The stock market is crashing....

[Sean K]

Chindiapanaiwan did not stop develping overnight!

The fundamentals are still there. Hold on and be prepared to buy when you see a good opportunity.

 

[powerkoala]

copper may revive as strike in Mexico

0459 GMT [Dow Jones] LME 3-month copper at $7,625/ton, down $75 on London PM
kerb, but off intraday low of $7,595 hit in early Asian trade. Support coming
from news that workers at Grupo Mexico's Cananea copper mine on strike - workers
commemorating 100th anniversary of 1906 walkout that ended in violence; Grupo
says full effect of walkout wouldn't be clear until today. Good news for copper
bulls if strike prolonged, says Shanghai-based analyst; overnight Grupo
announced its Mexican copper output expected to fall in 2006 as result of
ongoing strike at its La Caridad mine.

-------
hope this is true

 

[Ageo]

Could you give us an example of say,

How far out you'd write the call and strike price?
How you'd determine both?

Lets say Im trading BHP.

Sorry it took so long,

ok this would be one way i would look at minimising my downside exposure.

Lets say i bought BHP @ $28.50

BHP moves down to $28.14 (36c down).

I write a covered call with a $30 strike ($1.50 away from your bought price) for a premium of 43c (asx qoute) June Expiry. Now if it continues to down trend for this month (or stays below your purchase price) and your praying that it comes up well at least you can offset your loss.

Obviously i would have a stop loss in place (money management) to cap my loss for a worst case scenario. So lets say i was happy to place my stop at $26.00. So my worst case loss would be $2.07

If it stayed above $26 but below even say $28.50 then i have reduce my loss (by 43c).

If its above $28.50 but below $29.50 (you can either buy back your position but your still in profit because of the capital gain) or let it expire worthless and receive 43c as a credit.

If it starts to move above $29.50 then you can simply buy your call back and have a capital gain profit. Even if it costs you a tad more to buy it back you will still be better off.

Now i would only do this if in a correction phase or even a stagnate position. But in a bull run i would just move my stop loss up and lock the profits in.


Adrian

(This is my personal view)

 

[wayneL]

Unless the MM is nursing a hangover, suffering double-vision drowning in coffee, when the market tanks, Call premium evaporates, but, any bounce can play havoc with your escape clause.

jog on
d998

After the caffeine kicks in though, he/she will sell puts, buy calls and short the stock for a risk free arbitrage profit, forcing the restoration of parity.

If the puts are exercized (presumably at a much lower stock price) he/she ends up with crystallized profit and a lottery ticket long call.

But the bounce for CC players certainly would be unwanted, thats for sure.

 

[Sean K]

Oooh, It's going to be ugly for equities today. DJIA in the red 1.7%. Ouch! Bernanke standing on his todger again, ramping up the prospect of higher rates. Perhaps there's a plan there. Somewhere.

Gold up. Maybe the yellow metal will be back in favour for a little bit.

 

[noirua]

Oooh, It's going to be ugly for equities today. DJIA in the red 1.7%. Ouch! Bernanke standing on his todger again, ramping up the prospect of higher rates. Perhaps there's a plan there. Somewhere.

Gold up. Maybe the yellow metal will be back in favour for a little bit.

Yes indeed, and Doctor Doom ( Dr Marc Faber ) has been on Bloomberg to add to the depression; He favours US bonds and the US Dollar for the 3 - 6 month period, on a view that there will be a flight to quality. His long term view is bearish on the US Dollar. He will state further views on Bloomberg after the ASX opens.

 

[RichKid]

Yes indeed, and Doctor Doom ( Dr Marc Faber ) has been on Bloomberg to add to the depression; He favours US bonds and the US Dollar for the 3 - 6 month period, on a view that there will be a flight to quality. His long term view is bearish on the US Dollar. He will state further views on Bloomberg after the ASX opens.

Do you have the links to the interviews please? I couldn't find them.

 

[mit]

Oooh, It's going to be ugly for equities today. DJIA in the red 1.7%. Ouch! Bernanke standing on his todger again, ramping up the prospect of higher rates. Perhaps there's a plan there. Somewhere.

Gold up. Maybe the yellow metal will be back in favour for a little bit.

I wouldn't be surprised if he retracts some of his statements again. The American markets are still used to Greenspans very measured and understated style.

MIT

 

[wayneL]

I wouldn't be surprised if he retracts some of his statements again. The American markets are still used to Greenspans very measured and understated style.

MIT

I think if he does that again, he'll really tank it. It will spotlight the fact he doesn't know what he's doing.

Historically, the economy usually tanks soon after a new fed chairman, apparently.

 

[powerkoala]

Another south for tomorrow...
This is too much....
I lose hope that the market will ever bounce back...
Any ideas ?

 

[nizar]

Another south for tomorrow...
This is too much....
I lose hope that the market will ever bounce back...
Any ideas ?

my original target still remains: 4800-4900 for asx200

there will be increased volatility i think at least until the fed meeting 28/29 june

 

[wayneL]

From the people economist:

Talking with broker Robin Landry, one of the best technicians I know, during the final minutes of yesterday's nose bleed, he made a very interesting observation: "George, I think one of the big hedge funds might be in trouble..." Naturally, I asked the obvious follow up question - "How can you tell, Robin?"

"George, when the price of oil is up like it is (was yesterday) and you see the big energy stocks dropping, it might be telling us that someone is in trouble."

Could be. But, as Landry notes, the market looked short-term oversold yesterday, so maybe we will bounce this morning - the futures point that way. The bigger question: How long can we tread water when Ben Bernanke is admitting he's worried about inflation?

Jack be nimble

 

[Nick Radge]

Here is the DJIA which has been the strongest of the US indices. I've been stating for awhile that this market was due and last night (not shown below) cracks the DJIA open. The Nasdaq, which contains a little over 3000 stocks, was the first to confirm the down move awhile back. Next the S&P 500, which has 500 stocks, followed suit. Last night the DJIA, with just 30 stocks has confirmed. We've been seeing a trickling effect up from the broader market to the major's. I've been showing how using the patterns within the S&P 500 on its own, then converting into DJIA points and then into XJO points how all the charts correlate with the same targets to the downside.

The S&P is showing a minimum decline of approxiamately 50-points basis an Elliott Wave count. This converts to roughly 550 DJIA points. If we look at the DJIA chart below, the measured move out of the head & shoulders top is exactly 550-points below. In the XJO in converts to roughy 250 points. The maximum wave-4 corrective move in the XJO is 4680, but the current price minus the 250 equates to 4780 which sits nicely above the wave-iv maximum move.

For the fibonacci doubters, the recent corrective retracement was exactly 0.382%, although slightly shallow for my liking. A shallow retracement on light volume is not a good sign.

 

[coyotte]

Probably scare tactics by the US Feds

How can they increase interest rates next time when their housing industy gone bust ?

this has worked perfectly ? --- took the specs out of all markets --- so by the time of next round of rates review this have settleled

 

[Sean K]

Once the Fed actually provides the decision one way or the other the markets will settle. It's the uncertainty that has most people rattled I reakon and contributed to the volitility.

I still think the 50% fib retracement line at 4800 for our market is where the true support will be found and that will be a good entry point back into the general market.

 

[professor_frink]

nick mentions 4780 as a possible target- It looks like we could find some support around that area from the lows made in feb.

 

[noirua]

Washington Post - Ben Bernanke:Tough Guy

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/06/AR2006060601324.html

 

[bowser]

Washington Post - Ben Bernanke:Tough Guy

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/06/AR200606060601324.html

Checking link at the moment.

Page no longer available, do you have another link?

 

[noirua]

Page no longer available, do you have another link?

I was checking the link, you will find it OK now.

 

[noirua]

Do you have the links to the interviews please? I couldn't find them.

The only link I can find is the following, not quite the same as the Bloomberg TV interview in the US, Hong Kong and UK: http://www.gloomboomdoom.com/marketcoms/mcdownloads/060605.pdf