XAO Banter Thread

[Gringotts Bank]

5270 will be the day's low, imo. Up tomorrow.

 

[Gringotts Bank]

5270 will be the day's low, imo. Up tomorrow.

However, REITS and banks starting to look very weak. 5270 hasn't held either. Re-think here.

 

[Trembling Hand]

5270 hasn't held either. Re-think here.

Oh? That post marks the only thing that looks like an Index buy all day!

 

[Trembling Hand]

Gee! XAO doing a good impression of a sinking ship into the close.

 

[burglar]

Gee! XAO doing a good impression of a sinking ship into the close.

Hey TH,

Don't know why but ...
Just thought about what you posted elsewhere, earlier.

It finally turns up and there you go you nailed it.

Randomness squeezed into a 'pattern' for the punters.

 

[skc]

Gee! XAO doing a good impression of a sinking ship into the close.

Pretty aggressive selling on all sectors except materials... may be there's no Santa rally this time around.

But we are only back to where we were 10 weeks ago and it's only a 5% correction. Last time in May with taper talk and $A falling, it fell 600 points in a lot of hurry. The market is still up a good 15% this calendar year so still plenty of back padding and self congratulations amongst the fund managers.

BTW, are you coming to the Xmas party afterall?

 

[nulla nulla]

However, REITS and banks starting to look very weak. 5270 hasn't held either. Re-think here.

God knows I hope this is the capitulation stage and not the start of a huge bear run. Ouch. All the normal entry points didn't just get hit, they were sold through with a vengance. Personaly I can't see the basis for the slap down of the A-REIT's. This sector did not rally with the All Ords, has been sold down with the falling Aussie dollar already and doesn't have the overgeared exposure it did before the GFC. :1zhelp:

 

[Struzball]

God knows I hope this is the capitulation stage and not the start of a huge bear run. Ouch. All the normal entry points didn't just get hit, they were sold through with a vengance. Personaly I can't see the basis for the slap down of the A-REIT's. This sector did not rally with the All Ords, has been sold down with the falling Aussie dollar already and doesn't have the overgeared exposure it did before the GFC. :1zhelp:

IMO we're nowhere near capitulation... we'll see how 4900-5000 holds..

 

[nulla nulla]

Another 10 point drop today. Not bad for a Friday. Way better than yesterdays effort.

 

[coolcup]

God knows I hope this is the capitulation stage and not the start of a huge bear run. Ouch. All the normal entry points didn't just get hit, they were sold through with a vengance. Personaly I can't see the basis for the slap down of the A-REIT's. This sector did not rally with the All Ords, has been sold down with the falling Aussie dollar already and doesn't have the overgeared exposure it did before the GFC. :1zhelp:

Perhaps fear of tapering is hitting all interest rate sensitive asset classes?

 

[nulla nulla]

Perhaps fear of tapering is hitting all interest rate sensitive asset classes?

By "fear of tappering" I'm assuming you mean fear of the withdrawal of quantative easing by the U.S Treasury. Yes I believe that the fear of tappering impacts negatively on all interest rate sensative asset classes. However, I can't understand why the impact on A-REIT's appears to be so disproportionately negative? Most of the A-REIT's have incredibly low gearing rates. We are constantly being updated as to how they are renegotiating the forward finance on even lower interest rates. Their yields are constantly arround or above 5%. This well and truly beats bank & bond interest rates, yet the sector appears to be under seige at the moment. The volitility is becomming increasingly hard to track. Previous entry levels are becomming exit levels? Personally I don't think it bodes well for the near term future. IMO any official confirmation of tappering, could send the market into a spiral.

 

[qldfrog]

Am I the only one to believe we are well inside the start of a severe correction?
We are on the ASF forum but there is hardly any reaction to the fact the christmas rally is turning into a christmas debacle?
To state the obvious, Australia's economy is not exactly great and now we have our own debt to service.
I expect never ending negative profit adjustment releases for companies in the coming months.
More worrying,the US market has gone higher and higher with billions injected to kick the can ahead, but every new day takes us nearer to the announcement of a slow down/end of QE.
Europe is still very sick and no real light of hope in China.
Materials are weak and this is bad for the ASX too.
The DOW has probably reached its top now for a little while.
I started divesting end october and so far so good, the XAO today ended at the same level as early september and actually lower than it was in mid may so the last 6 months went nowhere.
People can argue that we had the dividends and indeed the XAOA is lightly higher now than it was in May but not by much and we had inflation.
Anyone who could change my mind and give me some bullish point short term (3 months) for the ASX?
I am definitively bearish oz equity short term, bullish local RE (as people will all rush to put their money there) with another nice bubble forming.

 

[coolcup]

By "fear of tappering" I'm assuming you mean fear of the withdrawal of quantative easing by the U.S Treasury.

Yup, spot on. Sorry for not being clear.

Most of the A-REIT's have incredibly low gearing rates. We are constantly being updated as to how they are renegotiating the forward finance on even lower interest rates.

This is not really why they are being sold off in my opinion. It is more to do with AREIT pricing historically having a strong correlation to long bond yields. So if the view is that long bond yields are going up (because of tapering) then the yields required from REITs also increases which pushes down prices. This, coupled with the need for capital to fund the pipeline of IPOs and the tanking AUD has pushed the REIT sector down considerably of late.

Their yields are constantly arround or above 5%. This well and truly beats bank & bond interest rates, yet the sector appears to be under seige at the moment.

A yield of 5% without franking credits is really not that attractive in the market compared to industrials / banks with franking credits and better earnings growth prospects.

Overall, I think it is an easy sector for instos to sell. REITs are not going to surprise people on the upside in terms of their earnings so they are a typical funding source when instos go hunting for IPO stag profits!

 

[nulla nulla]

Yup, spot on. Sorry for not being clear.!

First I had heard of it, but then when I read other articles the last few days it was a recurring term.

This is not really why they are being sold off in my opinion. It is more to do with AREIT pricing historically having a strong correlation to long bond yields. So if the view is that long bond yields are going up (because of tapering) then the yields required from REITs also increases which pushes down prices. This, coupled with the need for capital to fund the pipeline of IPOs and the tanking AUD has pushed the REIT sector down considerably of late.!

Agreed but i consider it is more likely a combination of factors of:

1. Further foreign investors selling off Aud$ A-REIT's to buy into the US markets;
2. Selling down of A-REIT's to buy longer term bonds including Aussie Bonds; and
3. Reweighting of portfolio's to free up cash for some of the IPO's.

A yield of 5% without franking credits is really not that attractive in the market compared to industrials / banks with franking credits and better earnings growth prospects.!

Yeah but even the banks and industrials got sold down last week.

Overall, I think it is an easy sector for instos to sell. REITs are not going to surprise people on the upside in terms of their earnings so they are a typical funding source when instos go hunting for IPO stag profits!

Risky business in the present market to expect stag profits from IPO's. From memory Veda is the only one to outperform their issue price. Stuffed if I would buy Channel Nine.

 

[So_Cynical]

Watching a few videos tonight and joining the dots etc...i think a major correction is on the cards, actually thinking about a total liquidation of my holdings, the first time i have genuinely felt that way.

There is a genuine global equity's bubble fuelled by mostly the US stimulus and also other national stimulus's, its all artificial and bull**** and there's no where else for the markets to go when its eased...the start of the stimulus withdrawal cycle will lead to a major correction.

Just no other way to see it, fact is the stimulus will be eased at some point and fact is the markets will respond by falling as capital is withdrawn...looking for a longer term short.

 

[qldfrog]

Fully agree: see my post of the 6th above.a correction is needed: sure,and it will happen a certainty too;
The issue is when?
And I believe it will happen now 9ie start 2014
I have now a grand total of 4 stocks only, covered by put options and hyybrid I keep as I would a term deposit
But I am short via options on quite a few!!!!!
so fully divested and waiting for the fall
I had hundreds in different portfolios 6 months ago.
time will tell

 

[nulla nulla]

Watching a few videos tonight and joining the dots etc...i think a major correction is on the cards, actually thinking about a total liquidation of my holdings, the first time i have genuinely felt that way.

There is a genuine global equity's bubble fuelled by mostly the US stimulus and also other national stimulus's, its all artificial and bull**** and there's no where else for the markets to go when its eased...the start of the stimulus withdrawal cycle will lead to a major correction.

Just no other way to see it, fact is the stimulus will be eased at some point and fact is the markets will respond by falling as capital is withdrawn...looking for a longer term short.

Late May 2013 was our peak. We reduced our holdings to two shares and have traded the sideways patterns since June. Unfortunately some of the trade shares have slipped below our entry points. These are due to go ex-div this month so there is a prospect of them rallying enough for us to exit square or slightly in front. The alternative is to hold for the div and ride it out for a recovery. Problem with that option is the ex-div price fall will likely be savage and the recovery to the entry points could be a very long time coming (particularly with the prospect of tapering of quantative easing).

 

[TPI]

Watching a few videos tonight and joining the dots etc...i think a major correction is on the cards, actually thinking about a total liquidation of my holdings, the first time i have genuinely felt that way.

There is a genuine global equity's bubble fuelled by mostly the US stimulus and also other national stimulus's, its all artificial and bull**** and there's no where else for the markets to go when its eased...the start of the stimulus withdrawal cycle will lead to a major correction.

Just no other way to see it, fact is the stimulus will be eased at some point and fact is the markets will respond by falling as capital is withdrawn...looking for a longer term short.

If the stimulus is eased won't that be because the US economy is dong better?

So any market sell-off in the context of this is just due to short-term fears rather than long-term expectations?

 

[tech/a]

If the stimulus is eased won't that be because the US economy is dong better?

So any market sell-off in the context of this is just due to short-term fears rather than long-term expectations?

Damned if they do
Damned if they don't.
It's about servicing debt.
If they don't print money they can't service debt
If they don't service debt they default.

It's got to the point now where it's not good either way
It's become a realization that continued printing of money to pay debt
Cannot continue.

So slow bleeding or hemorrhaging.
Its not limited to the US either.
Eurozone and here in Aus have similar issues.

 

[McLovin]

Damned if they do
Damned if they don't.
It's about servicing debt.
If they don't print money they can't service debt
If they don't service debt they default.

It's got to the point now where it's not good either way
It's become a realization that continued printing of money to pay debt
Cannot continue.

So slow bleeding or hemorrhaging.
Its not limited to the US either.
Eurozone and here in Aus have similar issues.

¿Que?