Australian Stock Market Outlook
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892 responses so far ↓
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1 Greg Atkinson // Jun 11, 2010 at 6:19 pm
Well the Australian stock market closed above 4500 today and it looks like the correction has played out much as I expected when I posted Has the stock market correction gone too far? back on the 24th May.
But I am not getting too carried away with the trade numbers out of China recently. What many people tend to forget is that exports tend to have long lead times, in other words the decision to buy products from China is often made months before the actual transfer of goods/payments takes place.
So the recent export data from China is largely based on the happy days when EU Governments thought borrowing and spending was a great thing to do, but now things are much different and I don’t expect the trade figures out of China will be quite so good for the rest of 2010.
2 Anon // Jun 12, 2010 at 4:37 pm
Hey Greg, really like this setup now. Well done -- its improving on every revision you make.
“but now things are much different and I don’t expect the trade figures out of China will be quite so good for the rest of 2010.”
And the markets have picked this up and discounted the probability of this occuring. So one would expect people will buy the fact once its widely known.
Not much to talk about here, haven’t done much (except relax)…heres something Jim Rogers mentioned that I found useful for current market conditions:
Jim Rogers Paraphrased:
If you buy in Panic and can hold through the volatility, you will generally comeout ahead.
3 Greg Atkinson // Jun 13, 2010 at 9:15 am
Thanks Anon. I ditched the previous forum set-up and decided to set up everything manually.
As for the markets, well I figure we are going to see them head up for a while now unless BP start another oil leak
4 Biker // Jun 13, 2010 at 9:54 am
“…unless BP start another oil leak…”
Wondering if, in years to come, we’ll look back at this as a Black Swan event (no pun intended here); or as a horde of little greasy cygnets cygnalling another peak oil dilemma.
The Norweigans seem to have mastered the art. Maybe BP and others need to contract the experts to totally manage all production. We all considered that at some point governments might intervene in the energy business(es); but this (and future such mishaps) make Exxon look insignificant. Getting at the stuff is going to become more expensive… and riskier. And, as it becomes more expensive, the risk of shortcuts increases.
How long before all gasoline is rationed _strictly_ for (very expensive) air flight, I wonder? Better see more of the world while it’s so cheap, I guess… .
5 Anon // Jun 13, 2010 at 2:03 pm
Speaking of BP, looks as though…after perhaps one more pull back…BP will be marching into a recovery in terms of its share price. The question now is will the recovery levels hold as more of their potential liabilities clarify.
Jim Rogers says he’s got his eyes on BP but he will only pounce when its out of the headlines. That could be awhile, given the mess they’ve got themselves in.
I did some rough guesstimates on their potential liability and i’ve got best case 30 billion…150 billion worst case. But one would expect if the shareprice makes a substantial recovery (i.e. ~$45-50) that it would still get smashed severely once the potential liability levels are known.
Looks like this stock is a trade, until it isn’t.
6 Anon // Jun 13, 2010 at 6:31 pm
I think oil might break 140$ a barrel this year (or at least rally significantly). Something just doesn’t look right and my instincts are telling me its going much higher very soon. Will Saudis finally come clean with their oil production capability/reserves? Maybe some left field event to further restrict supply?
Inflation adjusted oil prices are around the levels they were in 1979.
1946 real oil prices were at $17.81. Not much of rise given the obvious supply constraints.
Bullish Chart:
http://inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm
7 Vince L // Jun 16, 2010 at 7:28 am
Maybe the correction is over now and the market will rally back up to 5000?
8 Anon // Jun 16, 2010 at 12:20 pm
Vince who knows? Still pretty bearish out there. Lots of people comming out of the woodwork with their double dip thesis.
Looks like EUR/USD is finally making a big move! Could be a very sharp rebound in progress here.
9 Greg Atkinson // Jun 23, 2010 at 5:52 pm
Well the rally across the major markets seems to have come to a screeching halt. Still I expect the Australian stock market to get a boost when the Resources Super Profits Tax (RSPT) is either buried or heavily modified.
I still reckon we could see the ASX All Ords at 5500 around September.
10 Anon // Jun 23, 2010 at 9:08 pm
Well if Julia gets in the RSPT is gone. Go Julia -- i’ll vote for her…she is better than Abbott.
11 Biker // Jun 23, 2010 at 10:52 pm
I think your comments are on the money, Anon. The only way Labor can extricate itself from the current impasse is if they ditch Rudd.
And the All Ords will rise, as Greg predicts, if the RSPT goes.
A lot hangs in the balance, as we sleep… .
NB: Maybe Henry didn’t need to go, Greg(!) (?) (!)
12 Anon // Jun 24, 2010 at 8:19 am
I kinda feel sorry for Rudd…the more I look at it, the more this possibly looks like it was planned from a very longtime ago (just waiting for an opportune moment to pounce). How cold and backstabbing is politics -- you need a tough skin.
I hope Julia can resurrect labour once she gets in. She looks like a leader we can be proud of!
13 Biker // Jun 24, 2010 at 11:21 am
Well, the perception of a Gang of Four, making most of the decisions, without any consultation, was probably clever media spin which worked against Rudd, politically… .
The RSPT was so badly conceived and managed that it reinforces perceptions that Rudd a.) did not consult widely, either within Labor or with all the stakeholders; b.) withheld the Henry report, until even Labor supporters believed it was hidden; c.) put Henry in an absolutely untenable position. Rudd’s over-the-top micro-management only seems logical and appropriate when you consider that everything he delegated went up in flames… .
So Rudd may be perceived as both hero and fool, often by the same people.
But Abbott is a _prize_ fool. The legal issue regarding non-declaration of his housing loan is _nothing_. The sheer financial stupidity of borrowing that kind of sum against your home equity is laughable. He’s doing just what the Brits and Yanks did! It also clarifies the policy differences between Abbott and Hockey, back on April Fools’ Day:
http://www.theage.com.au/national/hockey-contradicts-abbott-on-property-20100331-revk.html
14 Anon // Jun 30, 2010 at 1:11 am
Buying some stocks here and unwinding some portfolio puts.
This is looking like panic selling to me but I could be wrong so i’ll keep somemore portfolio insurance/puts on just in case.
Haven’t been doing a whole lot lately but might step in buy more and get active if we keep falling.
Just waiting for the end of the world pundits to comeout of the woodwork and i’ll buy big
One thing is clear is this rebound will not be like the one we experienced in March/April. Will likely be a slow and grindy type of rise.
*All posts by this poster is not financial advice.
15 Anon // Jul 1, 2010 at 5:33 pm
8 red down candles in a row. My technical models are screaming a bottom now.
The last time we had 8 candles like this on the XAO was March 03 just before the 5 year bull-run. Not to say that would happen again -- it would be unlikely -- but my bet is a slow developing rally over several months into December.
*All posts by this poster is not financial advice.
16 Greg Atkinson // Jul 1, 2010 at 5:45 pm
It’s crazy out there Anon
But what can you expect, end of FY madness meets rumours about China. I reckon it will all come out in the wash and there is another rally in the old market. But 5000 looks a long way off and of course 5500 looks like it will be a stretch to hit this year.
I wonder how much money the housing market is drawing out of the stock market?
17 Anon // Jul 1, 2010 at 6:03 pm
In terms of 2011 targets…i think we will break the recent lows not this year…but next year based on historical price movements/observations.
Maybe about ~3,900 on the XAO in 2011. Lets see if this call works out (which is unlikely).
So essentially the levels we are at now are about ~5-7% from where we may be after a possible crash next year (~25%).
Doesn’t look too risky to me when you factor in dividends.
Although holding through a bear market post crash and bull market post correction are completely different beasts (i.e. stocks become timebombs (constant downgrades) even in basing periods, post bear market crashes). I wouldn’t touch stocks with a ten foot pole if I had strong convictions we were in a post crash bear market.
So I guess the key this year may be to avoid companies that have downgrades (theres usually more than one but not always) and stock picking not sector/secular bias. There was a recent study done suggesting there were ususually low levels of stock pickers in the market, which is a bullish sign for this method going forwards.
*All posts by this poster is not financial advice.
18 Anon // Jul 1, 2010 at 6:23 pm
“It’s crazy out there Anon But what can you expect, end of FY madness meets rumours about China”
Isn’t it funny how all these things that can go wrong do at big turning points in the market. At the top of the market we had everyone bullish and all the stars lining up (China, economic recovery etc) and at the bottom almost everyone is bearish and the doomers are all calling for another crash.
“I wonder how much money the housing market is drawing out of the stock market?”
Must be loads. I hope the people who are getting in now can survive a possibly big drawdown in equity and unpredictable shocks. I wish them well and hope they can make good returns.
*All posts by this poster is not financial advice.
19 Anon // Jul 1, 2010 at 6:25 pm
Bearish Sentiment near 52 week high:
“Given the recent market weakness, it’s not surprising that bearish sentiment among newsletter writers is near a 52-week high. According to the weekly survey from Investors Intelligence, bearish sentiment rose to 33.3% in the latest week which is the highest level since July 2009. Although bearish sentiment is on the increase, a plurality of advisors still consider themselves bullish (41.1%).”
http://www.businessinsider.com/pundit-bearishness-has-hit-an-extreme-2010-6
20 Anon // Jul 1, 2010 at 7:54 pm
The EUR/USD is rising again. Still feel a big up move is comming. My technical models say it and my gut feels it
But its abit like a heart monitor the way its oscillating atm..lots of noise.
Although, prepared for the fact it could break to new lows before starting this uptrend, in order to flush out weak hands.
The Euros rise could be a leading indicator for equities near term direction?
*All posts by this poster is not financial advice.
21 Anon // Jul 1, 2010 at 8:05 pm
“Jim Rogers says he’s got his eyes on BP but he will only pounce when its out of the headlines. That could be awhile, given the mess they’ve got themselves in.
I did some rough guesstimates on their potential liability and i’ve got best case 30 billion…150 billion worst case. But one would expect if the shareprice makes a substantial recovery (i.e. ~$45-50) that it would still get smashed severely once the potential liability levels are known.”
Looks like Jimmy was correct…should have waited until all the media hype died down before going in! Have been smacked to the wall on this one. My protective puts have saved me but still down 10-15% even with the puts. I was right about one more pullback before the upmove…but 26-27$! was not where I thought we would go! Its 3% of my portfolio and 3% too much!!
Still think 45$ is possible but probably be very bumpy and volatile en route..especially in August where the relief well is supposed to be completed. I’ll stay out of stuff like this in the future and wait for the dust to settle instead of trying to be a hero and ride the rapids. Historically theres plenty of time to get on stocks with situations like this and this was an error on timing.
*All posts by this poster is not financial advice.
22 Biker // Jul 1, 2010 at 8:39 pm
“I wonder how much money the housing market is drawing out of the stock market?”
It’s hard to know. I was sceptical about claims that overseas investors were buying Melbourne and Sydney with both hands, but it appears that they _were_ boosting both markets.
A realtor just rang me two days running, trying to list anything and everything we had. I gently reminded him that he had a reputation for working for buyers, rather than sellers. His response surprised me. He had just sold a home I knew well, for around $100K more than I thought it worth.
Land is still on the move, with prospective buyers camping out in cold wet weather to bid for blocks well north of Perth. Some of them already have properties, according to the papers; but I’d never heard of anyone but FHBs doing that before… .
Despite all this, I sense that money _isn’t_ moving a lot here. Confidence may have plateaued, perhaps because of the RSPT, perhaps due to the reining-in of immigration, perhaps due to interest rates. Land is in short supply, despite WA’s Housing Minister’s claims that he’ll create the lowest medians in Australia. Construction appears to be slowing… and on weekends there are fewer ‘lookers’ in display homes than we’ve seen in years. We must have seemed the most likely to build, to one agent… because she has emailed us _daily_ with plans, offers, etc.
So if money is flowing from shares into realty, it must be pretty low-key. I think people just have their hands in their pockets, at the moment. We do, too… .
23 Anon // Jul 1, 2010 at 8:41 pm
Alot of wide range sideways action (as Greg alluded to aswell) likely for the next few months with a big rally possible in Oct-Dec:
“Stocks this year have followed a Cycle Composite, which blends the historical presidential and 10-year cycles, plus annual seasonal tendencies.Will the pattern hold?”
http://barrons.wsj.net/public/resources/images/BA-AT138_Street_NS_20100611194533.gif
“ALMOST NO YEAR IS “TYPICAL.” But the Ned Davis Research chart here of the 2010 Cycle Composite shows that this year has been pretty close. The composite equally blends the past behavior in the second year of a presidential term, years ending in zero and the annual seasonal pattern. And we had just started to believe the news mattered.”
*All posts by this poster is not financial advice.
24 Ned S // Jul 1, 2010 at 8:55 pm
Was curious how you were making out with BP Anon.
“how much money the housing market is drawing out of the stock market” -- Not a lot perhaps? But that could change if house prices do correct a bit.
Julia -- She’s ALP -- I’ve had enough of them for life now.
Tony and his $710k housing ATM withdrawal -- Yeh, I would have hoped he was old enough to know better.
25 Anon // Jul 1, 2010 at 9:06 pm
Ned yeah BP is abit of a disaster…but my portfolio only really moves if WMT, SNY, PFE and Citigroup moves as it makes up most of my portfolio…i’ve taken clear stock bets on these this year…so lets pray they dont go like BP. But I’ve structured things so that if one of those 4 goes off the cliff seriously I will be up in both directions (I bght alot more OTM puts than stock held). So I actually make more if we crash than if we rise…but I dont make anything if the fall is only like 5-10% on the stock as my puts dont kick in.
Mistakes are all part of this game and i’m prepared to make them aslong as I dont make them again.
I’m up 10% on Citigroup up 5% on SNY down 3% on PFE and down 5% on WMT. So my entire portfolio is up alittle even though weve fallen 7?%. I was up more when we were alot higher and have been in drawdown obviously.
But if you dont have drawdowns you cant make money…the two need to happen eventually.
*All posts by this poster is not financial advice.
26 Anon // Jul 1, 2010 at 9:18 pm
But yeah I guess i’m abit too critical…I was up 25% in May and down 5% in June. So I shouldn’t be beating myself up too much.
I just hope i’m not down another 10% in July as all my effort May would evapourate!!
*All posts by this poster is not financial advice.
27 Ned S // Jul 1, 2010 at 9:45 pm
Only stuff I ever had a go at trading was a bit of bullion. And despite the fact it was in a bull run about the best I could manage was to break even!
28 Anon // Jul 1, 2010 at 9:57 pm
I guess I can feel your pain re: Gold Ned.
I got burnt when I tried to enter gold…its too volatile for me. I’m thinking of buying long dated calls for silver, but I am hesitant because me and precious metals dont seem to do well together. I dont make money buying these things.
My track record buying commodity stocks is poor aswell…. BP just added to the dismal record. I guess thats why I didn’t put much in it … and if you look at my previous posts I kinda knew what was going to happen re: BP but still remained bullish! -- absolutely idiotic and deserved to lose.
Like you said awhile back Ned, we have to stick to our circle of competence and not try to do things we are hopeless at!
Better to do nothing than do something we will lose money on
*All posts by this poster is not financial advice.
29 Anon // Jul 1, 2010 at 11:15 pm
DJIA down again…we are now more than 14% below 2010 highs.
9600 might be the floor if we get there…@ 15%.
Still cant see decent reasons for stocks to be this cheap…alot of stocks are trading at or below 08 GFC levels which doesn’t make sense since some of these stocks have increased earnings since then! The yields on some stocks with good/stable FCF and low debt is mind boggling.
Logic is now totally out the window and the bears are in control until they arn’t.
Not sure whether to buy more yet…will sit on my hands as I’ve got alot of longs already.
*All posts by this poster is not financial advice.
30 Anon // Jul 1, 2010 at 11:27 pm
EUR/USD continues to rally…1.24+ now…looks like equities will rebound soon if this is a leading indicator.
*All posts by this poster is not financial advice.
31 Anon // Jul 1, 2010 at 11:32 pm
EUR/USD breakout looks massive…targeting 1.40 possibly.
*All posts by this poster is not financial advice.
32 Anon // Jul 1, 2010 at 11:44 pm
trading bots are triggering and buying now…EUR/USD is off
Stock market is still sick…shocking.
*All posts by this poster is not financial advice.
33 Anon // Jul 2, 2010 at 1:58 am
DJIA has bottomed out here after testing the 9,600 area (huge support).
Upwards from here i rkn. I’m taking off more portfolio insurance…actually i’m taking off alot.
*All posts by this poster is not financial advice
34 Anon // Jul 2, 2010 at 2:13 am
Buying some stocks here.
*All posts by this poster is not financial advice
35 Ned S // Jul 2, 2010 at 8:05 am
I’m just glad I was asleep while it all happened!
36 Anon // Jul 2, 2010 at 9:46 am
Ned you missed an action packed night
.
Well i’m half dead now so happy to leave my portfolio again for a few months or till EOY. Lets hope I dont have to bloody come in again and nurse the thing.
Sold 98% of my portfolio puts so my portfolio is pretty uninsured now. Lets pray for a sustained upmove so I can re-buy insurance at much lower prices
.
Sleep time!!
*All posts by this poster is not financial advice
37 Greg Atkinson // Jul 2, 2010 at 11:03 am
At times like these I focus on doing my portfolio paperwork and not watch stock prices too much. It helps me relax and not get sucked into the mood of the day
38 Anon // Jul 2, 2010 at 11:51 am
Its very tiring when you get sucked into the mood of the day I must admit.
Getting to the stage where its abit pointless reading anything on the financial sites as most of it is wrong or sensationalistic. e.g. end of the world, double dip, scare moungering.
Just check technicals a few times a week, occasionally fundamentals and sentiment indicators and thats about all you need I rkn. Keep it simple and infrequent.
*All posts by this poster is not financial advice
39 Anon // Jul 3, 2010 at 3:19 am
DJIA down again ! ouch!
Looks like we might have abit of a slow bottoming process…not the normal spike back…which I guess is better for a sustainable rally.
Pundits are now going on about the “death cross” indicating a sell signal and proceeding bear market. The death cross is where the 50dma intersects the 200dma.
I’ve looked back for about 30ish years (on the XAO) and noticed that this signals further lows ~50% of the time…so the other ~50% has actually signalled a market bottom or close to it.
Given valuations, sentiment and the fact we are trading at recessionary levels when theres no recession, i’m betting on an intermediate bottom.
Portfolio insurance is abnormally high, volatility has sky rocketed, bears are everywhere…retail investors are trying to short. Lots of warning signs here! I’ve never seen so many obvious signals to go long before? But perhaps I am wrong and the market is right.
*All posts by this poster is not financial advice
40 Ned S // Jul 3, 2010 at 3:30 am
A thought to bounce around while you’re watching the remainder of the session maybe Anon? :
http://articles.moneycentral.msn.com/Investing/JubaksJournal/which-ways-will-world-markets-go.aspx
41 Anon // Jul 3, 2010 at 4:16 am
Hey Ned…you’re still up
.
There could be a divergence in terms of performance between developed and developing markets. Didn’t think about this possibility.
I guess my rationale for investing in the US is mainly my concern for the AUD. Reserve currency is a much safer area for now anyways (albeit i’m sure this will change in time).
Also there appears to be better value in the US atm in terms of growth prospects and large cap cigar butts
I wish this rally would hurry up and start…its a pain staking bottoming process !
*All posts by this poster is not financial advice
42 Ned S // Jul 3, 2010 at 4:23 am
Not looking quite as scarey as it did two hours ago though! Yeh, I can see your logic with avoiding the AUD.
43 Anon // Jul 3, 2010 at 4:36 am
DJIA is at the bottom extreme of the bollinger bands. Lets see it bounce!
Volume not materially and consecutively below the DMA.
This bearish volume trigger was firing at ~11,000 and ~10,600, altho becomes abit useless at the bottom of a correction.
No doubt when we come out of this it we may have periods of declining volume which will then become a bullish indicator. I’ve noticed alot of people use declining volume out of corrections as a bearish indicator…but its not relevant for the first several months out of a correction i’ve found (not including bear markets of course).
*All posts by this poster is not financial advice
44 Anon // Jul 3, 2010 at 4:39 am
End the day up Ned?
Looks like funds are buying heavily everytime we get near 9,600.
*All posts by this poster is not financial advice
45 Anon // Jul 3, 2010 at 4:53 am
My Teacher: Charlie Munger
http://blog.enochko.com/2010/06/my-teacher-charlie-munger-english.html
*All posts by this poster is not financial advice
46 Ned S // Jul 3, 2010 at 5:13 am
“End the day up Ned?” -- Was line ball there until right at the end. And definitely could have been way worse. The occasional mega bear has started screaming for the end of the world again I see -- SP500 sub 500 etc. Must admit I’ll be very happy to see them disappointed!
47 Anon // Jul 3, 2010 at 6:32 am
lol Ned, its the samething every bottom unfortunately! It gets abit tiring listening to it.
Price Action looks like big buying is occuring so that is what it is. This has happened last 2 days.
I’m seeing alot of traders net shorts atm, trying to stay with the trend…almost analogous to what was happening with the EURO shorts crowded trade. Might not be pretty when the shorts get squeezed.
*All posts by this poster is not financial advice
48 Greg Atkinson // Jul 3, 2010 at 8:40 am
It is going to be interesting how Australia stocks hold up if commodities prices soften. Personally I think the mining stocks are already trading at a level where a fall in commodities prices is factored in. They are certainly not trading at “mining boom” levels.
But I don’t expect the ASX All Ords/ASX to fall much further. In fact I reckon it is oversold again. But I do wish the BDI would pick up again!
49 Ned S // Jul 3, 2010 at 11:40 am
I saw your tweet on the BDI Greg. And then went and read that the shippers are all bullish and building more. Followed by a comment that the shippers have been known to be abysmally wrong in the past.
Yep, there were motivated buyers at djia 9,620 alright Anon. I guess I don’t like the fact that 9,800 didn’t hold though?
The thought crossed my mind a good while back that everyone could save themselves a lot of effort and angst if the markets were only open between 10:00 and 10:15 AM and 3:45 and 4:00 PM. Maybe it’s just that the Wall Street types need something to fill in their day while the kids are at school?
50 Anon // Jul 3, 2010 at 11:44 am
So do I…BDI looks sick as a dog…hopefully we’ll see a pickup soon.
Just re-looking at the XAO charts…and entertaining the thought of a further flash down to take out the weak hands. Perhaps a possibility to around ~4110ish in a worst case scenario. But if it got there i’d think this level wouldn’t last very long. And to play for the last 2% or so seems abit silly when theres 20%+ possible upside?
If we break 4,000 this is not good and it means we are in a bear market (>20% falls). If that happened i’d need to reassess everything and would probably sell on the counter-trend relief rally (10-15%). But I really cant see a bear market situation here, so thats all i’ll say on that
*All posts by this poster is not financial advice
51 Anon // Jul 3, 2010 at 11:53 am
Yeah ~9,800 broke…looks like 9,640 has to hold at closing not intraday, or else another flash drop might occur.
We really dont want to keep going down like this or else we start getting towards bear market type situation.
52 Greg Atkinson // Jul 3, 2010 at 2:16 pm
Regarding the BDI there are a few things at play. Firstly a lot of ships are being delivered but this is largely because of orders placed before the GFC..especially for the big ships. On the other hand a large number of ships are being scrapped and many are laid-up.
So from what I can tell the overall effect is that a lot of capacity is being taken out of the system and yet, the BDI remains weak.
So I am very focused on watching the BDI at the moment and if it doesn’t pick up soon I reckon the Australian economy might be in for a tough second half.
But I reckon a lot of bad news is already priced into stocks so I am not expecting any dramatic moves below 4000 for the ASX 200/ASX All Ords.
53 Anon // Jul 4, 2010 at 12:08 am
Geez my last two posts are becoming bearish…i’m letting the crowd get to me!
Regarding the BDI agree with Greg…its shocking but stocks and resources…and in some cases ship related listed companies are reflecting this fact (and I would argue its now excessively priced in). Also the BDI is wildy volatile so I wouldn’t be surprised that we get a huge rally back up in the next few months. Look at the BDI ~Sept 09 correction and rebound.
Theres clearly going to be a disconnect here between what the economy and stocks will do. Even if we have a slowdown in growth its unlikely to be a recession. And historically its normal to have these slowdowns comming out of deep recessions etc. Again, how is it possible to have recessionary level stock prices yet no recession? Looks like everyone is preparing for the end of the world again and I think its mainly an over reaction due to the many burnt wounds from the horrible GFC.
But we’ve got to start seeing stocks move higher on bad news…that will be a key turning point, in regards to a bottom. Usually at bottoms, you get bad news after bad and the market reacts less and less, until it begins to rise on the bad news. Similarly the opposite occurs at a market top…good news after good but the market doesn’t move.
*All posts by this poster is not financial advice
54 Anon // Jul 5, 2010 at 10:08 am
Am I going crazy or does Telstra look like its about to rocket?
The charts look interesting…who would have thought this decade long dog would move?
I guess you cant get more bearish on it than now?
Almost everyone hates it…the recent government deal superficially looks good re BBN but need to look at it more. Yield is at ~9% and with the deal looks like they should be able to maintain the divvie.
Interesting!
55 Anon // Jul 5, 2010 at 8:15 pm
Well XAO down? Wonder what the DJIA will do tonight?
*All posts by this poster is not financial advice or a reccomendation to do something.
Diclosure: Poster may own positions in some of the ideas discussed in some/all posts.
56 Greg Atkinson // Jul 6, 2010 at 9:29 am
Well the rumblings of a property bubble in China are growing louder and more analysts/economists seem to be suggesting that the Chinese economy is going to slow down. But by how much? Even it is grows at ‘only” 9% that is still fantastic, but maybe Australia has become hooked on double digit growth in China?
You know I reckon Rio Tinto and BHP sense prices for iron ore and coal are going to fall and that is why they have agreed to the revised terms of the mining tax.
A budget surplus in 2013?…I don’t think so.
57 Anon // Jul 6, 2010 at 9:30 am
This is like groundhog day..waste of time even bothering to look
Telstra is bucking the trend
*All posts by this poster is not financial advice or a reccomendation to do something.
Diclosure: Poster may own positions in some of the ideas discussed in some/all posts.
58 Anon // Jul 6, 2010 at 9:44 am
“A budget surplus in 2013?…I don’t think so.”
Yeah I didn’t buy that either lol.
Can’t be worse than Rudd…at least she got the deal done.
59 Ned S // Jul 6, 2010 at 10:25 am
“Can’t be worse than Rudd…at least she got the deal done” -- Yeh, definitely better than leaving it in abeyance because one was freaked out by the thought of doing another obvious backflip anytime soon. But no system to it -- No thought behind it -- Just a matter of how do I save a bit of face and maybe extract a bit more tax revenue from the system. More ad hoc patchy bandaid sort of stuff from a mob that has no idea what it is doing or how to do anything.
60 Ned S // Jul 6, 2010 at 3:55 pm
Jeez, what happened -- Did China announce it’s going to indulge in QE or some such?
61 Greg Atkinson // Jul 6, 2010 at 4:58 pm
The balance of trade numbers made people happy, but I am guessing a lot of this has to do with the AUD getting weaker. I am not sure if I should be pleased or if this is the last gasp of the commodities boom for a while.
62 Ned S // Jul 6, 2010 at 6:45 pm
Thanks Greg. And I see our intrepid inflation fighting mates at the RBA didn’t feel to give me a pay rise on my cash holdings this month!
63 Anon // Jul 6, 2010 at 7:23 pm
Well i’d say this looks like a bottom candle…but then i’ve been saying that for the last week and i’m starting to look stupid.
So I will remain cautiously optimistic
Could be a big short squeeze here.
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64 Ned S // Jul 6, 2010 at 7:48 pm
I reckoned Oz house prices have been a bit high for the last 5 years Anon. (Not that it stopped me buying two of them.) So if you call a stock market turn within a week, I’ll be extremely impressed!
65 Anon // Jul 6, 2010 at 8:08 pm
Thanks Ned.
Hopefully the states will have a nice rally tonight. Futures appear to be kicking along
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66 Ned S // Jul 6, 2010 at 9:21 pm
It’s a funny one Anon -- Krugman is talking about the start of the “third depression” -- He’s a bit worried about stimulus being withdrawn I gather. While Roubini is saying, Nah the US won’t see a double dip -- But it’s gunna be tough going. It probably is about time for the market to turn around and give all the bears a fright though?
67 Anon // Jul 6, 2010 at 11:21 pm
Yep, let the bullrun begin
.
Yeah Roubini sounds closer to the mark, but the markets are pricing in a recession, not a slowing in the economy…so stocks should do ok this year.
Krugman sounds abit extreme so thats all i’ll say on Krug. And most depressionists comeout at market bottoms.
“Despite talk of meltdowns, it’s important to point out that corrections are common. Going back to 1928, the S&P 500 has suffered 93 corrections, says Ned Davis Research. They typically occur every 234 trading days, on average, or every 12 months.”
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68 Anon // Jul 6, 2010 at 11:45 pm
Thought this was brilliant in terms of listening to others. I’ve been trying to do this for awhile but its very difficult to do.
“We generate ideas from a global macro prejudice and then filter them through a global macro prism. Let me give you an example. I read research by people such as Marc Faber. Marc is wonderful, but I have to read him through the prism of sheet music. Charts are my sheet music; Faber is my Mozart. However, by putting his thoughts and prejudices through a different medium I can raise or lower the volume of Marc and the others. Right now I’ve got the volume on Marc and people like James Grant turned low; not because I disrespect them but because they are currently in conflict with my disciplines, my sheet music, and with my understanding of how to make money.”
From Drobny -- Invisible Hands.
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69 Anon // Jul 6, 2010 at 11:58 pm
EUR/USD continues to run. Now the key will be not to sell too bloody early, which is a mistake I am continuously doing. If I even sell 1% before 1.33 someone shoot me.
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70 Anon // Jul 7, 2010 at 12:46 am
Bullish signs for the EURO:
Euro’s Worst to Come, Top Analysts Say
http://www.bloomberg.com/news/2010-07-05/euro-worst-to-come-for-most-accurate-analysts-as-td-securities-sees-parity.html
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71 Anon // Jul 7, 2010 at 3:21 am
djia gains out the window…how volatile is this bottom. Almost as bad as the BP one.
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72 Ned S // Jul 7, 2010 at 4:01 am
Yeh, they’re tricky little devils those Yanks. I wouldn’t have any idea what they are going to get up to in the last hour.
I guess I’m just a bit negative on the Western world situation generally. I figure I’ve maybe got 30 more years to live. And within that timeframe I don’t especially see the changing world demographics as being a plus. And I’ve got this nasty thought in my head that as George Bush’s “a rising tide raises all boats” theory hasn’t necessarily worked out well in practice, the West could be in for a rather disappointing time as it learns to compete with Asia. Their expectations are lower. And they just haven’t got all our ideas about what they figure they should have the right to vote themselves as entitlements under their governments perhaps?
But trading is a totally different matter if one can make a buck from it. Apart from that, one is down to relying on inflation I guess.
73 Ned S // Jul 7, 2010 at 5:04 am
Looked like a win to me!
With the best bit being it never really got close to 9,620 maybe?
74 Anon // Jul 7, 2010 at 5:59 am
Yeah looks good, but we can never be certain in this game. Am constantly belted to the floor everytime I get a hint of overconfidence.
75 Anon // Jul 7, 2010 at 6:26 am
What are your thoughts on China Ned?
I’m looking at some stuff…entertaining some ideas.
It appears to me China is a leveraged play on the US economy and Australia is a leveraged play on China. So this decoupling thing has me confused?
If US saves more…which seems to be already occuring…then China is in trouble, followed by Australia.
If you overlay the MSCI Asia chart with a chart from 2000 of US debt to gdp theres a big correlation.
“By doubling up on yet more productive capacity and yet more office buildings and yet more fast trains and the like, [China] have financially exposed themselves. For the first time in two decades they are very vulnerable. If I am right and Western economies enjoy subdued economic growth at best, then all of us will be swimming in deflation. The price of Chinese and indeed all internationally traded goods like steel will need to come down to a level where, despite our misgivings and our collective desire to run down debt, their stuff is just so incredibly cheap that we would definitely consume more.”
*Anonymous Hedgefund manager Invisible Hands.
Happy to hear the other side of the coin of course…i’m guessing theres lots of differing views here.
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76 Anon // Jul 7, 2010 at 6:39 am
Seems like the market is confused re: deflation or inflation…and to be honest…I am aswell!
77 Anon // Jul 7, 2010 at 9:23 am
Well bght somemore high dividend yielding stocks again. Beats the bank and wouldn’t be surprised if the RBA is on hold for awhile -- only encouraging more people to go after yield
Wonder how long 10% yields can last?
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78 Ned S // Jul 7, 2010 at 6:09 pm
My thoughts on China (or more generally Asia) -- It would just seem incredible to me if the region can’t out compete the West Anon. Leastways in a world that remains ‘coupled’. And I can’t exactly see Americans (as the archetypal western consumer) being in any hurry to go back to producing their own levis in sweatshops for 10 bucks a day -- So the incentive to decouple is not strong. But that still begs the question of what the heck is the west going to do for a living.
The Americans have been able to borrow money -- They’ll ‘die in a ditch’ before they willingly see the USD lose global reserve currency status I imagine? As for the others, they seem to have decided austerity is worth a shot. But the Chinese presumably aren’t too silly -- They got through the Asian Financial Crisis OK. I’d love to know what’s going through their minds as they play around with their currency peg and decide whose bonds to buy.
79 Ned S // Jul 7, 2010 at 7:33 pm
“deflation or inflation” -- This bloke gives a reasonable assessment on it here Anon:
http://www.nakedcapitalism.com/2010/06/satyajit-das-nowhere-to-run-nowhere-to-hide.html
With the extra thing to bear in mind maybe being that if the patsies catch on that inflation is a happening thing, then its value to governments is significantly reduced.
80 Anon // Jul 7, 2010 at 11:33 pm
Thanks for the article Ned, looks good…i’ll take a read of it over the next couple of days as it looks like something I need to seriously absorb.
Looks like the states is moving again…wonder what the Advance/decline reading is?
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81 Anon // Jul 8, 2010 at 1:32 am
Dumping BP here…close to breakeven so wont push my luck and get out of something that was clearly a mistake. May go higher but other things I can get even better returns on now with much less risk.
Will look at it again when its out of the headlines and the full extent of liability is known.
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82 Anon // Jul 8, 2010 at 1:41 am
Buying BDX…looks interesting.
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83 Anon // Jul 8, 2010 at 1:54 am
Eyeing the Cable (GBP) but unsure about entry hmm.
84 Ned S // Jul 8, 2010 at 2:19 am
And I’ve been trawling (or should I say trolling?) house prices and saying a couple of them could be worth asking a few questions about.
85 Anon // Jul 8, 2010 at 3:02 am
Bght some long dated BP calls incase I am wrong. But risk has been substantially cut aswell as giving up some of the upside. Gotta manage risk and worry about downside before caring about how far it will go.
Ahh Ned the troller
Are the prices in your areas of interest begining to fall? Or at least sellers willing to move on price?
.
Re: house prices, i’m starting to plan for shorting the housing market, but still not sure how to do it…might play the interest rate spread or short banks or bonds or abit of everything
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86 Ned S // Jul 8, 2010 at 3:52 am
Djia very nicely above 9,800 again. Good -- Providing it stays above that I’m happy enough to accept the end of the world is not yet upon us!
Housing -- Just at a quick look I’d say maybe a few investors want out. But the mortgage belt stuff isn’t offering anything attractive price wise -- Although there is certainly a lot of stock there.
Shorting (trading) the housing market -- A while back the ASX and Rismark were talking about putting something together for those purposes. Not at all sure if anything has come of it yet.
87 Anon // Jul 8, 2010 at 4:04 am
Yep 9,800 has been breached. Good to see you’re not falling for all the bearish propaganda Ned
I’ll turn up the volume on all these bears if markets get expensive again tho.
This is my somewhat inaccurate simplistic assesment of whats happening now:
Crash
Recovery, everyone buys gold and heads into bunkers, gets shotguns. Pray to Allah
Bottom is in, while dust settles retail investors sell the bottom and prepare for the end of the world.
Huge rally, retail investors realise they missed out jump into the top again.
Big correction -- retail investors panic sell quickly before losses accumulate. The masses think its 08 all over again because its just happened so it must happen again !
Rally again -- Retail investors stay out doubting the rally.
Rally Tops out…retail investors buy in thinking..i’m definitely not panic selling again given I got tricked last correction!
Crash begins…retail investors hold on thinking its a “correction” and then get wiped out.
Rinse and repeat!
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88 Anon // Jul 8, 2010 at 4:16 am
Well i’m done, can hopefully leave things for awhile now ! This sounds eerily familiar? Another drawdown comming? lol hope not
Just need to control overcondfidence and remain grounded, which is really difficult to do.
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89 Anon // Jul 8, 2010 at 4:32 am
On a serious note, I hope we didn’t lose too many stock market participants during this correction.
Losing money is not fun and we’ve all experienced it before.
Sometimes the line between losing alot or losing alittle can be one or two decisions that takes 5 minutes to decide/research.
Looking at how far alot of these stocks have fallen, I’m abit worried about how many people are hurting out there
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90 Anon // Jul 8, 2010 at 5:01 am
Well close above 10,000 Ned! Didn’t think that was going to happen.
The media bears are going on about rally on low volume again lol. Low volume comming out of a correction = bullish!
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91 Ned S // Jul 8, 2010 at 5:39 am
“close above 10,000″ -- As you said very recently Anon, the market is nothing if not volatile!
92 Anon // Jul 8, 2010 at 6:44 am
Well lets hope the portfolio runs on autopilot from here. Time to relax
93 Biker // Jul 8, 2010 at 9:51 am
“Re: house prices, i’m starting to plan for shorting the housing market, but still not sure how to do it…might play the interest rate spread or short banks or bonds or abit of everything
.”
Please keep us advised. Clearly you know something we don’t!~
94 Anon // Jul 8, 2010 at 10:53 am
Hey Biker, not sure if you are pulling my leg or being serious
Hard to tell !
The plan for my bet against housing is around 2011-2012 and of course this is not financial advice. But this is purely a guessing game and I could be completely wrong.
*All posts by this poster is not financial advce or a reccomendation to do something. Always seek financial advice before making financial decisions.
95 Biker // Jul 8, 2010 at 2:36 pm
“…The plan for my bet against housing is around 2011-2012…”
No, I’m always very interested in the basis for any worst-case-scenario, Anon. We need to know what’s ahead in case a Black Swan crosses our path.
I can visualise a minor correction on the east coast, but all the indicators tell us the west coast will fly in those years. Despite that, we’re in holding pattern. We’ve cast so much bread upon the water that the appearance of a rogue Black Swan could be unavoidable!~
96 Ned S // Jul 8, 2010 at 2:48 pm
Hey Biker, what do you reckon about that idea of trading Oz residential RE housing indices on the ASX? Sounds like it could have some advantages -- No tenants to give a bloke grief; Don’t have to share any of the rent with the likes of management agents or local city councils or tradies (because there is no rent I guess -- Bit of a bummer that but what the heck, they don’t earn much rent anyway); Could still do all the neg gearing stuff I assume -- Just like any investment; But a bloke wouldn’t get to claim depreciation like he does on real housing; Although all the rent and depreciation type considerations would be reflected in the indices one was trading that are based on real housing anyway; Oh, and there’d be none of the current hassles re liquidity or needing to save up a deposit to participate. Lots of pros and maybe not too many negatives perhaps?
97 Biker Pete // Jul 8, 2010 at 6:48 pm
In a sense it removes that most comforting aspect of property, Ned… the ability to run my hands thru’ the soil, touch up a fleck of render, tighten a gate screw. It’s the ‘tangibility’ I need!~ There’s no weekend worry about what Yank traders might be up to on the weekend, no anxiety when the ASX is crashing down through the barriers, no need to consider catching falling cutlery, no fear of dirty bankers or rogue boards! Best of all, we know a great deal about our specialist area(s).
Tenants haven’t really ever been an issue. One of our rental agents, Ray Whites, screens tenants very well. Their rates are fair and reasonable. Our other agent costs us _twice_ as much… and, we suspect, has sweetheart deals with tradies.
We actually enjoy the hands-on aspects of property. It’s good fun, keeps us out of mischief… and it gives us a real thrill to get a new place up-to-spec. If we ever sold up, life really wouldn’t be the same… .
98 Vince L // Jul 8, 2010 at 9:57 pm
You guys do get what this discussion is about right? The “stock market”. There is another area where house prices are discussed.
99 Ned S // Jul 8, 2010 at 10:15 pm
I’m a ‘bloke’ actually Vince, ta -- Yanks have guys ‘n gals -- Whereas Aussies have blokes and the gender we are too scared to put a name on anymore in case we offend any of them!
100 Ned S // Jul 9, 2010 at 1:32 am
It doesn’t look like anyone has told the BDI it’s going the wrong way yet.
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