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XAO Technical Analysis

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Re: XAO Analysis

Trade_It said:
Sassa I think the weakness on our markets was due to the CPI data that was released today.

maybe another pre election rate rise coming, why i think it was due to this the aud shot up and the euro did nothing against the usd they normally move in tan dame but a rate rise here does nothing for the euro.
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It took a while to react.The Nikkei has been tumbling faster.
 
Re: XAO Analysis

Trade_It said:
Sassa I think the weakness on our markets was due to the CPI data that was released today.

maybe another pre election rate rise coming, why i think it was due to this the aud shot up and the euro did nothing against the usd they normally move in tan dame but a rate rise here does nothing for the euro.
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See, I was thinking that as well ; but surely Australian news doesn't effect Australian stocks. We only follow the US! :D

Obviously I'm being sarcastic.

But, haven't the prospects of another rate rise already been discussed / thought of? Would have thought the idea of increased inflation wasn't new :confused:

Whatever happened to putting a positive spin on bad news!
 
Re: XAO Analysis

Whatever is causing it, momentum has definitely turned this afternoon. Agree that a red day in the US could lead to further sell-offs tomorrow. Singapore and Hong Kong indices also falling off a cliff at the moment. :eek:
 
Re: XAO Analysis

rub92me said:
Whatever is causing it, momentum has definitely turned this afternoon. Agree that a red day in the US could lead to further sell-offs tomorrow. Singapore and Hong Kong indices also falling off a cliff at the moment. :eek:
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Seems as if our short-term fate is once again in the hands of Wallstreet, definitely seems to be happening a lot lately.

I'm glad the market's finally closing now; hopefully a good nights rest (coupled with a hopefully green day in the US :D) will restore some faith!
 
Re: XAO Analysis

sassa said:
What's causing the sharp selloff in the XJO and Nikkei?
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May have something to do with it?? ;)
Cheers
...........Kauri

Traders are seeing good selling of the AUD/JPY and NZD/JPY by US funds ahead of some event risk in the US later today. The AUD/JPY has slumped below 103.00 after trading up to 103.85 earlier while the AUD/USD has fallen below the pre-CPI level around 0.8995. The market was long the AUD/USD before the Aus CPI and went longer after the number increased speculation that the RBA would hike rates on November 6. Longs are unwinding due to concerns that the rally on Wall Street this week will come to a thumping halt after Merrill"s releases their quarterly profit, which is expected to be a shocker and US Existing Home Sales reminds everyone how bad the state of the US housing market is.
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Carry trades remains under pressure as early London traders enter
the market. Chatter over Merrill Lynch's Q3 earnings, due for release later
today is all the rage. Newspaper articles are putting the debt losses anywhere
between 6-14bln, much higher than Merrill"s previously indicated loss of $5bln.
Stock markets around the region have given up all of their earlier strong gains
and most now are well into the red. Whilst it may be a classic case of sell the
rumour, buy the fact, traders in the Asian time zone have basically squared
their positions believing the risk is too great after the negative reaction to B
of A results last week.
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Re: XAO Analysis

Wednesday was always building as a potential red day in New York with more lousy housing data due, homebuilder earnings and an awful earnings report from MER expected.

As for the weakness today in the ASX, some of it may be due to S&P contemplating downgrading a bunch of Australian and New Zealand MBS as well as the higher than expected CPI number.

Standard & Poor's may cut the credit ratings of 207 Australian and New Zealand residential mortgage- backed securities as turmoil in the U.S. subprime market spreads to home-loan insurers.

It's the first time in five years S&P has put securities backed by Australian and New Zealand mortgages on negative ``creditwatch,'' said Kate Thomson, an analyst at S&P in Melbourne, said today. Placing the bonds on Creditwatch negative, which means a rating cut is possible within 90 days, may drive yields on the debt higher.

S&P lowered ratings on about $50 billion of U.S. securities last week amid criticism from investors and lawmakers for downplaying the risk of subprime bonds. The ratings service said Oct. 19 it may lower the credit rating of PMI Group Inc. and its Australian unit after the second-largest U.S. mortgage insurer posted a $350 million third-quarter loss as defaults increased.

``Australian notes will definitely be affected in both the primary and secondary market and some new issues will price higher as a direct result,'' said Warren Mellor, structured credit analyst at National Australia Bank Ltd. in Melbourne.

Mortgage-backed bond sellers are already offering higher yields on securities to entice buyers back to a market that stalled in August after BNP Paribas SA, France's largest bank, followed Bear Stearns Cos. in freezing withdrawals from hedge funds, triggering a liquidity crunch in the global credit markets.

Australian lenders including Calibre Financial Ltd. and FirstMac Ltd. last week sold mortgage-backed bonds at yields more than double the rate of previous sales, according to data compiled by Bloomberg.

PMI Rating Watch

Sydney-based PMI Mortgage Insurance Ltd. has the third- highest investment grade rating of AA and is one of the two largest insurers of Australian home loans used to secure bonds. The 207 home loan-backed bonds that may be cut are also rated AA and some were created as recently as this month.

Almost all of the mortgage-backed bonds with ratings below the top AAA level monitored by National Australia Bank are at least partly backed by home loans insured by PMI Mortgage, Mellor said.

``We are seeing an entire product range being affected by PMI and the impact on our domestic market is a direct consequence of the company's business in the U.S.,'' Mellor said.
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Re: XAO Analysis

This is the cause of the loss.

Asian exporter shares fell, erasing early gains, after the New York Times reported Merrill Lynch & Co. will probably add $2.5 billion more in writedowns in the wake of the U.S. subprime mortgage crisis.

Pls look at the news.

Another RED day tomorrow.

Cheers
 
Re: XAO Analysis

qr2007 said:
This is the cause of the loss.

Asian exporter shares fell, erasing early gains, after the New York Times reported Merrill Lynch & Co. will probably add $2.5 billion more in writedowns in the wake of the U.S. subprime mortgage crisis.

Pls look at the news.

Another RED day tomorrow.

Cheers
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Could this have an affect also.These comments come from a contributor to MarketWatch.
(1)The Libor rate has jumped 64 basis points.This rate is now roughly the level that set off the credit crisis that prompted a liquidity rescue in August.
(2)The iTraxx Crossover Index that measures spreads on corporate bonds has jumped a 100 basis points since last week.Peter Berezin,a strategist at Goldman Sach,said investors have been shaken by last week's drop in the home builders' sentiment and by fresh falls in the ABX index,which is 80% below par,for sub prime debt.Sell offs in the ABX and housing related credit have to be well respected as they point to HUGE losses that have yet to surface.
We are about to possibly see one of many today.
 
Re: XAO Analysis

US really havent got their house in order..

All these raw materials denominated in USD, are going up (soft commodities, metals, precious metals, oil etc etc). Sooner or later this is going to impact corporate earnings.. US corporations are in no place to pass on those costs to consumers, who are already suffering from higher credit and housing downturn, together with potentially worsening job market ... Add to that US is a net importer and China the net exporter.. China is also going to get affected by increasing costs, due to its currency partially pegged to USD, and everything being in USD making them more expensive ... This will result in increased import prices for US consumers... Not looking good at all.. The lowering of rates is going to strangle the US, although at a later time than not intervening..

If USD was not the reserve currency it would be suffering the fate of Argentina or if it kept printing money Zimbabwe..
 
Re: XAO Analysis

qr2007 said:
This is the cause of the loss.

Asian exporter shares fell, erasing early gains, after the New York Times reported Merrill Lynch & Co. will probably add $2.5 billion more in writedowns in the wake of the U.S. subprime mortgage crisis.

Pls look at the news.

Another RED day tomorrow.

Cheers
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gr,

I hope you don't believe everything you read in the news just because Bloomberg or CNN reported it. Financial commentators often invent reasons to explain why markets rise and fall. These reasons often appeal to the rational mind as we try to make sense of an irrational mechanism such as the stockmarket.

I'm not saying the the story you quoted is wrong, but don't be so quick to believe whatever the press presents as truth.
 
Re: XAO Analysis

dhukka said:
gr,

I hope you don't believe everything you read in the news just because Bloomberg or CNN reported it. Financial commentators often invent reasons to explain why markets rise and fall. These reasons often appeal to the rational mind as we try to make sense of an irrational mechanism such as the stockmarket.

I'm not saying the the story you quoted is wrong, but don't be so quick to believe whatever the press presents as truth.
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Thank you
I will keep it in my mind.
 
Re: XAO Analysis

trendsta said:
China is also going to get affected by increasing costs, due to its currency partially pegged to USD, and everything being in USD making them more expensive
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Interesting what Warren Buffett said about Chinese stocks today-

Oct. 24 (Bloomberg) -- Billionaire Warren Buffett said investors should be ``cautious'' about China's stocks after the country's benchmark index more than doubled this year.

``We never buy stocks when we see prices soaring,'' Buffett said today in Dalian, northeastern China, where he's visiting a subsidiary of his Berkshire Hathaway Inc. ``We buy stocks because we're confident of the company's growth. People should be cautious when they see prices rising.''

It reminded me of an old hotel broker friend of mine."If you're going to buy a hotel,don't buy one that is a succes.Get one that needs building up.You buy it cheap and enjoy the windfall when you sell it."
 
Re: XAO Analysis

sassa said:
Interesting what Warren Buffett said about Chinese stocks today-

Oct. 24 (Bloomberg) -- Billionaire Warren Buffett said investors should be ``cautious'' about China's stocks after the country's benchmark index more than doubled this year.

``We never buy stocks when we see prices soaring,'' Buffett said today in Dalian, northeastern China, where he's visiting a subsidiary of his Berkshire Hathaway Inc. ``We buy stocks because we're confident of the company's growth. People should be cautious when they see prices rising.''

It reminded me of an old hotel broker friend of mine."If you're going to buy a hotel,don't buy one that is a succes.Get one that needs building up.You buy it cheap and enjoy the windfall when you sell it."
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Im not surprised.. Buffet invested in petrochina way back, made his money, and is out .. If recent rumors are true he is buying into Brazil ..

The current events are only leading to devaluation of currency.. maybe its a political play to see who backs off first US or China .. US has always wanted China to unpeg its currency.. various negotiations didnt work, maybe this little trick will ??

This little ploy is creating massive imbalances and bubbles... something / anything can trigger it off ..
 
Re: XAO Analysis

trendsta said:
The current events are only leading to devaluation of currency.. maybe its a political play to see who backs off first US or China .. US has always wanted China to unpeg its currency.. various negotiations didnt work, maybe this little trick will ??

..
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What devaluation are you referring to, the USD?

Cheers,
 
Re: XAO Analysis

CanOz said:
What devaluation are you referring to, the USD?

Cheers,
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yup the USD...
Its not so much all these things are rising, its more that USD is falling .. If the store of value is falling, and losing its base value, then its not performing the function for which it was invented (maybe im being too drastic here) ...

point being there is only so much value it can lose before people lose confidence in it .. after all its only a piece of paper with george washingtons picture.. its only saving grace is that over the many decades the rest of the world has decided to use it as its reserve currency.

overall a rising inflation (despite the "official US CPI numbers) and slowing economy does not bode well ..
 
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