Still not time to buy the ASX 200

When the S&P Goldman Sachs Commodity Index (SPGSCI) registers a Weekly Oversold reading, it may provide a ‘safer’ moment to buy the ASX 200 (XJO) Equity Index

Safer, doesn’t the lowest or ‘best’.

It’s a reminder to space out the accumulation of the XJ) whilst the SPGSCI is wallowing in Oversold territory.

At the most wicked periods of declines seen in 2008 and 2020, the maximum drawdown of 20% from the first moment the SPGSCI went Oversold.

In every other occurrence, we didn’t a drawdown of more than 7% from the minute the SPGSCI trickled into Oversold territory.

While I use a number of other indicators to help finesse entry prices, I always remind myself that ‘no one deserves the bottom’.

As a side note, this study also tells me to wait for lower commodity prices which will also reflect on related equities in that sector.

Keep in mind that the phrase ‘commodities’ covers the whole basket.

There are specific commodities which are already or closer to buying levels today.

October 17, 2022

by Rob Zdravevski

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