6th time is a charm
12.30 pm The index failed to hold 5900 after the 6th test of the level and is now down 2% at 5821 on an escalation of the trade war fears. It's been a bugger for my large cap book because resource stocks have borne the brunt of the selling with MIN and S32 both down close to 6%. I thought these two looked good yesterday and if the market had been fairly flat I expect they would have done well. However, the sword of Damocles has been hanging over the market for a couple of weeks now and though it's been a case of trying to go about my business in the usual way, I've been expecting something like this and at least the air will be clearer soon. I expect the fall to continue and we're at the first support level now and the next level would be around 5750.
I've sold out of AWC, BPT, ORE and STO for only minor damage and RSG is one of the few gainers on the day.
It's been a similar story in the small caps as you'd expect on a day like this with all positions a bit lower although there are no major problems.
1.39 pm Looking at the XJO chart, it's a clear break and the best thing is to stand aside and wait for a low. I can't see the current levels holding even though there was support here in early February. I'm comfortable that the Australian market is decent value here, that the trade concerns are overstated and may well end up with the less open economies (China, EU) making concessions and that markets - perhaps with the exception of the US - are close to the bottom but things will generally overshoot and momentum is clearly to the downside.
4.32 pm There wasn't much change in the index between 2 and 4 pm and the final figure was a close of 5821, down 116 points or 2%. I expect further weakness now that the pennant has broken so I got out of all my large cap longs except for Resolute which was up 4 to 127, benefitting from safe haven buying. There has also been a flight to safety via bonds with the US 10 year bond dropping about 15 bp from its intraday high on the FOMC meeting so I also closed the shorts in SCG and SYD. I thought about some new shorts but it's pretty hard to chase them after big falls so I'll wait till the dust settles.
On days like this, when it's almost a certainty that I'll have a poor day, I tend to overtrade and try to get something back. If I had done nothing until the close, I would have been better off to the point that my book would have still lost but it would have been less than the gain yesterday. Not a bad result given I was long on a minor down day yesterday and again on a major one today. This is by no means the first time it has happened and I would like to change the pattern of behaviour.
It wasn't a terrible week for the large caps, down less than 1% on a close to 3% market fall. If I'd left my overnight positions alone intraday, the result would have been positive.
The small caps also lost on the week with today tipping the balance. These stocks can bounce back quickly though and I usually have longer holding times. I bought some Silver Lake Resources at 38.5 on the match. It's a small gold producer and resumed a rally after a 2 month correction. It looks reasonably good although a big bounce in the market would probably see the golds sell off again. However there's good support around 35 so the downside is limited.
I've sold out of AWC, BPT, ORE and STO for only minor damage and RSG is one of the few gainers on the day.
It's been a similar story in the small caps as you'd expect on a day like this with all positions a bit lower although there are no major problems.
1.39 pm Looking at the XJO chart, it's a clear break and the best thing is to stand aside and wait for a low. I can't see the current levels holding even though there was support here in early February. I'm comfortable that the Australian market is decent value here, that the trade concerns are overstated and may well end up with the less open economies (China, EU) making concessions and that markets - perhaps with the exception of the US - are close to the bottom but things will generally overshoot and momentum is clearly to the downside.
4.32 pm There wasn't much change in the index between 2 and 4 pm and the final figure was a close of 5821, down 116 points or 2%. I expect further weakness now that the pennant has broken so I got out of all my large cap longs except for Resolute which was up 4 to 127, benefitting from safe haven buying. There has also been a flight to safety via bonds with the US 10 year bond dropping about 15 bp from its intraday high on the FOMC meeting so I also closed the shorts in SCG and SYD. I thought about some new shorts but it's pretty hard to chase them after big falls so I'll wait till the dust settles.
On days like this, when it's almost a certainty that I'll have a poor day, I tend to overtrade and try to get something back. If I had done nothing until the close, I would have been better off to the point that my book would have still lost but it would have been less than the gain yesterday. Not a bad result given I was long on a minor down day yesterday and again on a major one today. This is by no means the first time it has happened and I would like to change the pattern of behaviour.
It wasn't a terrible week for the large caps, down less than 1% on a close to 3% market fall. If I'd left my overnight positions alone intraday, the result would have been positive.
The small caps also lost on the week with today tipping the balance. These stocks can bounce back quickly though and I usually have longer holding times. I bought some Silver Lake Resources at 38.5 on the match. It's a small gold producer and resumed a rally after a 2 month correction. It looks reasonably good although a big bounce in the market would probably see the golds sell off again. However there's good support around 35 so the downside is limited.
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