XAO Banter Thread

[Gringotts Bank]

I'll go with 4130 today. A pause for the cause. We've been less reactive than the Dow for a while now, in both directions.

edit: upside limit would be 10 points today (4153).

 

[Gringotts Bank]

Financial index up +31
Metals and mining down -5.

If I can offload some stock I'll buy ANZ and BEN today. Holding SLX for the moment but the breakout of the high flag is uninspiring at the moment.

 

[Gringotts Bank]

Bigger resistance looming 4171 today becomes 4164 tomorrow. That will be interesting.

Really pushing that resistance [4164] with a lot of confidence. Best it's looked in 2 months.

 

[Gringotts Bank]

Banks still keeping things afloat. Gold smashed, not good for my IAU.

4160 == a return to the resistance line, which is now support.

Nothing to expect today.

 

[skc]

ASX expiry day always brings out these funny pre-open prices that fluctuates between very high and very low for the biggests stocks. A glance at the market map you can see it flickers like a xmas tree from one minute to the next.

Can someone please describe in simple words what is actually happening and the rationale behind it?

Please don't say market maniupulation...

 

[Trembling Hand]

ASX expiry day always brings out these funny pre-open prices that fluctuates between very high and very low for the biggests stocks. A glance at the market map you can see it flickers like a xmas tree from one minute to the next.

Can someone please describe in simple words what is actually happening and the rationale behind it?

Please don't say market maniupulation...

All the arb trades (stocks & futs) and oppy trades (stocks & options) for the last month/quarter are being unwound. So you have a large volume of business wanting to be done on the open. Basically the bids and offers will be put out there with the hope they will get matched by someone wanting to unwind an opposite position or open an opposite position and take some easy volume. That will result in swings as hopeful bid/offers are matched or pulled as we get closer to open.

No manipulation. Just boys doing boring business, executing trades.

 

[Gringotts Bank]

Switch on your long systems. Smooth seas ahead.

 

[skc]

All the arb trades (stocks & futs) and oppy trades (stocks & options) for the last month/quarter are being unwound. So you have a large volume of business wanting to be done on the open. Basically the bids and offers will be put out there with the hope they will get matched by someone wanting to unwind an opposite position or open an opposite position and take some easy volume. That will result in swings as hopeful bid/offers are matched or pulled as we get closer to open.

No manipulation. Just boys doing boring business, executing trades.

I thought that is what happens. It is somewhat "gentlemanly" for all the instos to do their trades on open, as opposed try to execute their way to better VWAP through the day. I guess volume matters more to them than price and risk...

But for a small retail guy like me I can buy/sell if the opening price happens to be unbalanced and steal a few pips. In fact, I think with a good scan and automated system you can make very good money over the 12 days per year when this happens.

 

[sammy84]

Some very basing promising basing patterns in the financials. IFL, BOQ and SUN take my interest. CBA has already broken out (unfortunately I was stopped out of a CBA trade a few days ago).

History shows that recently financials lead the way when a new up-trend develops. Materials follow after. Hopefully something is in the making.

Chart below has XAO on top, financials middle and materials at the bottom.

 

[nulla nulla]

It will be interesting today to see whether the xao can breakout above the recent channel or whether it will falter as profit takers cash out, expecting a retrace and a drop back toward 4100(ish).

 

[tinhat]

It will be interesting today to see whether the xao can breakout above the recent channel or whether it will falter as profit takers cash out, expecting a retrace and a drop back toward 4100(ish).

View attachment 47998

It's not very often that the XAO breaks out above the upper bollinger band (2 std, 20 days) without retracing. If there is not an immediate retracement there may be a week of exuberance before a correction back to the trend line.

 

[nulla nulla]

No break out yesterday. Looked possible early but not enough consolidation and flow on support, faded into the finish to give up a few points.



The overseas markets gave up a good chunk of the weeks gains all closing down. The european situation isn't going away anytime soon and the underpinning weakness of the U.S (employment, housing & debt) is unlikely to allow the DOW to keep rising like a loaf of bread with too much yeast.
I suspect we will have a slide early next week on the xao and retest the 4150 levels and lower.

PS. I went to the "Trading & Investing Seminar's & Expo" in Sydney yesterday morning. Sat in on the Alan Hull season "Creating Wealth through timing the market" and Marcus Padley's "Ten things you need to know about the Stock Market". IMO Hull had his act together and gave a good overview about where the market is likely to go in the next few years. Padley was a little disorganised and ran out of time, skipping through much of his material. Both were promoting their new book sales. Some interesting stall set up as well. Etrade, IB, Lincoln & Metastock among others. IC Markets had a setup demonstrating currency trading. All interesting but I got the general feeling they are aiming at a younger demographic then me.

 

[sinner]

Switch on your long systems. Smooth seas ahead.

Hmmm...funny...mean reversion still paying those of us using actual traded prices...





Still holding them IAUs?

 

[skc]

Still holding them IAUs?

Be nice Sinner... that was not something GB or anyone could have foreseen. I am sure we've all hit these nasties in our trading career - and if you haven't you know it's just around the corner.

 

[sinner]

Be nice Sinner... that was not something GB or anyone could have foreseen. I am sure we've all hit these nasties in our trading career - and if you haven't you know it's just around the corner.

Serious concern there from me about the IAUs skc - today was pretty rough! As a past holder it's a stock of interest and opens are usually what I watch. I sold out when they sold Caposo to TRY. Apologies to GB if it sounded not nice.

I've been there, picking bottoms in EURNZD 2009 and watching my stops slip hundreds of pips in crap liquidity!

 

[nulla nulla]

down to 4160 in one day. A bit earlier than I expected.



I hope it can hold above 4106 tomorrow. If not the next support level is 4085?

 

[sinner]

down to 4160 in one day. A bit earlier than I expected.

I hope it can hold above 4106 tomorrow. If not the next support level is 4085?

Strong AUD is just not letting up and starting to work it's way into the longer term decision making and competitiveness around exports/imports which seems to now be affecting Resources in the same way it has usually been affecting Industrials.

Meanwhile Financials are loving it, well up on the year.

Generally if this were a liquidation event would expecting to see higher correlations across sectors. For example Utilities have seemed to benefit from global momentum in the sector as well as local defensive demand, so they're up too.

Investors aren't "panicking out of stocks and into liquidity" they are (for now) following single name/sector momentum and fundamentals. Prefer to cover shorts down here and wait for a breakout or range fade signal.

 

[drsmith]

I hope it can hold above 4106 tomorrow. If not the next support level is 4085?

The 10-year bond rate in Spain could be a drain.

Now over 7.5%, it's inflicting pain.

 

[skc]

Serious concern there from me about the IAUs skc - today was pretty rough! As a past holder it's a stock of interest and opens are usually what I watch. I sold out when they sold Caposo to TRY. Apologies to GB if it sounded not nice.

I've been there, picking bottoms in EURNZD 2009 and watching my stops slip hundreds of pips in crap liquidity!

Apologies for mis-reading your tone. Hard thing to do over the internet. Rough day for anyone holding materials really.

Strong AUD is just not letting up and starting to work it's way into the longer term decision making and competitiveness around exports/imports which seems to now be affecting Resources in the same way it has usually been affecting Industrials.

Meanwhile Financials are loving it, well up on the year.

Generally if this were a liquidation event would expecting to see higher correlations across sectors. For example Utilities have seemed to benefit from global momentum in the sector as well as local defensive demand, so they're up too.

Investors aren't "panicking out of stocks and into liquidity" they are (for now) following single name/sector momentum and fundamentals. Prefer to cover shorts down here and wait for a breakout or range fade signal.

I agree and it's very interesting - last August the panic was indiscriminant and utilities and REITs were sold off all the same. This year you find stables (WOW / WES / CCL), high paper yielders (TTS / TAH / TLS), REITs, infrastructures all at yearly highs. I am not sure I share the same optimism on these sectors - they are of lower risks but probably not by much at their current price levels.

 

[sinner]

Apologies for mis-reading your tone. Hard thing to do over the internet. Rough day for anyone holding materials really.

I saw BLD didn't clean up too good either

I agree and it's very interesting - last August the panic was indiscriminant and utilities and REITs were sold off all the same. This year you find stables (WOW / WES / CCL), high paper yielders (TTS / TAH / TLS), REITs, infrastructures all at yearly highs. I am not sure I share the same optimism on these sectors - they are of lower risks but probably not by much at their current price levels.

It's all about global interest rates at the moment for these sectors.

Perspective A:
If you are a big pension fund manager who has defined benefits of N% and the current yield on a global sov bond portfolio is N/3% then you will buy yield wherever you can get it (upto your allocation allowance obviously). If global Utilities ETF is yielding N+0.5% then that is gold, right? Your mandate is to meet the benefit for a number of years, not turn a capital gain.

Perspective B:
If you are a big pension fund manager in a country like Spain or Italy where rates are going up then global Utilities can provide some de-correlated returns (equities vs bonds) with similar yield.

and then some momo monkeys hop on for the ride.

Not saying it's a good idea...only what I think the drivers are.