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The market is significantly overbought on any sensible metric, and yet pullbacks are weak (and are usually accompanied by some attempt to rebounc during the same session. It's a time for shorts to be very selective, and to limit shorts to intraday 'scalping', picking up the odd 5-10-point run on the SPI but being ready to bail at the first hint of intraday oversold. It's also time to start nibbling short Nikkei and Hang Seng futures too.
We're due a pullback - well overdue, in fact. The fact that the indices have the bit between their teeth should not be a signal to join the consensus - this is about the time when the consensus gets overloaded. Plus, there are nascent signs of distribution... the "Smart Money at Work" signs are out.
It's not clear to me jsut what 'investors' are finding so attractive about stocks at present; yields are low, PEs are stretched pretty much all over the map, and there is a stinky smell emanating from the balance sheets of the major banks... (it's the smell of decomposing mortgages and HELOCs). Don't think for a minute that the banks have been more alert to the creditworthiness of their customers than other 'riskier' lenders like RAMS and other non-bank intermediaries: the banks have been chucking dough at property like it's going out of fashion. Try to think up a few good jokes about home equity cash-outs, because that's going to be something that people will be ashamed to admit to in a couple of years (just like nobody admits to having invested in Pyramid, nobody ever owned DavNet, nobody bought NCP at $20, nobody owned ONE... ).
Major Market Indices
The broad market - the ASX All Ordinaries (XAO) - fell by 16.40 points (-0.37%), finishing at 4429.90 points. The index hit an intraday high of 4446.30 (4450-ish - again) just after 2 p.m., after dipping to its low at 4425.6 (4425-ish...again), set just after 10:30 a.m. Sydney time.
So on a day with no news whatsoever (except wages growth, which was slightly above forecasts, but not by much), and with downbeat 'guidance' from overnight US markets, the All Ords stacked on a 20-point advance after early weakness. If that's not a sign of complacent confidence, I dunno what is.
It reminds me of the glassy-eyed certainty of neoTrot trash like Richard Perle - the sort of self-satisfied (and yet utterly ignorant) belief in one's righteousness... consequences be damned. It also reminds me of conversations in 2000 with ardent admirers of Rupert Murdoch and Jodee Rich.
The fact that distribution is occurring is increasingly obvious - every major 'round number' sees a little spike in volume sold; just beforehand there's a weensy flurry of SPI contracts sold at the bid. Simple enough - drop some SPI shorts, sell your stocks, generate some follow-on selling, and buy your SPI shorts back. Piece of piss, and nobody's the wiser that your institution just lightened up.
Total volume traded on the ASX was again a solid 1.10 billion units, 3.0% above its 10-day average. Of the 483 stocks in the index, 205 fell while 155 managed a gain. Volume was tilted in favour of the losers by a margin of 1.8:1, with 315.21million shares traded in losers while 179.82million shares traded in the day's gainers.
The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 (XJO) - fell by 13.30 points (-0.30%), finishing at 4467.90 points. It wandered around 4480 like a lost puppy, waiting to see if XAO could get through 4450.
The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - fell by 7.30 points (-0.30%), finishing at 2392.20 points. Within the index members, there were 9 that rose, and 11 losers. Total volume in rising issues within the ASX20 amounted to 39.54 while volume in the losers totalled 101.01m units.
The major winners in the "big guns" were -
- Australia And New Zealand Banking Group (ANZ), +$0.260 (1.17%) to $22.400 on volume of 5.02m shares;
- National Australia Bank (NAB), +$0.300 (0.96%) to $31.660 on volume of 5.69m shares;
- QBE Insurance Group (QBE), +$0.160 (0.94%) to $17.250 on volume of 6.55m shares;
- Westpac Banking Corporation (WBC), +$0.180 (0.9%) to $20.150 on volume of 7.31m shares; and
- Woolworths (WOW), +$0.100 (0.6%) to $16.700 on volume of 2.6m shares.
The following stocks made up the biggest percentage losers in the big-guns:
- Woodside Petroleum (WPL), -$1.08 (3.24%) to $32.30 on volume of 3.33m shares;
- Foster's Group (FGL), -$0.15 (2.59%) to $5.64 on volume of 17.3m shares; and
- BHP Billiton (BHP), -$0.35 (1.67%) to $20.55 on volume of 17.88m shares; and
- Rio Tinto (RIO), -$0.81 (1.54%) to $51.93 on volume of 2.65m shares; and
- News Corporation (NWSLV), -$0.34 (1.53%) to $21.81 on volume of 1.53m shares.
At the smaller end of the market's capitalisation scale, the ASX Small Ordinaries Index (XSO) - the only place where underexploited value exists with any regularity - fell by 8.60 points (-0.34%), finishing at 2535.20 points. The major winners in the "pop-guns" were -
- Antares Energy (AZZ), +$0.050 (9.62%) to $0.570 on volume of 1.22m shares;
- Dragon Mining (DRA), +$0.015 (7.89%) to $0.205 on volume of 3.02m shares; and
- Croesus Mining (CRS), +$0.020 (4.82%) to $0.435 on volume of 3.38m shares; and
- Chemeq (CMQ), +$0.060 (4.8%) to $1.310 on volume of 804,000 shares; and
- Perilya (PEM), +$0.035 (4.55%) to $0.805 on volume of 2.37m shares.
The losingest-little-guys for the session were (in order of decline):
- Spotless Group (SPT), -$0.450 (7.63%) to $5.450 on volume of 3.2m shares;
- Capral Aluminium (CAA), -$0.095 (5.07%) to $1.780 on volume of 23,000 shares; and
- Minara Resources (MRE), -$0.080 (4.44%) to $1.720 on volume of 2.5m shares; and
- Multiemedia (MUL), -$0.001 (4.35%) to $0.022 on volume of 7.27m shares; and
- Excel Coal (EXL), -$0.290 (3.56%) to $7.860 on volume of 482,000 shares.
| Index Changes | |||||
| Code | Name | Close | +/- | % | Volume |
| XAO | All Ordinaries | 4429.9 | -16.4 | -0.37% | 608.83m |
| XTL | S&P/ASX 20 | 2392.2 | -7.3 | -0.3% | 140.56m |
| XFL | S&P/ASX 50 | 4392.5 | -12.3 | -0.28% | 252.68m |
| XTO | S&P/ASX 100 | 3625.4 | -10.1 | -0.28% | 393.22m |
| XJO | S&P/ASX 200 | 4467.9 | -13.3 | -0.3% | 508.54m |
| XKO | S&P/ASX 300 | 4462.4 | -12.7 | -0.28% | 0 |
| XMD | S&P/ASX Mid-Cap 50 | 4364.8 | -11.6 | -0.27% | 0 |
| XSO | S&P/ASX Small Ordinaries | 2535.2 | -8.6 | -0.34% | 166.83m |
All Ordinaries Market Internals
| Market Breadth | ||||||
| ASX20 | XTO | XJO | XAO | XSO | Market | |
| Advances | 9 | 40 | 69 | 155 | 68 | 411 |
| Declines | 11 | 50 | 102 | 205 | 85 | 489 |
| Advancing Volume | 39.54m | 120.21m | 157.64m | 179.82 | 59.9 | 385.75 |
| Declining Volume | 101.01m | 232.03m | 278.92m | 315.21 | 65.97 | 433.04 |
S&P/ASX200 GICS Sector Indices
The top sector for the day was XXJ ASX200 Financials ex Property Trusts which gained 0.66% to 5345.30 points. The sector was helped by
- SFE Corporation (SFE), +$0.400 (3.52%) to $11.750 on volume of 435,000 shares;
- Promina Group (PMN), +$0.080 (1.56%) to $5.220 on volume of 5.04m shares;
- Axa Asia Pacific Holdings (AXA), +$0.070 (1.53%) to $4.650 on volume of 934,000 shares;
- Insurance Australia Group (IAG), +$0.090 (1.46%) to $6.250 on volume of 14.37m shares; and
- Tower (TWR), +$0.025 (1.36%) to $1.865 on volume of 266,000 shares.
Second in the sector leadership stakes was XFJ Financials which gained 0.55% to 5229.50 points. The sector leaders were the same as those that led the XXJ -
- SFE Corporation (SFE), +$0.400 (3.52%) to $11.750 on volume of 435,000 shares;
- Promina Group (PMN), +$0.080 (1.56%) to $5.220 on volume of 5.04m shares;
- Axa Asia Pacific Holdings (AXA), +$0.070 (1.53%) to $4.650 on volume of 934,000 shares;
- Insurance Australia Group (IAG), +$0.090 (1.46%) to $6.250 on volume of 14.37m shares; and
- Tower (TWR), +$0.025 (1.36%) to $1.865 on volume of 266,000 shares.
The bronze today went to XIJ Information Technology which gained 0.27% to 439.70 points. The sector was led by
- Computershare (CPU), +$0.070 (1.04%) to $6.770 on volume of 3.82m shares;
- MYOB (MYO), +$0.005 (0.43%) to $1.175 on volume of 293,000 shares;
- ERG (ERG), -$0.000 (0%) to $0.230 on volume of 325,000 shares;
- Infomedia Ltd (IFM), -$0.000 (0%) to $0.580 on volume of 283,000 shares; and
- Baycorp Advantage (BCA), -$0.010 (0.27%) to $3.750 on volume of 3.96m shares.
The worst-performed sector today was XEJ Energy which lost 1.88% to 10151.70 points. The sector was dragged lower by
- Woodside Petroleum (WPL), -$1.080 (3.24%) to $32.300 on volume of 3.33m shares;
- Tap Oil (TAP), -$0.060 (1.89%) to $3.120 on volume of 500,000 shares;
- Australian Worldwide Exploration (AWE), -$0.040 (1.72%) to $2.280 on volume of 980,000 shares;
- Hardman Resources (HDR), -$0.040 (1.61%) to $2.440 on volume of 2.06m shares; and
- Origin Energy (ORG), -$0.090 (1.2%) to $7.380 on volume of 2.44m shares.
Just in front of last place on the sector table was XTJ Telecommunications which lost 1.15% to 1720.90 pointsas Telstra softened again...
- Telstra Corporation (TLS), -$0.070 (1.44%) to $4.790 on volume of 38.03m shares; while
- Telecom Corporation Of New Zealand (TEL) rose, adding $0.020 (0.35%) to $5.700 on volume of 3.57m shares.
| Sector Indices | |||||
| Code | GICS Sector | Close | +/- | % | Volume |
| XXJ | ASX200 Financials ex Property Trusts | 5345.3 | 35.2 | 0.66% | 70.84m |
| XFJ | Financials | 5229.5 | 28.7 | 0.55% | 158.04m |
| XIJ | Information Technology | 439.7 | 1.2 | 0.27% | 8.95m |
| XPJ | Property Trusts | 1844.1 | 3 | 0.16% | 92.5m |
| XUJ | Utilities | 5066.8 | 6.3 | 0.12% | 4.41m |
| XHJ | Healthcare | 5456.8 | -5.7 | -0.1% | 7.53m |
| XDJ | Consumer Discretionary | 2321.3 | -14.6 | -0.63% | 33.16m |
| XSJ | Consumer Staples | 5817.4 | -39.7 | -0.68% | 57.61m |
| XNJ | Industrials | 5218.9 | -51.9 | -0.98% | 51.5m |
| XMJ | Materials | 8159.9 | -92.6 | -1.12% | 127.85m |
| XTJ | Telecommunications | 1720.9 | -20.1 | -1.15% | 41.6m |
| XEJ | Energy | 10151.7 | -194.4 | -1.88% | 18.94m |
All Ordinaries Major Movers
| All Ords Volume Leaders | |||||
| Code | Name | Close | +/- | % | Volume |
| CER | Centro Retail Group | 1.53 | 0.01 | 0.66% | 63.35m |
| TLS | Telstra Corporation | 4.79 | -0.07 | -1.44% | 38.03m |
| CPA | Commonwealth Property Office Fund | 1.28 | -0.05 | -3.76% | 21.67m |
| BHP | BHP Billiton | 20.55 | -0.35 | -1.67% | 17.88m |
| FGL | Foster's Group | 5.64 | -0.15 | -2.59% | 17.3m |
| OXR | Oxiana | 1.19 | 0.05 | 4.39% | 15.66m |
| All Ords Percentage Gainers | |||||
| Code | Name | Close | +/- | % | Volume |
| AZZ | Antares Energy | 0.57 | 0.05 | 9.62% | 1.22m |
| DRA | Dragon Mining | 0.21 | 0.02 | 7.89% | 3.02m |
| CRS | Croesus Mining | 0.44 | 0.02 | 4.82% | 3.38m |
| CMQ | Chemeq | 1.31 | 0.06 | 4.8% | 804088 |
| PEM | Perilya | 0.81 | 0.04 | 4.55% | 2.37m |
| All Ords Percentage Decliners | |||||
| Code | Name | Close | +/- | % | Volume |
| ETW | Evans & Tate | 0.3 | -0.03 | -7.69% | 1.37m |
| SPT | Spotless Group | 5.45 | -0.45 | -7.63% | 3.2m |
| OMI | Occupational & Medical Innovations | 0.75 | -0.06 | -6.88% | 162448 |
| MRE | Minara Resources | 1.72 | -0.08 | -4.44% | 2.5m |
| MLT | Milton Corporation | 17.01 | -0.79 | -4.44% | 8265 |
Elsewhere in the Region...
| Regional Indices | |||||
| Country | Name | Close | +/- | % | Volume |
| New Zealand | NZSE50 | 3378.144 | 21.2 | 0.63% | 42.17m |
| Japan | Nikkei 225 | 12273.12 | -42.55 | -0.35% | 0 |
| Korea | KOSPI | 1113.25 | -3.68 | -0.33% | 446876 |
| Singapore | Straits Times | 2287.16 | -18.14 | -0.79% | 0 |
| Hong Kong | Hang Seng | 15357.76 | -85.86 | -0.56% | 181.98m |
| Malaysia | KLSE Comp | 926.65 | 0.16 | 0.02% | 0 |
