CBA - Commonwealth Bank of Australia

[swm79]

Might want to have a read of this:

http://www.theage.com.au/opinion/fo...y-is-a-bubble-set-to-burst-20091025-heo5.html

Our banks are more momentumn than mean reverting

was that directed at me?

thats what i was saying with the money being directed into the CBA

scary to think the USD is controlling all of this - esp with the big four banks and BHP and RIO controlling a 1/3 of total market cap.

especially with the Q3 US GDP figures out soon - imo surprise upside

 

[cutz]

Relatively heavy volumes on the oppies today, for those of you that are interested the Nov. 54's (puts) have been selling like hotcakes.

 

[BradK]

Looking like a nice little short trade there Sinner. Are you going to keep moving your stop down to lock in some profits?

Brad

 

[sinner]

Hi BradK,

I posted an update but nomore4s deleted it because it wasn't high on content. Fair enough in my book, ASF is a high quality forum and I have no issues trying to keep it that way.

I closed some of the position out over the last few days to bank some profits ahead of the US GDP figs, but the core position will run on as mentioned in the original trade plan as a FREE TRADE. Stop loss is in place at break even as per original plan. To me there is no point moving stop loss further than original entry as it will remove the trades breathing space. If it gets hit at entry that is fine with me as I already banked some profits.

Shorting CBA was even better than shorting A/U over the last few days, and coupled with GBP/USD longs and USD/CHF shorts over the same period, it has been a great week on the market.

I am levelling my account today to a few core positions and am done for the year! See you Jan 15!

 

[swm79]

imo surprise upside

it's not often that i quote myself.... but hello surprise upside!

but didnt pick the AUD climbing as well... damn it!

 

[freebird54]

The annual report is a bit of a worry - we cannot get anyone to answer this

DERIVATIVE POSITION OF CBA IS OF CONCERN?

On page 130 of the annual report Note 11 of Commonwealth Bank bottom line.

The total recognised derivative assets is $1.35T 08 year and $1.57T for 09 year and increase of $220bn.

If we calculate the fair asset value and fair asset liability for the 08 and 09 years we find they have lost $4.5Bn.

The loss of $4.5bn was confirmed by CBA investor relations but basically said it was immaterial because they take out more derivatives to cover these positions.

My question is........

Is $1.57Tof derivatives a worry and should investors be concerned about the $4.5Bn loss even if it was covered by new derivatives.

Why in this financial climate would they increase their derivative position by $220Bn in one year.

Was it not these that caused the meltdown?


Can we make sense of this - a T is small on paper a trillion is a lot of money

and who said another huge bank somewhere in the world is in trouble?

Yes I know deposit a/c are govt. guaranteed FWIW.

 

[sinner]

Very surprised to find this thread dead again, CBA has been leading the market:



Anyway, here is my updated analysis using daily chart. Comments on the chart. If I wasn't already short (first arrow) I would be adding shorts at tomorrows close.

 

[WRONG'UN]

Quote Freebird54: "a trillion is a lot of money"

$1T worth of $100 notes, stacked on top of each other, would make a pile about 1,000km high - well into outer space!

 

[Mofra]

Bankwest reports reduction in bad loans

Source The Australian Financial Review --- Page: 22
The impairment cycle for Australian banks is improving. Bankwest has improvedits bad loans in the September 2009 quarter by almost $A140 million. Parent Commonwealth Bank of Australia was equally optimistic about the trend


Interesting to read - could this be a precurser to an improvement in loan quality for the wider CBA loan book (the largest in the land)?

 

[sinner]

Hi guys,

I don't want this to become "sinners bearish on bank stocks" thread so post your comments and input please!

Previous shorts from 56 paid, which indicates to me this price level and above is an alright area to test the market. I am attracted to re-short this stock based on todays volume.

We have had a classic pinbar/upthrust formation on high volume followed by a "no demand bar": an up move on extremely low volume - but still within the range of the prev high vol bar. Further upmove was on even lower volume. It is my opinion that smart money offloaded into todays market strength on the back of gold and other commodities. Remember: professionals only buy weakness and sell strength.

The RSI6 just barely managed to pull of what I would call an acceptable counter-trend divergence (I prefer no more than 7 bars generally, this one is 9) and volume oscillator is simply not convinced that this upmove is genuine.

CBA has issued just over 300 million AUD in foreign denominated debt in the first week of 2010 alone. I am not convinced financials are valued correctly and would like to profit from a return to more sane price valuation levels for this stock. I am also seeing some preliminary signs of index futures rolling over based on their On Balance Volume. Holding shorts from 56.68 with a 10c stop. Would like to see a break and close below the pinbar and 56.5 psychological level to confirm my view.

DISCLAIMER: The previous and proceeding posts are all trading analysis by myself, for myself - posted here for the benefit of other traders to share their thoughts and experience. Please do not follow my calls. Please do not interpret my calls as financial advice.

 

[sinner]

Holding shorts from 56.68 with a 10c stop. Would like to see a break and close below the pinbar and 56.5 psychological level to confirm my view.

Well, that was really a lot quicker than I expected. Stopped out with no slippage for 1%. Still believe in my analysis, but won't trade this stock again today.

 

[nomore4s]

Well, that was really a lot quicker than I expected. Stopped out with no slippage for 1%. Still believe in my analysis, but won't trade this stock again today.

Probably best to either short it on the close or wait for another day with a bit more weakness in the market to go short with such a tight stop.

Just my

 

[sinner]

Probably best to either short it on the close or wait for another day with a bit more weakness in the market to go short with such a tight stop.

Just my

Thanks for the input nomore4s, I will keep it in mind in any case. The reason I shorted there was mostly because the result of a no-demand is either a severe price correction or...well...demand. Fear of missing out is still a bit part of trading psychology that I need to overcome.

In this case we got demand, I was happy to be proved wrong, managed to scalp my losses back on AUDUSD within 15 mins :

 

[nomore4s]

Thanks for the input nomore4s, I will keep it in mind in any case. The reason I shorted there was mostly because the result of a no-demand is either a severe price correction or...well...demand. Fear of missing out is still a bit part of trading psychology that I need to overcome.

In this case we got demand, I was happy to be proved wrong, managed to scalp my losses back on AUDUSD within 15 mins :

lol well done on the AUD trade.

The only reason I'd short either the close or not at all on a day like today is when the XAO holds gains like this into the close there is a chance we will see a strong close on stocks like CBA. Probably need to wait for confirmation on days like today.

Also CBA has had a breakout on the daily charts and traders could be looking to buy into the close as it looks like holding today. Shorting on the close will let you pick up any overnight weakness but could obviously cause some slippage on overnight strength.

 

[gooner]

CBA has issued just over 300 million AUD in foreign denominated debt in the first week of 2010 alone.

Sinner. Not sure why you consider this relevant? This amount is chickenfeed for a bank the size of CBA

BTA - agree that CBA is overvalued

 

[sinner]

Sinner. Not sure why you consider this relevant? This amount is chickenfeed for a bank the size of CBA

BTA - agree that CBA is overvalued

I am keeping a close eye on debt issuance by the big 4, waiting to see if they get crowded out of the debt market by massive US treasury issuance.

$300 mil is chicken feed IF you can sell it. Although by the looks of AUDCHF and AUDHKD over the last week, they had no problems.

 

[Garpal Gumnut]

Whatever happened to the old dictum, buy on the rumour , sell on the news.

CBA seems to be defying this dictum late on Friday afternoon.

It will be interesting to see if it keeps its momentum up.

gg

 

[oldblue]

I wasn't aware that there had been a rumour? I thought the market was expecting that bank profits would be flat for a while yet.

I don't hold CBA but hoping it bodes well for my ANZ, NAB and WBC.

 

[condog]

I wasn't aware that there had been a rumour? I thought the market was expecting that bank profits would be flat for a while yet.

I don't hold CBA but hoping it bodes well for my ANZ, NAB and WBC.

Good luck the lshort to mid term out look for NAB and ANZ is not as rosey, given there big cap raisings at the bottom of the market has drmatically affected shareholders equity and is predicted by commentators like Roger Montgomery to be around 12% possibly less for a while... WBC this year may suffer, but next year as they begin to close branches and achieve synergies should be better...

CBA has been the pick since Sept 09 after the other all diluted so much and CBA did not....I thank god sold all my other bank shares and raised my CBA stakes recently .....

Yesterdays announcment was very nice, but expected.... Ive been saying this same message in the beginners forum for about 2 months... hope some people chose to DYOR rebalance....hopefully some people took it on board...

 

[ginar]

Entry based on time to report and div . Held support today closing above 50.00 , 49.60 is a multi pivot support level with recent low around 48.00 another area for support . If the world falls out of bed is likely the biggest danger .


11 Aug, 2010 Full year results and final dividend announced
16 Aug, 2010 Ex-dividend date