The Australian AUS200
index ( ASX S&P
200 index) is fully valued at its 100% DCF
value using 3.5% growth, 8.2% discount rate. The earnings
for this index are less than at the top of 2007. Its P/E ratio
is overvalued at 18. Australia's construction industry is in rapid decline and also its housing markets. Short term interest rates are in decline as evidence of the decline in business conditions. The index is coming up against a channel line and may turn south soon. The RSI
are looking like turning down, another sign of a local top. With the US markets looking high, any change in US markets will affect AUS200
index. Look to sell short on any break downwards from here.