XAO Banter Thread

Logique said:

Props up equities and property..to some extent at least?

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Agreed as a concept but I wonder to what extent it has already occurred?

Interest at 10% versus 1% sure that will make a difference to a lot of things.

1% versus 0.75% though, well I’m thinking that if someone has cash sitting around at 1% and wasn’t interested in investing or couldn’t find anything which stacked up then will 0.75% really change that?

That’s a question more than a firm view since I really don’t know.

tinhat said:

If we break below the 6500 range then maybe it's down to around 6,050. This would not surprise me when I look at many stocks on my watch list that have jumped up in recent weeks with gaps that, if closed, would make for excellent buys.

In other words, when I look at many individual stocks, across many sectors, rather than just the XAO, I feel that stock prices have got ahead of themselves. There has been some exuberance that could be easily subjected to campaigns of shaking out weak holders. Look at COL for goodness sake yielding 1.6% before franking credits. You would be better off personally hording coffee beans than buy those shares surely?

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Agree with you 100%, I put in a speculative 54c buy on MCR yesterday, expecting a reaction, it bloody went up. Go figure.
I will leave it in market for the month.
I certainly hope this correction does head down toward the 6000 mark, that would be brilliant. IMO

Smurf1976 said:

Agreed as a concept but I wonder to what extent it has already occurred?

Interest at 10% versus 1% sure that will make a difference to a lot of things.

1% versus 0.75% though, well I’m thinking that if someone has cash sitting around at 1% and wasn’t interested in investing or couldn’t find anything which stacked up then will 0.75% really change that?

That’s a question more than a firm view since I really don’t know.

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I think the interest rate drop, is more about telling people you keep it in the bank and we will drop the earnings on it, spend it or invest it don't leave it sitting there.
The other issue of course is the Australian currency hasn't fallen, because it is one of the only currencies paying any interest, so dropping interest rates into synch with overseas rates stops propping up the dollar.
Having said that, a mate who has a Thai partner, says he is getting better interest on his money in Thailand than here, also the Thai Baht is strengthening against the Aussi dollar.
So obviously this starts to put pressure on these Countries, which is what the underlying issue is, if all manufacturing goes to these Countries, we end up with a complete role reversal.
The only one not playing the game is China, they control the value of their currency, so just devalue it to make their product more competitive.
Time to head off to happy hour.

I see quite a few downside targets (green) and one upside (red) which is a fair way away. I think something along the lines of the purple line might play out.

Looks like 7000-7100 will happen before any testing of supports.

doesn t that look very suspicious to you? is the RBA buying shares or eft??

I sense a disturbance in the Force. Anyone else?

I think it's heading down to 6534 in a hurry.

Gringotts Bank said:

I sense a disturbance in the Force. Anyone else?

I think it's heading down to 6534 in a hurry.

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Not sure Gringo …. yesterday's push down (Late Longs punished) and today's push up (Early Shorts being taken to the cleaners) is often a prelude for more Volatility

Given the DOW is still breaking higher, I think there will be a bit more pushing and shoving before we get the "express train to Strathfield"

Given I have now said that … It will be a bloodbath tomorrow lol ..

Markets are in the worst shape in a long time, but I think there's one more upwards move left.

ES has clear targets around 3210. Then there will be a big drop imo.

This is the 1 hour chart of the AU200AUD CFD on Oanda. I like to keep this open just because it reflects the SPI futs/24 hour trading rather than the index chart which misses the overnight price action.

Anyway, I noticed that the price just keeps rejecting at the 50% retracement of the most recent "trade wars are bad and hard to win" swing down, including again this morning after the open. Also happens to coincide roughly with last weeks close.

Probably worth watching as it looks like that level is the line in the sand for current consolidation and a break in either direction.

The trend remains bullish so I guess bias is to break up but it sure does look like someone has plenty to sell at that level.

and just after I posted this, another hefty rejection.

This 50% line is so mesmerising, both the market and me are apparently obsessed with it.

Yesterdays rejection of the line led to a 1% decline before a narrative flip back to "trade wars are good and easy to win" drove us all the way back up there again and looks like yet another rejection is under way after the last hourly close a few minutes ago.

Here's the 5 min chart highlighting onwards from where I posted yesterday with a bit more granularity.


I guess it is a bit worrying that the index can't break up from here on a bullish narrative day.

I'm as long of stocks as I always am (25%) and don't trade off intraday movement, this is just a fun observation for me. If we break up into uptrend resumption I will need to sell a little to stay within my allocation and if we break down then I get to start buying dips.

One small additional observation, given the relatively bearish short term action in both gold priced in AUD and very-long-term Australian Government Bonds, the latter of which I bought the dip on this morning, I would really expect the market to be able to break up on this level.

Well, shortly after my post on Friday the index started to break up above the 50% retracement and treat prior resistance as new support.

The NY session saw it test and then consolidate above there, with a power move up today!

The current price is pretty much exactly resting at the November monthly close price so it will be interesting to see whether December turns into an outside bar or not.

Hourly:

Monthly:

Whilst there are no certainties in these market, this monthly chart of the ASX200 really jumps out at me. The amount of Fibonacci/Lucas time cycles that converge to the ATH of last month is amazing. This may not necessarily lead to a major turning point, then again it might! Nevertheless its interesting)) Also SPX long term cycles due for a major peak according to time cycles.

Looks like I get the honour of first post of 2020 in this thread!

Quite the turnaround since Dec '19, where a breakdown with no new high makes that same swing down still the controlling range and essentially all the price action since then is just a consolidation within that range!

Here's the 4-hour chart showing all the action from late Nov 2018 with the same Fib retracement from above. Looks like someone wanted to sell a bunch into low year end liquidity and paid the price!



By my technical measures, the last weekly close of the year was bearish enough to constitute the beginning of a downtrend and expectation that the highest probability move is one to test/break the December lows.

Here's the whole of 2019 in monthly bars. The December bar certainly looks different from how it looked the last time I posted it, having been unable to break the prior monthly high or even hold onto levels around the prior monthly close.



Dec/Jan is the end/start of the new financial year for US investors, so you can usually expect some movement at the start of the year as international investors try to do some tax optimisation.

Here's the whole of 2019 as a weekly chart for US listed EWA ETF, tracking MSCI Australia Index which you can think of as somewhere between the ASX50 and ASX100 constituent wise but priced in USD.



FWIW, there's some minor bullish action in gold priced in AUD recently but very-long-term Australian Government Bonds got hit pretty hard at the end of the year (giving a nice dip to rebalance into) too so the ancillary signs from other important markets aren't exactly clear.

Consolidations are fun!

We are still trapped within the previously mentioned swing range and are now trading up in the even tighter range that developed from mid-late Dec, back up to the try against the November monthly close area again.

This action is whipsawing the weekly technicals I check for trend, so while I "technically" signal bearish if the week did close up around here it'd be back to bullish.


If you do look at the weekly chart really all the action since early August 2018 has been a choppy consolidation, but one with an upward bias to the bottom end of the chop.

I'd be curious to hear from @peter2 or other momentum traders about how their positions fared in that kind of market condition.



The recent action in AUD priced gold and very-long-term Australian Government Bonds has been quite strong recently so I was a little surprised when I saw todays action was so strongly bullish.

I ended last year already bullish the australian stock market for 2020. I'm bullish precious metals and base metals. I'm expecting a recovery in global trade because although they are the two biggest economies, direct US-China trade is only a fraction of total global trade. I'm seeing significant structural changes to the energy and transportation industries globally. Major industries are retooling globally and IT continues to radically change industry and market structure and behaviour across the entire economy globally too.

Recently I've become more bullish gold because it is clear that the USA is making itself less internationally economically relevant and powerful and technology (bit-chain) will see the demise of the USD as the global currency of trade and finance which will see the day of economic reckoning for the USA probably in my lifetime.

So a couple of themes as we enter into the last year of the decade and look forward to the coming one. The USD will fall, gold will rise and the XAO (total returns) will outperform the S&P500 (total returns) over the coming decade. Outward looking Aussie listed companies prepared to take on the world will thrive in IT, biotech and life sciences as well as the materials sector and precious metals.

Anyway, none of the above is what I came here to post about. I hopped into the car yesterday arvo and the radio came on. I'm not sure which ABC radio station I was listening to (Sydney, News Radio or Radio National) but I caught the end of a conversation and I wasn't really listening to it until it caught my attention. There was a bloke being interviewed, and as I said this was just the tail end of the piece, and he appeared to be suggesting that potential first home buyers look into putting their savings into geared ETF funds as a means to getting better return on savings as they strive to save up for a home deposit. I was gobsmacked. Did anyone else hear this story? Do you remember which program it was on so I can try and find it online?

I know that interest rates are so low now that some retirees are looking to mortgage against their property to invest in ETFs which yield a margin of 4 or 5 percent above the borrowing interest. I looked into mortgage rates for the first time in years myself the other day and sure enough you can get a ubank home owner mortgage for around 2.86% and even a five year fixed interest only investor loan (80% valuation) for just 3.33%. But by golly, suggesting to young people to gear into ETFs as a means of saving for a house. wow. Given that there is a very good chance of another interest rate cut, if this is the thinking that is going on out in the general public well, hold on! Bull market on the ASX here we come.

I exited all the stocks I held no conviction over today and I took profit on others. Good luck to all!

tinhat said:

I exited all the stocks I held no conviction over today and I took profit on others. Good luck to all!

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Why? Do you think the bull market has run it's course?