the impact of a US-China trade war on Australia; and (2) declining house prices and their potential impact on under-capitalised banks.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.