XAO Banter Thread

[tech/a]

View attachment 51450

We are pretty oversold right now. Expecting some kind of push up shortly.

Dow + 90.
So do ya think?

Your little chart has little relevance to oversold.

 

[kid hustlr]

Dow + 90.
So do ya think?

Your little chart has little relevance to oversold.

Wrong side of the bed this morning?

Just posting the chart to support my view of what I think may happen in the coming weeks.

It's done ok in recent times.

 

[CanOz]

Wrong side of the bed this morning?

Just posting the chart to support my view of what I think may happen in the coming weeks.

It's done ok in recent times.

View attachment 51457

Hey Kid, breadth indicators as you know are the true pulse of the market. Eventually they make the market turn, un-disputable.

I think what Tech was so "tactfully" referring to to was the 90 point day on the DJIA. So the SPI has no doubt already priced that in. We could still see even a gap up again though as the Cyprus announcement came after the market closed in the US...to me this is a big chance to gauge sentiment. Does the GAP up (if it GAPS) find initiative buyers or responsive sellers?

I can't speak for Tech, but i don't think he was trying to be insulting or denigrating your post. Perhaps because he is usually posting from a mobile device some of the delivery gets lost in the interest of efficiency. At least i hope that's what it is. This is after all, a community.

Cheers,


CanOz

 

[chops_a_must]

Well...

http://www.politico.com/story/2013/03/senate-passes-budget-89244.html?hp=t2_3

Will still fade the open Monday, but not confident. I reckon we'll get a running gap.

 

[sinner]

I must say, I am surprised by the extent to which smallcaps are not participating in this rally! You can see the ASX20 are doing best.



considering how tightly coupled US Small Caps have been...

 

[skc]

I must say, I am surprised by the extent to which smallcaps are not participating in this rally! You can see the ASX20 are doing best.

View attachment 51518

considering how tightly coupled US Small Caps have been...

View attachment 51519

Is this because the ASX small caps are donminated by miners / mining services? My anecdotal observation is that small cap industrial shares doesn't seem to be doing that badly.

 

[McLovin]

Is this because the ASX small caps are donminated by miners / mining services? My anecdotal observation is that small cap industrial shares doesn't seem to be doing that badly.

Yeah that's what I thought too. The mining services companies have been well doing it very tough. Everyone's favourite fundy (Roger) was on Lateline Business last night talking about how he rarely knows things for certain but he is certain mining services is going to get worse.

 

[sinner]

Is this because the ASX small caps are donminated by miners / mining services? My anecdotal observation is that small cap industrial shares doesn't seem to be doing that badly.

Good hypothesis guys, I checked a few things to confirm:

* Canada smallcaps have suffered a similar underperformance
* According to Y! Finance, the holdings of ASX:ISO are 28% "Basic Materials" and 7.94% "Energy"
* According to Y! Finance, the holdings of NYSE:EWCS are 25% "Basic Materials" and 31.42% "Energy".
* According to Y! Finannce, the holdings of NYSE:IWM are 5.6% "Basic Materials and 5% "Energy".

 

[skc]

Good hypothesis guys, I checked a few things to confirm:

* Canada smallcaps have suffered a similar underperformance
* According to Y! Finance, the holdings of ASX:ISO are 28% "Basic Materials" and 7.94% "Energy"
* According to Y! Finance, the holdings of NYSE:EWCS are 25% "Basic Materials" and 31.42% "Energy".
* According to Y! Finannce, the holdings of NYSE:IWM are 5.6% "Basic Materials and 5% "Energy".

A decent portion of the 18.8% in industrials would be capital goods (i.e. mining services) as well.

 

[skyQuake]

I too am slightly puzzled.

ASX Small Ords 188.31B mkt cap, 33.91b is resources Which is 18%.

Looking at the ishares ETF sinner provided:

%Weight Distr

22.05 - Consumer Disc
20.46 - Materials
20.21 - Indust
15.35 - Fin
8.53 - Energy
3.69 - Tele
3.53 - Health
2.49 - IT
1.69 - Consumer staples
1.34 - Utilities
0.61 - Cash


Compare this to say the XJO and the difference becomes apparent:
44.23% Fin
18.43% Materials
8.86% Con Stap
6.85% Indu
etc etc

The resource holding is the same, main difference being the lack of financials in the XSO.

TL;DR:

Banks!

 

[notting]

It's fairly simple to me.

It all started as soon as there was a sure bet that the RBA was going to lower the benchmark rate.
People no longer wanted to be in cash so they looked for better dividends, but were not prepaired to take on risk.
They simply rolled the cash into the most secure highest paying, largest cap stocks.

There has been no risk on trade in Australia.
Actually the risk has been steadily coming off, whilst the above has been going on.

The possible positive is that this kind of action is supposed to be consistent with new enduring bull markets.
Once the larger dividend paying stocks are seen as overpriced and the rest feel they have missed the boat, the money will then start to look for a home in the middle and small cap stocks.
Probably after the first consolidation which seems to be trying to happen now.

 

[tinhat]

I agree with notting that "the great churn" has seen people taking money from cash because of falling interest rates and seeking "low risk" dividend yielding stocks. The flight for yield has also spilled over into some of the higher yielding small caps too. Possibly because there is money coming back into managed funds as well. Look at stocks like CYG (which I wouldn't buy), BYL just to name a couple. High yield but more risky small caps that have seen their prices rise nicely in this bull run. Then also look at the lower yielding growth blue chips they have all shot up too - DMP, CSL, CCL, SUL etc. The stocks dragging on the indexes are the materials and mining services as already mentioned.

 

[Garpal Gumnut]

I agree with notting that "the great churn" has seen people taking money from cash because of falling interest rates and seeking "low risk" dividend yielding stocks. The flight for yield has also spilled over into some of the higher yielding small caps too. Possibly because there is money coming back into managed funds as well. Look at stocks like CYG (which I wouldn't buy), BYL just to name a couple. High yield but more risky small caps that have seen their prices rise nicely in this bull run. Then also look at the lower yielding growth blue chips they have all shot up too - DMP, CSL, CCL, SUL etc. The stocks dragging on the indexes are the materials and mining services as already mentioned.

Muppet psychology rules.

Anyone who isn't buying resources/oilers on this weakness has rocks in their heads.

In ten years time which will be in shorter supply, banks and dvd sellers, or resources and oil.

gg

 

[Whiskers]

Hold off a bit there gg...

It seems the mining boom is slowing down. Some give it maybe another year or so before it settles down, ie lower. The rationale is that China will slow growth and demand for iron ore and copper etc. Their economy is going through a transitional change from unsustainable growth based on exports to more emphasis on maintaining stability with it's banking and debt issues.

Aus is expected to maintain a high dollar until the mining boom bites hard when we will transition back to more manufactoring based industry.

Also watch for our inflation rate lowering and more RBA cuts.

 

[Country Lad]

Anyone who isn't buying resources/oilers on this weakness has rocks in their heads.

hhmmm, that's me, I don't buy anything that is falling, only into strengths. Even make good money buying into those making all time highs.

In ten years time which will be in shorter supply, banks and dvd sellers, or resources and oil.

I'd rather concentrate on the here and now, not what somebody's crystal ball says may or may not happen in 10 years because the world will be a different place then. There is a lot of market action to occur in the intervening time.

Cheers
Country Lad

 

[tinhat]

The market has been resisting going above the 5170 area. The market is pensive again today (especially bank stocks). A rate cut could be the catalyst to see the XAO go above 5200 which would provide a minimum target for a leg up of 5400 as my guess.

 

[drsmith]

We have the rate cut and it may not be the last,

The Board has previously noted that the inflation outlook would afford scope to ease further, should that be necessary to support demand. At today's meeting the Board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target.

http://www.rba.gov.au/media-releases/2013/mr-13-10.html

 

[CanOz]

We have the rate cut and it may not be the last,



http://www.rba.gov.au/media-releases/2013/mr-13-10.html

This move was for the currency...gotta be...We're happy anyway, just exchanging some CNY-AUD.

CanOz

 

[RazzaDazzla]

Market got a quick shot in the rm from the rate cut, but futures decided to not get on with it. Will be interesting to see if the rate cut was the catalyst for another move higher - but it's a bit of a soggy start.

 

[tinhat]

Bad news people.

I've just stumbled upon this blog article:
Australia to enter a very sad period

It's not good. According to the author the 2007 top completed a one hundred year Elliot upwave and we are now only just starting to slide into a corrective pattern that will see the All Ords "mean revert" down to 2,200.



Personally I find it hard to see the Elliot wave in that chart.

Hold onto your hats and don't say I didn't warn you.