XAO Banter Thread

[notting]

Quick! Start talking about facebook.

 

[Trembling Hand]

Quick! Start talking about facebook.

Huh?

 

[skc]

I wouldn't fight all this cash.

BUT

The setup from here seems like we have a high on the open from yesterday and a low from 30 mins ago for the week for all markets Equity, Commods & FX. (Aussie & Euro equity reverse times for H L)

I would play the week ending as a breakout week if we can move and hold past the current set H/Ls by tomorrow. That is take out the lows soon, by Friday we will be much lower. Or reverse come Friday if we can push through the highs.

Now where is that fence?

I see. If it breaks up it'd be higher. If it breaks down it'd be lower...

Looks like everyone's rolling over now.

 

[notting]

Huh?

Nasdac is at record levels since it's pop due to money going into the tech sector in anticipation that it will all benefit from the Facebook float.
That float will also get a lot of tongues wagging about the market and bring in a generational interest into the markets - New money that the market has been lacking since the crash.
So what I'm saying a little cynically is - the media and anal_ists should now start reving it up if they want the SP500 to smash through to new highs since the crash - and make the market!

 

[whitefang]

So what I'm saying a little cynically is - the media and anal_ists should now start reving it up if they want the SP500 to smash through to new highs since the crash - and make the market!

I agree that we may see now another leg up, with Greece deal done and attention going back to USA/China. Just keep the momentum going for a little longer. We may see XJO in the 4400 area again. Though so far ASX seems to be the only market really excited about the Greek deal
It may take much more to break outside this range we have been in for a while...

cheers,

 

[RazzaDazzla]

Welcome back TH!

How was your break?

 

[Gringotts Bank]

Quite a few speccies showing resistance. Nothing looks ripe for picking. I'm betting lower next few days.

 

[nulla nulla]

Here we sit in Australia, one of the few economies in the world that did not go into recession when the gfc hit. While the rest of the world is drowning in sovereign debt we are relatively sovereign debt free.

So why is it that the DJIA is testing 13,000 and the Nasdaq is testing 3000 again while our fantastic market is still wallowing under 4400? Why isn't our market back up arround 6000?

 

[Logique]

I've noticed this relative under performance as well. I see one factor being a sense of creeping sovereign risk from a set of federal policies on the cusp of introduction. More than adequately canvassed on the political threads - with a variety of differing opinions therein. Another factor is that our market index is heavily influenced by commodities and metals companies, which were hit hard last year.

 

[nulla nulla]

I've noticed this relative under performance as well. I see one factor being a sense of creeping sovereign risk from a set of federal policies on the cusp of introduction. More than adequately canvassed on the political threads - with a variety of differing opinions therein. Another factor is that our market index is heavily influenced by commodities and metals companies, which were hit hard last year.

I'm leaning more to the impact of the rising Aud$ discouraging foreign investment in our share market. Potential foreign investors would be apprehensive that a fall in our dollar would have the ability to undermine their investment far more than they would gain through share price gains, divs etc.

 

[Logique]

Yes a point well made, closing in on $1.08 US, and has been strengthening against the Euro and GBP as well. Plenty of opinion that a stronger AUD is here to stay, but that doesn't mean internationals aren't nervous. Strong AUD impacts profitability of exporters as well.

 

[Trembling Hand]

I'm leaning more to the impact of the rising Aud$ discouraging foreign investment in our share market. Potential foreign investors would be apprehensive that a fall in our dollar would have the ability to undermine their investment far more than they would gain through share price gains, divs etc.

A strong dollar in its self shouldn't hold back foreign money when there is a sea of liquidity looking for return. If you are a hedge fund with a spare $2 bil borrowed at close to nothing looking for return the ASX would only be a bad place if you thought the high dollar was not going to last. These dudes chase big trends.

If you invest in XJO @ AUD 1.06 is no real difference than AUD @ $0.80. Its what happens after you get in. If they think AUD is going to $1.12-$1.15 then XJO @ 4300 is a bargain. So far it would seem the double risk of currency at these levels and small liquidity equity markets is unattractive.

 

[tinhat]

Regarding the exchange rate. I thought Glen Stevens made a very interesting point in the senate estimates committee hearing the other day. He is surprised that the AUD has remained high despite that commodity prices have come off. Whereas the AUD has historically tightly tracked commodity prices and our terms of trade, at the moment there is a divergence. This fits the story of the AUD being somewhat of a sovereign risk safe haven of late.

Regarding the XAO under-performance of the SPC. I find this obsession with the New York stock exchange a little antiquated. For all this talk of Australia hitching its wagon to the China (and Asia) steam train, I wonder whether people's thinking has caught up with the zeitgeist yet.

The attached image shows the relative performance of the XAO (black) against the S&P500 (red) and the Shanghai A Index (blue). Just imagine, if the XAO tracked the S&P500 it would be at 6100 right now. Sorry time scale is missing from the bottom of these charts. First one is from the bottom of the crash around March 2009.



If we go back to the beginning of the current secular bear market for the S&P 500 (back to around 2001) we get a very interesting story from comparing the three. Time scale is from around start of 2001 after the dot com crash.



As far as I can tell from the S&P data I downloaded the S&P500 P/E is currently around or just above 14. I don't know what the PE of the S&P200 is - I would imagine it is lower more around 12?

Anyway, lets look at the Aussie market and some of its current attributes:
- high $
- high interest rates
- softening in commodity prices
- highly trade exposed & concentrated in minerals
- uncertainty around China's growth in the short/medium term.

They also say that the US stock market generally goes up in the year of a presidential election. As crazy as it might sound to us, I think those Americans actually believe all the bull**** their politicians come up with and actually get caught up in the false promise of the empty rhetoric of the simple minded nationalist, imperialist propaganda they excel at.

 

[Trembling Hand]

Yep good point Tinhat. Everyone says we follow the dow? But we clearly haven't been. Our economy/market has little to do with the outcome of Apple etc.

The China market and infact all the other Asian markets, Kospi, Taiwan, Japan, have also not been pulled up by the US. Why would ours?

 

[tinhat]

Correction to my last post. I believe the Aegis data as used on news.com.au/business states that the current PE for the Australian "market" (not sure if that is S&P 200?) is 13.8. Business Week reported yesterday that the S&P 500's P/E has fallen since April 2011 to now be at 14 (in other words, US company earnings are growing). Source.

So, The Aus S&P200 and US S&P500 are both currently at similar P/E ratios.

 

[kid hustlr]

A strong dollar in its self shouldn't hold back foreign money when there is a sea of liquidity looking for return. If you are a hedge fund with a spare $2 bil borrowed at close to nothing looking for return the ASX would only be a bad place if you thought the high dollar was not going to last. These dudes chase big trends.

If you invest in XJO @ AUD 1.06 is no real difference than AUD @ $0.80. Its what happens after you get in. If they think AUD is going to $1.12-$1.15 then XJO @ 4300 is a bargain. So far it would seem the double risk of currency at these levels and small liquidity equity markets is unattractive.

Great point.

Further, with such a large number of of the ASX200 companies having a reliance on offshore earnings, wouldn't the high AUD also be impacting profitability and therefore valuation?

I still don't think the world economy is in a 'risk on' mentality given the global uncertainty. As such if these big hedge funds/banks/whatever can borrow at next to nothing and take a decent clip on the carry trade why wouldn't they be taking advantage?

 

[sammy84]

Can anyone out there give me the seasonal stats for the XAO?

I'm curious with the March dividend season what the typical March return is.

Thanks.

 

[Trembling Hand]

Can anyone out there give me the seasonal stats for the XAO?

I'm curious with the March dividend season what the typical March return is.

Thanks.

Yep

 

[patchau]

Can anyone out there give me the seasonal stats for the XAO?

I'm curious with the March dividend season what the typical March return is.

Thanks.

What start/end dates would most suite eg... mid March to late April?

 

[sammy84]

Yep

View attachment 46294

Tech

What's your opening price parameter? Is it 1 March?

Patchau, I am looking for 1 March to 31 March.

Cheers all.