Shareswatch Australia

Almost daily the mainstream finance & business media churn out headlines regarding the stock market that would imply that stocks are either surging to new highs or falling to new lows.  The truth however is much more boring and so today I will try and have an emotion-free look at what the S&P/ASX 200 Index has been doing over the last few years & months.

As we approach the end of another year we should not be surprised by the economic turmoil in Europe, the ailing U.S. economy or the rumblings of a major slowdown in the Chinese property market. The signs that all was not well with the global economy have been raised on this humble site going back more than a year. Simply put, borrowing vast sums of money and splashing it around did not fix the global economic imbalances highlighted by the market meltdown in 2008.

So far 2011 has not been a good year for the Australian stock market despite the ASX All Ordinaries  & S&P/ASX 200 flirting with the 5000 points level earlier in the year.  Over recent months the market has fallen back into bear market territory so a review at this stage of some 52 week stock price highs & low may give us an insight into how the market is tracking.

One year ago I put together a fictional portfolio of stocks by simply using a random number generator and a list of shares that makes up the S&P/ASX 200 Index. Now 12 months later it is time to look at how these stocks have performed and see if they can tell us anything about the overall state of the Australian stock market.

The Australian stock market has finally rallied back up to where I believed the bear market bottom was last year but although this is a positive sign, the Australian economy faces a number of challenges in the years ahead and these might well make it difficult for the market to surge ahead in 2010 and beyond.

As of today the Australian stock market has rallied just over 30% since bottoming out in March and so it is looking likely that the worst is over as far as 2008-2009 stock market rout is concerned. However the market is still well below the highs of 2007 and so a full stock market recovery is still a long way off.

The Australian stock market has recovered from what appears to have been the bottom of the bear market back in March, so now seems a good time to look at some stock prices and see if they are creeping up to their 52 week highs or still near their lows.

Since the beginning of May the Australian stock market has basically moved sideways and at present there is no clear trend in place.  Eventually a trend will emerge so the question is:  will the Australian share market rally or move down over the next six months or so.

In September last year I looked at the 52 week share price highs and lows for a range of well know stocks trading on the ASX. As luck would have it, a few days later Lehman Brothers went under and stock markets around the world tumbled. But now that the dust has settled (I hope), it might be interesting to go back and look at these companies and see what has happened to their stock prices since September 2008.