Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.
Today's action was a poignant reminder of why having a set target is important for swing traders. I had expected early weakness, for abut a half an hour - and then I expected da Boyz (or the Australian variant thereof) to take late shorts to the cleaners.
I said as much in an e-mail to a correspondent - to wit:
...Monday will be an up day, possibly after about half an hour of weakness. Buy SPI at 10:25 a.m. Sydney time, targetting a 10-point gain on the first contract then moving stops to break even for any other units. Exit all remaining long positions at the close.
Well, that first contract got its target easily, but everything else - having been as much as 20 points in the green - wound up being stopped out for no gain.
In any case, it is not relevant for those on the SPISpy list because I didn't send out a trigger (so the 10-point gain on contract 1 doesn't go into the record, nor does it count toward the test of profitability that determines whether subscriptions for the month are refunded).
But on to more interesting stuff... let's talk politics.
At the moment, the parasite classes in both Europe and North America are falling over themselves trying to exculpate themselves from the foreseeable consequences of stupid policies that arose in response to the politician's tendency to need to be seen to be doing something.
In Europe, the EU Kommissars are claiming that the rise in world grain prices is all the fault of speculators, not their stupid target of 10% biofuel by 2020 (that would require 70% of EU-zone arable land to be diverted to biofuel production). Someone ought to point out to them that you can't speculate in Onions, which are the most volatile foodstuff in terms of price.
Nobody amongst the court economists, pointed out that this would make biofuel production a (subsidised) competing intermediate demand for grain. In fact, EU states were triple-counting land, pretending it could be used for biofuel AND food crop production. They did this in order to make their plan appear workable on paper when it started to become clear that it was a dud. {Ignore the fact that biofuels produce MORE CO2 than petroleum... CO2 is irrelevant, because Global Warming is just the 2000's version of Y2K; if [some folks on an island] can't move fast enough to get out of the road of putative rising sea levels where the rise is measured in inches per decade, then evolution has passed them by. Plus, the planet is no hotter now than in the 1980s. Plus, hotter equals BETTER... more abundant crops, for a starter. A colder planet would suck big time and loads of people would DIE.}
So that's Europe;s political class... trying like blazes to avoid reaping the consequences of their stupidity.
In the US, the government is stitching together a plan to save Fannie Mae and Freddie Mac from oblivion; these two behemoths were the driving force behind a system so drenched in moral hazard that it will probably be the 2010's textbook example.
Fannie and Freddie began life because some hare-brained suckler-at-the-public-teat decided that the financial system couldn't properly determine risk; specifically, the financial system was not lending enough money (at the prevailing interest rate) to folks who looked like they didn't have enough money to pay back a mortgage.
The aforementioned politicians thought the knew that Houses Are A Good Thing, and thus that Everybody Should Have One. So they invented a GSE which basically helped extend credit to those who would not otherwise qualify.
Now - leave aside that if the bank holds title to a house and someone makes payments on that mortgage, the person making the payments does NOT own the house. The BANK is the owner in fee simple, and remain so until the mortgage is repaid. The person making the payments owns some proportion of the house, is all.
Still, the nesting instinct makes people FEEL as if the house is theirs. They mow the lawns and put in new kitchens, and so forth, and until recently boast about how clever they are since they bought the house for X and now it's worth Y (Y>X).
Leave aside that Y is the average of prices in their area, and includes a load of houses that have had Z spent on said new kitchens, bathrooms, pools and so on... where Z is some fairly significant proportion of (Y-X).
{What I am saying here, Dearest Reader, is that the overwhelming bulk of late-stage price appreciation in western housing markets was NOT increase in underlying value - it was simply a reflection of massive improvements undertaken by people paying off mortgages... if you buy a house for $100k and spend $20k on improvements, and sell it for $115k, you have not made any money, but home prices in your suburb show a 15% increase...}Major Market Indices
The broad market - the All Ordinaries (XAO) - dipped reasonably hard, registering a loss of 59.9 points (1.18%), finishing at 5007.9 points. The index hit an opened at 5067.8 at 10:00 am, which registers as its intraday high. However the traded intraday high was 5056 at 11:55 a.m. Sydney time. Thereafter it was saggy and depressing... the low for the day was 4995.6 - set at 2:53 pm Sydney time - before a little push back up above 200 Pickens (5000). Maybe they're Marchesanis this time - a player who showed a lot of promise in the Amateurs, but when given Jezza's number by Carlton he proved a dud.
Total volume traded on the ASX was 1.41 billion units, its 10-day average. The ASX's daily listing of all stocks included 1375 different 3-letter FPO's which traded (i.e., had non-zero trade volume). Of these, 590 issues rose, with volume in rising issues totalling 755.5 million units. Conversely (or even contrariwise), 486 stocks fell, with aggregate volume traded of 539.8 million shares. So again, advance-decline and AD volume stats do not inicate any sort of washout in the broadest measures. Folks still think they ought to be able to 'rotate' their way out of this - selling big-caps and Financials and buying small-caps (and Resources if the US goes up).
Of the 495 All Ordinaries components, 125 rose while 313 fell. Volume was tilted in favour of the losers by a margin of 1.5:1, with 281.46 million shares traded in gainers while 422.74 million shares traded in the day's losers.
The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 (XJO) - registered a loss of 58.9 points (1.18%), closing out the session at 4921 points.
| Name | Close | +/-(%) |
|---|---|---|
| All Ordinaries | 5007.90 | -59.90 (1.2%) |
| ASX 50 | 4818.00 | -64.70 (1.3%) |
| ASX 200 | 4921.00 | -58.90 (1.2%) |
| ASX 300 | 4920.20 | -58.40 (1.2%) |
| ASX Mid-Cap 50 | 4833.80 | -23.20 (0.5%) |
| ASX Small Ordinaries | 2872.40 | -25.40 (0.9%) |
| ASX 20 | 2762.90 | -38.40 (1.4%) |
| ASX 100 | 3982.70 | -48.70 (1.2%) |
The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - registered a loss of 38.4 points (1.37%), closing out the session at 2762.9 points.
Among the 20 big guns, 2 index components finished to the upside, and of the rest, 17 closed lower for the session. The 20 stocks which make up the index traded a total of 120.06 million units; rising volume totalled 10.39 million shares, and volume in decliners summed to 108.7 million units. The major percentage gainers within the index were
- Macquarie Group Limited (MQG), +$0.56 (1.14%) to $49.71 on volume of 1.8 million shares; and
- Westpac Banking Corporation (WBC), +$0.21 (1.1%) to $19.22 on volume of 8.6 million shares.
On the less salubrious side of the big-cap fence, the following stocks were the worst-performed within the index:
- Stockland (SGP), -$0.36 (7.89%) to $4.20 on volume of 10 million shares;
- Suncorp-Metway Limited. (SUN), -$0.5 (3.94%) to $12.20 on volume of 2 million shares;
- Telstra Corporation Limited. (TLS), -$0.15 (3.37%) to $4.30 on volume of 38.7 million shares;
- National Australia Bank Limited (NAB), -$0.92 (3.35%) to $26.53 on volume of 8.6 million shares; and
- Qbe Insurance Group Limited (QBE), -$0.43 (1.96%) to $21.50 on volume of 2.4 million shares.
At the other end of the market-cap spectrum lie the denizens of the ASX Small Ordinaries (XSO) - the place where non-mania excess returns lie. The small end of the market , while still dropping overall, did significantly better than its large-cap counterpart. The Small Ords slid modestly, falling 25.4 points (0.88%), closing out the session at 2872.4 points.
Among the stocks that make up the Small Caps index, 57 index components finished to the upside, and of the rest, 124 closed lower for the session.
The 195 stocks which make up the index traded a total of 206.63 million units: volume in the 57 gainers totalling 97.71 million shares, with trade totalling 101.13 million units in the index's 124 declining components. The major percentage gainers within the index were- Australian Infrastructure Fund (AIX), +$0.29 (14.72%) to $2.26 on volume of 1.3 million shares;
- St Barbara Limited (SBM), +$0.03 (10.71%) to $0.31 on volume of 22.3 million shares;
- Ausenco Limited (AAX), +$1.04 (8.12%) to $13.84 on volume of 264.7 thousand shares;
- Resolute Mining Limited (RSG), +$0.12 (7.64%) to $1.69 on volume of 173.7 thousand shares; and
- Paperlinx Limited (PPX), +$0.12 (7.5%) to $1.72 on volume of 1.6 million shares.
In the red-zone of the little-stock index, the following list represents the biggest downers (in terms of percentage decline):
- Charter Hall Group (CHC), -$0.12 (13.45%) to $0.74 on volume of 482.2 thousand shares;
- Record Realty (RRT), -$0.01 (13.04%) to $0.04 on volume of 516.6 thousand shares;
- Mincor Resources NL (MCR), -$0.25 (9.29%) to $2.44 on volume of 1.5 million shares;
- Panoramic Resources Limited (PAN), -$0.28 (9.03%) to $2.82 on volume of 925.7 thousand shares; and
- Mintails Limited (MLI), -$0.02 (8.7%) to $0.21 on volume of 354.6 thousand shares.
Index Changes
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XAO | All Ordinaries | 5007.9 | -59.9 | -1.18 | 741.5m |
| XFL | ASX 50 | 4818 | -64.7 | -1.33 | 278.1m |
| XJO | ASX 200 | 4921 | -58.9 | -1.18 | 604.6m |
| XKO | ASX 300 | 4920.2 | -58.4 | -1.17 | 652.1m |
| XMD | ASX Mid-Cap 50 | 4833.8 | -23.2 | -0.48 | 167.3m |
| XSO | ASX Small Ordinaries | 2872.4 | -25.4 | -0.88 | 206.6m |
| XTL | ASX 20 | 2762.9 | -38.4 | -1.37 | 120.1m |
| XTO | ASX 100 | 3982.7 | -48.7 | -1.21 | 445.5m |
Market Breadth
| ASX20 | XTO | XJO | XAO | XSO | Market | |
|---|---|---|---|---|---|---|
| Advances | 2 | 24 | 54 | 125 | 57 | 590 |
| Declines | 17 | 74 | 142 | 313 | 124 | 486 |
| Advancing Volume | 10.4m | 156m | 240.9m | 281.5m | 97.7m | 755.5 million |
| Declining Volume | 108.7m | 287m | 361m | 422.7m | 101.1m | 539.8 million |
GICS Industry Indices
Among the 11 industry indices, 2 registered an advance for the session, the remaining 9 lost ground.
The best performing index was Information Technology (XIJ), which added 11.9 points (2.47%) to 493.1 points. The 2 stocks which make up the index traded a total of 1.62 million units; The lone rising index component had volume amounting to 1.45 million shares, while sole declining stock traded 0.17 million units. The major percentage gainers within the index were
- Computershare Limited (CPU), +$0.26 (3.11%) to $8.61 on volume of 1.5 million shares.
Second in the index leadership stakes was Industrials (XNJ), which gained 1.6 points (0.04%) to 4462.7 points. The 31 stocks which make up the index traded a total of 83.94 million units; 11 index components rose, with rising volume amounting to 55.25 million shares, while the 20 decliners had volume traded totalling 28.69 million units. The major percentage gainers within the index were
- Australian Infrastructure Fund (AIX), +$0.29 (14.72%) to $2.26 on volume of 1.3 million shares;
- Ausenco Limited (AAX), +$1.04 (8.12%) to $13.84 on volume of 264.7 thousand shares;
- Macquarie Airports (MAP), +$0.19 (7.63%) to $2.68 on volume of 11 million shares;
- Macquarie Infrastructure Group (MIG), +$0.10 (4.55%) to $2.30 on volume of 17 million shares; and
- Macmahon Holdings Limited (MAH), +$0.07 (4.1%) to $1.65 on volume of 5 million shares.
The worst-performed index for the session was Telecommunications (XTJ), which dipped 52.7 points (3.46%) to 1469.1 points. The 3 stocks which make up the index traded a total of 42.16 million units; The 3 decliners had volume traded totalling 42.16 million units, and volume in the lone rising index component was 0 million shares, The major percentage decliners within the index were
- Telstra Corporation Limited. (TLS), -$0.15 (3.37%) to $4.30 on volume of 38.7 million shares;
- Telecom Corporation Of New Zealand Limited (TEL), -$0.08 (2.96%) to $2.62 on volume of 3 million shares; and
- Singapore Telecommunications Limited. (SGT), -$0.05 (1.85%) to $2.65 on volume of 376.4 thousand shares.
Just missing out on the wooden spoon was Property Trusts (XPJ), which slid 40.6 points (3.25%) to 1208.9 points. The 21 stocks which make up the index traded a total of 143.72 million units; The 15 decliners had volume traded totalling 100.98 million units, and 6 index components rose, with rising volume amounting to 42.74 million shares, The major percentage decliners within the index were
- Goodman Group (GMG), -$0.23 (8.71%) to $2.41 on volume of 10.7 million shares;
- Stockland (SGP), -$0.36 (7.89%) to $4.20 on volume of 10 million shares;
- Centro Retail (CER), -$0.03 (7.58%) to $0.31 on volume of 5.1 million shares;
- ING Industrial Fund (IIF), -$0.08 (6.02%) to $1.25 on volume of 8.1 million shares; and
- Mirvac Group (MGR), -$0.11 (5.21%) to $2.00 on volume of 9.4 million shares.
Third-to-last amongst the sector indices was Consumer Discretionary (XDJ), which slid 26.2 points (1.64%) to 1571.5 points. The 25 stocks which make up the index traded a total of 32.95 million units; The 19 decliners had volume traded totalling 22.14 million units, and 6 index components rose, with rising volume amounting to 10.82 million shares, The major percentage decliners within the index were
- Aristocrat Leisure Limited (ALL), -$0.37 (5.67%) to $6.16 on volume of 4.6 million shares;
- APN News & Media Limited (APN), -$0.19 (5.51%) to $3.26 on volume of 817.7 thousand shares;
- Consolidated Media Holdings Limited (CMJ), -$0.17 (5.43%) to $2.96 on volume of 1.6 million shares;
- Macquarie Media Group (MMG), -$0.12 (3.76%) to $3.07 on volume of 310.4 thousand shares; and
- Seven Network Limited (SEV), -$0.29 (3.59%) to $7.78 on volume of 253.6 thousand shares.
Sector Indices
| Code | GICS Sector | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XIJ | Information Technology | 493.1 | 11.9 | 2.47 | 2m |
| XNJ | Industrials | 4462.7 | 1.6 | 0.04 | 84m |
| XEJ | Energy | 18272.8 | -2.7 | -0.01 | 27m |
| XUJ | Utilities | 5330.8 | -7.1 | -0.13 | 25m |
| XMJ | Materials | 14348.4 | -140 | -0.97 | 143m |
| XHJ | Healthcare | 8141.4 | -98.3 | -1.19 | 7m |
| XSJ | Consumer Staples | 6726.6 | -81 | -1.19 | 25m |
| XXJ | Financials ex Property Trusts | 4759.5 | -59 | -1.22 | 74m |
| XDJ | Consumer Discretionary | 1571.5 | -26.2 | -1.64 | 33m |
| XPJ | Property Trusts | 1208.9 | -40.6 | -3.25 | 144m |
| XTJ | Telecommunications | 1469.1 | -52.7 | -3.46 | 42m |
All Ordinaries Major Movers
All Ords Volume Leaders
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| TLS | Telstra Corporation Limited. | 4.30 | -0.15 | -3.37 | 38.7m |
| OXR | Oxiana Limited | 2.27 | 0.06 | 2.71 | 25m |
| IPN | Independent Practitioner Network Limited | 0.26 | 0.00 | 0 | 24m |
| LGL | Lihir Gold Limited | 3.33 | 0.10 | 3.1 | 22.6m |
| SBM | St Barbara Limited | 0.31 | 0.03 | 10.71 | 22.3m |
All Ords Percentage Gainers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| AIX | Australian Infrastructure Fund | 2.26 | 0.29 | 14.72 | 1.3m |
| GPM | GEO Property Group | 0.23 | 0.03 | 12.5 | 553k |
| SBM | St Barbara Limited | 0.31 | 0.03 | 10.71 | 22.3m |
| TRY | Troy Resources NL | 1.85 | 0.15 | 8.82 | 127.1k |
| CPR | Clive Peeters Limited | 0.52 | 0.04 | 8.33 | 0.6k |
All Ords Percentage Losers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| CWP | Cedar Woods Properties Limited | 2.15 | -0.45 | -17.31 | 32.1k |
| CUS | Customers Limited | 0.07 | -0.01 | -15.66 | 441.1k |
| MRZ | Mirvac Real Estate Investment Trust | 0.43 | -0.07 | -14 | 897.5k |
| CHC | Charter Hall Group | 0.74 | -0.12 | -13.45 | 482.2k |
| RRT | Record Realty | 0.04 | -0.01 | -13.04 | 516.6k |
