On the back foot
11.11 am US tech stocks took another leg down overnight and carried the S&P 500 and the DJI with them. The picture of the US indices looks like a correction that's 75% done whereas the Aussie market seems to me to be 95% over.
Of my overnight large cap positions, the defensives in CYB and the two golds are pretty flat but the two more aggressive longs in BPT and GXY are harder hit with Galaxy 3.6% lower. I was a little too hopeful with this one because a choppy 5 wave correction is more common than a 3 wave one and the finish was making me nervous yesterday. However, I think it's quite a good buy today having done that. Any bounce in the market and it could reverse higher.
I do have a short position in AMP but it's also pretty flat, perhaps because the correction in US bonds is extending and the 10 year bond rate is below 2.8% now. I've been looking at this easing in rates for a couple of weeks but it's the first time I've really noticed much of an impact on our market with banks a slight outperformer and yield plays generally higher. It's the higher p/e stocks like A2M and BAL which are selling off as a proxy for US techs, I suppose.
The small caps are down but doing a little better than I expected mainly thanks to AC8 which is up a couple of cents on a Chilean medical approval for its cannabis products.
2.18 pm The ASX 200 is at 5791, a fall of 41 points on the day. It seems as if there is some clearing of the decks ahead of the Easter break with sharp falls in popular stocks.
I was thinking about the XJO correction being 95% complete. I'm looking at an index which is a fair way into the 5th wave of what I think will be a 5 wave fall. The first was from a high of 6150 to a low of 5992 in January. The second took it back up to 6121 by early February. The 3rd wave drove down from 6121 to a low of 5787 while the 4th was a narrowing pennant. My best guess is that the 5th wave started on March 19th, it is subdivided into the usual 5 minor waves and that we're currently in the 4th wave consolidation, perhaps for two or three more days, before a last push lower to complete the pattern. Maybe in points terms, we can test 5700, I think 5650 is a bit unlikely given the value that is emerging in the Australian market and the easing off in rates. I wouldn't be surprised if 5750 was enough. That would only be 41 points from here with the index already 360 points off the January high. Considering all that, maybe the correction is 85-90% in points terms. Also, it's about 55 trading days since the high and I expect it's, say, 4 to 8 days till we reach a low. That would make it roughly the same percentage in time completed, ie around 85-90%.
4.25 pm It's been a tough quarter and I'm looking forward to an end to the correction. The market finished back below the 5800 level at 5789. I sold the last of the CYB and RRL and got out of the RSG too along with the AMP short. I held the BPT and GXY as nothing really changed today regarding these two despite a hefty drop for each. I think it's more likely that we rally than fall tomorrow on the basis that the index is likely to do some work around here as described above.
The small caps gave back most of what they made yesterday. The only trade was to sell the last half of the ADR which eased back to 15.5.
Of my overnight large cap positions, the defensives in CYB and the two golds are pretty flat but the two more aggressive longs in BPT and GXY are harder hit with Galaxy 3.6% lower. I was a little too hopeful with this one because a choppy 5 wave correction is more common than a 3 wave one and the finish was making me nervous yesterday. However, I think it's quite a good buy today having done that. Any bounce in the market and it could reverse higher.
The small caps are down but doing a little better than I expected mainly thanks to AC8 which is up a couple of cents on a Chilean medical approval for its cannabis products.
2.18 pm The ASX 200 is at 5791, a fall of 41 points on the day. It seems as if there is some clearing of the decks ahead of the Easter break with sharp falls in popular stocks.
I was thinking about the XJO correction being 95% complete. I'm looking at an index which is a fair way into the 5th wave of what I think will be a 5 wave fall. The first was from a high of 6150 to a low of 5992 in January. The second took it back up to 6121 by early February. The 3rd wave drove down from 6121 to a low of 5787 while the 4th was a narrowing pennant. My best guess is that the 5th wave started on March 19th, it is subdivided into the usual 5 minor waves and that we're currently in the 4th wave consolidation, perhaps for two or three more days, before a last push lower to complete the pattern. Maybe in points terms, we can test 5700, I think 5650 is a bit unlikely given the value that is emerging in the Australian market and the easing off in rates. I wouldn't be surprised if 5750 was enough. That would only be 41 points from here with the index already 360 points off the January high. Considering all that, maybe the correction is 85-90% in points terms. Also, it's about 55 trading days since the high and I expect it's, say, 4 to 8 days till we reach a low. That would make it roughly the same percentage in time completed, ie around 85-90%.
4.25 pm It's been a tough quarter and I'm looking forward to an end to the correction. The market finished back below the 5800 level at 5789. I sold the last of the CYB and RRL and got out of the RSG too along with the AMP short. I held the BPT and GXY as nothing really changed today regarding these two despite a hefty drop for each. I think it's more likely that we rally than fall tomorrow on the basis that the index is likely to do some work around here as described above.
The small caps gave back most of what they made yesterday. The only trade was to sell the last half of the ADR which eased back to 15.5.
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