Interdum stultus opportuna loquitur...

Thursday, October 06, 2005

OzRant: The Weakest Of Bouncelets... Then...

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Gaw-aw-lee, Sarjint. (That's my Gomer Pyle impersonation - which reflects the Bumpkin-like 'Shock and Awe' being experienced by nuffnuffs at the moment). 

Seems like it's only a week ago that the market was - according to professional nuffnuffs like Craig James - in no danger of a pullback because everything was just so tickety-boo that we should all be walking around in a constant state of orgasm. You know what I mean - the sort of irresponsible bullshit that brokerage whores are paid to say.

I've said it before - once media-types start blathering about how a market will keep heading in the same direction, it's time to get onto the other side of the boat. If brokerages are hiring anyone with a history in sales and marketing and paying sign-on bonuses, it's an even bigger signal.

Feel free to criticise me for calling a top too early... I can take it. I'm also not totally convinced that there's not a big bounce coming; the analyst in me says that the market is getting what it deserves, but the trader says that sentiment is getting stupidly panicky too early, and as such it's almost time for dumbass shorts to be taken to the cleaners. (I know of one dude who is definitely not a dumbass who shorted a couple million TLS after its div... with an average entry of about $4.12 - he had two days to close that position otherwise he took an absolute BATH... until today). 

Markets don't alway do what they ought to do when they ought to do it. Truth is though, eventually they do what they ought to do: that is, they eventually trend towards their fundamentals (in my parlance, their 'strong attractor'), while simultaneously taking as much money off the masses as possible. The strong attractor for the XAO is currently under 3500 - and if it got there tomorrow it would still be valued for weaker-than-expected returns for the next decade. Earnings have peaked, the global economy has peaked, and there's a good chance that from here a lot of stuff will go real shitful real quick.

Oh - for those who keep claiming that I'm only good on the bearish side (who obviously never read my research reports on Credit Corp, CVC BizVision, cBio, and a few others as well):  I kept meaning to remind you about Telstra... here's what I said on September 5th:

Wait until TLS goes ex-div (and the low-IQ half of the register thinks it's fallen another 20c, and sells), then start buying calls or the stock itself.

Well, TLS went ex the 20c special on September 26th (I made sure everyone who could read knew that, on September 15th) ; the day after that (i.e., when nuffnuffs saw the fall in the papers) it dipped to $4... and then rose 5% in 4 sessions. If you couldn't make money buying calls on a move that size with a 3-week lead time to get your watchlist sorted out (and pick the 'one level out of the money' calls that we love), I'm not sure what I can do to help you.

And sure, TLS has been sagging along with the rest of the market lo these two days. 

Here's why (I've said this before, but I don't mind repeating it)... Instos want Mum & Dad investors to be shit-scared of doing their dough on T3 - so that the instos can then step in and clean the plate. They did the same thing with Commonwealth Bank.

TLS will be a $6-$7 stock a year after T3 closes, in an otherwise disappointing market. Write that down (or print this out) and stick it to your fridge, boys and girls.

And of course today's modest buying bias in the SPI (as outlined yesterday) struck the required gold with the SPI-Spy e-mail alert at 10:30 a.m., which tagged the only (weak) counter-decline move of the whole session. As I have said before, all that we look for is the equivalent to a 1pt S&P move (which is the same as a 3pt SPI move)... that was achieved in about 2 minutes.

Major Market Indices

The broad market - the ASX All Ordinaries (XAO) - fell by 95.00 points (-2.11%), finishing at 4401.80 points. The index hit an intraday high of 4496.80 (4500-ish) and its low was 4401.1 (4400-ish).

Total volume traded on the ASX was 1.21 billion units, 5.7% above its 10-day average. Of the 484 stocks in the index, 326 fell while a paltry 49 managed a gain. Volume was tilted in favour of the losers by a staggering margin of 9.9:1, with 482.89million shares traded in losers while just 48.60million 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 96.20 points (-2.12%), finishing at 4447.30 points (4450-ish).

The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - fell by 48.50 points (-2.00%), finishing at 2380.30 points. Within the index members, not a single issue rose. ASX20 volume was 127.58m units - all of it in downside volume.

There were no winners in the big guns - for the second consecutive day. 

The following stocks made up the biggest percentage losers in the big-guns:
  • Our old mate Woodside Petroleum (WPL), -$1.510 (4.51%) to $32.000 on volume of 3.42m shares;
  • Alumina (AWC), -$0.21 (3.55%) to $5.70 on volume of 4.85m shares; and
  • BHP Billiton (BHP), -$0.69 (3.22%) to $20.76 on volume of 23.02m shares.
What was I saying about folks trying to ride "Yesterday's Idea" when WPL had its little bounce? Oh, yes... I said that they were stupid. How mean of me.

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 - got smacked even more worse than the big end of town, dropping  69.90 points (-2.69%), finishing at 2529.90 points. The major winners in the "pop-guns" were -

  • Globe International (GLB), +$0.010 (2.94%) to $0.350 on volume of 576,000 shares;
  • Lion Selection Group (LSG), +$0.025 (1.37%) to $1.845 on volume of 406,000 shares; and
  • Multiplex Group (MXG), +$0.040 (1.3%) to $3.110 on volume of 5.09m shares; and
  • Thakral Holdings Group (THG), +$0.010 (1.27%) to $0.800 on volume of 157,000 shares; and
  • Alesco Corporation (ALS), +$0.100 (1.23%) to $8.250 on volume of 380,000 shares.

The losingest-little-guys for the session were (in order of decline):

  • Emperor Mines (EMP), -$0.050 (16.67%) to $0.250 on volume of 110,000 shares;
  • Norwood Abbey (NAL), -$0.060 (10.43%) to $0.515 on volume of 766,000 shares; and
  • Lynas Corporation (LYC), -$0.015 (9.68%) to $0.140 on volume of 409,000 shares; and
  • Primelife Corporation (PLF), -$0.130 (9.03%) to $1.310 on volume of 446,000 shares; and
  • Coffey International (COF), -$0.290 (8.43%) to $3.150 on volume of 150,000 shares.
Index Changes
XAOAll Ordinaries4401.8-95-2.11%614.39m
XTLS&P/ASX 202380.3-48.5-2%127.58m
XFLS&P/ASX 504355.2-91.5-2.06%271.98m
XTOS&P/ASX 1003607.4-76.3-2.07%404.48m
XJOS&P/ASX 2004447.3-96.2-2.12%505.71m
XKOS&P/ASX 3004441.4-96.6-2.13%0
XMDS&P/ASX Mid-Cap 504431.2-97.4-2.15%0
XSOS&P/ASX Small Ordinaries2529.9-69.9-2.69%173.04m

All Ordinaries Market Internals

Market Breadth
Advancing Volume0m29.01m39.44m48.622.37264.81
Declining Volume127.58m338.67m411.01m482.89123.15850.49

S&P/ASX200 GICS Sector Indices

No sectors rose for the day. Youch.

The worst-performed sector today was XEJ Energy which lost 4.43% to 10089.30 points. The sector was dragged lower by pretty much everything in it (no Energy sector stocks rose for the session), but the big losers in percentage terms were 

  • Oil Search (OSH), -$0.260 (7.05%) to $3.430 on volume of 11.37m shares;
  • Roc Oil Company (ROC), -$0.180 (6.43%) to $2.620 on volume of 1.92m shares;
  • Worleyparsons (WOR), -$0.620 (6.21%) to $9.370 on volume of 1.73m shares;
  • Hardman Resources (HDR), -$0.130 (5.68%) to $2.160 on volume of 2.79m shares; and
  • Tap Oil (TAP), -$0.150 (5.66%) to $2.500 on volume of 2.02m shares.

Just in front of last place on the sector table was XMJ Materials which lost 3.18% to 8232.00 points. The sector was pulled down by

  • Adelaide Brighton (ABC), -$0.160 (7.34%) to $2.020 on volume of 626,000 shares;
  • Sims Group (SMS), -$1.300 (7.12%) to $16.950 on volume of 849,000 shares;
  • Portman (PMM), -$0.320 (6.57%) to $4.550 on volume of 98,000 shares;
  • CSR (CSR), -$0.190 (6.15%) to $2.900 on volume of 7.25m shares; and
  • Timbercorp (TIM), -$0.140 (6.03%) to $2.180 on volume of 1.68m shares.
Sector Indices
CodeGICS SectorClose+/-%Volume
XIJInformation Technology423.5-0.7-0.17%5.43m
XPJProperty Trusts1798.7-16.1-0.89%67.36m
XDJConsumer Discretionary2257.6-36.5-1.59%36.25m
XXJASX200 Financials ex Property Trusts5411.1-89.5-1.63%69.97m
XSJConsumer Staples5717.3-114.4-1.96%24.3m

All Ordinaries Major Movers

All Ords Volume Leaders
TLSTelstra Corporation4.07-0.08-1.93%41.4m
BHPBHP Billiton20.76-0.69-3.22%23.02m
MIGMacquarie Infrastructure Group3.67-0.2-5.17%20.8m
LHGLihir Gold1.80.031.69%15.99m
All Ords Percentage Gainers
OMIOccupational & Medical Innovations1.480.1813.85%86980
AGIAinsworth Game Technology0.60.058.18%157501
GLBGlobe International0.350.012.94%576234
AMLAmrad Corporation0.480.012.13%208188
All Ords Percentage Decliners
NALNorwood Abbey0.52-0.06-10.43%766131
LYCLynas Corporation0.14-0.02-9.68%408600
SMXSms Management & Technology1.87-0.19-9.22%114044
PLFPrimelife Corporation1.31-0.13-9.03%445823

Elsewhere in the Region...

Regional Indices
New ZealandNZSE503406.002-40.42-1.17%28m
JapanNikkei 22513359.51-330.38-2.41%0
SingaporeStraits Times2286.05-39.84-1.71%0
Hong KongHang Seng14909.55-251.48-1.66%236.9m
MalaysiaKLSE Comp925.94-1.57-0.17%0