Interdum stultus opportuna loquitur...

Wednesday, October 01, 2008

OzRant: Toot-ily Toot toot toot....

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

How sweet it is...

I've said it before, and I'll keep saying it until I'm blue in the face... when the 'hangers on' are all a-flutter - in either direction - then the only place to be is on the other side of the trade.

And of course we know that apart from schoolteachers, the ultimate hangers-on are journalists. Calling yourself a 'finance journalist' is basically an admission that you don't have the skills to actually make a living from trading or investing... yet somehow you're equipped to tell others how to do so.

Schoolteachers are - on the whole, and with five exceptions in my entire life - pig ignorant (the exceptions: Mr Rodgers (Y10 Advanced Maths), Mr Fox (Y12 Pure Maths), Mr Statham (Y12 Physics), Mrs Brown (Y12 English), Mrs Nacholinski (Y10 French) ... and maybe Mr Dobinson (Y12 Applied Maths). The rest were people who basically had no alternative use except if they were ground up and used to feed pigs.

And just think - they all became teachers before the bureaucratisation of education. At the time they were teaching me, most of the good'uns were in their 50s or 60s (although Mr Fox and Mr Statham were younger). Mr Rodgers was a tail gunner in a Liberator during WWII.

In more recent history, have never known an Honours level undergraduate in any discipline who then undertook a teaching 'qualification', but I can give you forty examples of people who didn't make the Honours class and who decided to become teachers. Teaching courses are absolutely chock full of the also-rans from other disciplines. Teaching courses are the Special Olympics of the university world.

The few talented-but-lazy people who gravitate toward teaching after an unsuccessful undergraduate stint (like my former colleague Matthew Peter) seldom stomach it for long - those individuals generally then make a decision to get back into proper intellectual harness. Thus Matt, having surfed during his undergraduate years and having never gotten more than 60% in any subject as an undergrad, spent a year or so teaching, hated it. He then returned to Uni and eventually got his doctorate and went to work for a very good hedge fund.  

Journalists - on the whole - are almost as stupid as schoolteachers. They are herd animals - and it is a watchword in the World of Rant that when all four major journalism outlets (Bloomberg, CNBC, CBSMarketWatch and Reuters) are on the same side of the boat, we want to be on the other side (and preferably, in another boat altogether).

And that is part of the reason that yesterday's OzRant exhorted people to...

at the start of today's US session, sell bonds and buy the Dow. (Or buy SPI futures in the overnight).

And how'd that work out? 

Well, the 30-year Bond fell 2 full points between the NYSE day session open and the close: easily doubling the intraday margin required to take the position. Full intraday initial margin is $3375 per contract, but any number of futures brokers will reduce that to $1000 (and if they don't, sack them and move somewhere else). 

Profit from the 2-point move: $2000 per contract. Getting to toot about it: priceless.   

The Dow opened gap up, so we can not claim the entire 485 point rise. But we can claim 300 of it without blinking. 

If you were trading with a broker who offers low day-session margins (and they all do) you could not have failed to double your dough. 

As an example - several firms offer $500 intraday margins on ES, YM and NQ futures... and the 300 point Dow move was a gain of $1500 per YM contract.

For the present I think all positions ought to be closed. Not because markets aren't going to keep going in the same direction for a wee while longer, but because it will be easy to get a re-entry at more attractive prices. 

Once I get back home (in a day or so) and re-establish contact with the world outside of Blogger (the only thing I have access to for the past 3 weeks), I'm not going to broadcast trades like this on the blog anymore. 

I'm only doing it now because I have no alternative means of transmitting my genius to the world (I lost my USB key with all my GPG details on it before I even got to where I am, so I have been mail-less and without access to the subscriber site for the whole time). 

Anyway... long story short: to continue getting heads-ups like the one above, you'll need to join the  subscribers to the USSpy and/or SPISpy.  Otherwise the only thing you'll see is me tooting about it after the fact, which is likely to become tiresome.

Hell, the trade detailed above - posted for free, well in advance of the open - paid for over a year's worth of monthly USSpy service. The last oil trade paid for three years' worth. 

So don't say I never give you anything.

Major Market Indices

The broad market - the All Ordinaries (XAO) - surged a whopping 151.8 points (3.28%), finishing at 4783.1 points. The index hit an intraday high of 4814.5 at settlement (4:15 pm), while the low for the day was 4662.4 - by virtue of the ASX's antiquated 'staggered' opening system.

Total volume traded on the ASX was 1.32bn units, 16.6% above its 10-day average. The ASX's daily listing of all stocks included 1380 different 3-letter FPO's which traded (i.e., had non-zero trade volume). Of these, 216 issues rose, with volume in rising issues totalling 136m units; decliners numbered 936 counters, and between them they traded aggregate declining volume of 1.09bn shares.

Of the 496 All Ordinaries components, 298 rose while 121 fell. Volume was tilted in favour of the gainers by a margin of 5.1:1, with 511.11m shares traded in gainers while 100.65m 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) - hurtled skyward to the tune of 160.9 points (3.50%), closing out the session at 4761.4 points.

GT Intraday Chart
Name Close +/-(%)
All Ordinaries 4783.10 151.80 (3.3%)
ASX 20 2744.00 109.70 (4.2%)
ASX 50 4699.30 169.50 (3.7%)
ASX 100 3884.30 134.80 (3.6%)
ASX 200 4761.40 160.90 (3.5%)
ASX 300 4748.80 158.00 (3.4%)
ASX Mid-Cap 50 4709.70 120.00 (2.6%)
ASX Small Ordinaries 2516.60 49.00 (2.0%)

The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - had a bit of a moonshot, stacking on 109.7 points (4.16%), closing out the session at 2744 points.

Among the 20 big guns, things were relatively upbeat: only one index component sought to rain on the bull's parade. The 21 stocks which make up the index traded a total of 113.02m units; 20 index components rose, with rising volume amounting to 109.94m shares, while the sole declining stock traded 3.08m units. The major percentage gainers within the index were

  • Rio Tinto (RIO), +$10.50 (12.43%) to $95.00 on volume of 3.8 million shares;
  • Westpac Banking Corporation (WBC), +$1.77 (8.24%) to $23.25 on volume of 5.8 million shares;
  • St George Bank (SGB), +$1.89 (6.61%) to $30.49 on volume of 1.1 million shares;
  • Brambles (BXB), +$0.49 (6.36%) to $8.19 on volume of 3.6 million shares; and
  • National Australia Bank (NAB), +$1.44 (5.94%) to $25.70 on volume of 5.7 million shares.

On the less salubrious side of the big-cap fence, the following stocks were the worst-performed within the index:

  • QBE Insurance Group (QBE), -$0.06 (0.23%) to $26.44 on volume of 3.1 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 significantly underperformed its large-cap counterpart. The Small Ords performed solidly, in moving up 49 points (1.99%), closing out the session at 2516.6 points.

Among the stocks that make up the Small Caps index, 136 index components finished to the upside, and of the rest, 50 closed lower for the session.

The 208 stocks which make up the index traded a total of 285.47m units: volume in the 136 gainers totalling 178.58m shares, with trade totalling 33.57m units in the index's 50 declining components. The major percentage gainers within the index were
  • Rubicon America Trust (RAT), +$0.01 (23.81%) to $0.03 on volume of 1.1 million shares;
  • Mirvac Industrial Trust (MIX), +$0.03 (16.67%) to $0.21 on volume of 390.2 thousand shares;
  • Rubicon Japan Trust (RJT), +$0.00 (16%) to $0.03 on volume of 395.9 thousand shares;
  • Babcock & Brown Communities Group (BBC), +$0.06 (13.25%) to $0.47 on volume of 2 million shares; and
  • Apex Minerals NL (AXM), +$0.05 (11.9%) to $0.47 on volume of 2.7 million shares.

In the red-zone of the little-stock index, the following list represents the biggest downers (in terms of percentage decline):

  • Record Realty (RRT), -$0 (11.11%) to $0.02 on volume of 30 thousand shares;
  • Moly Mines (MOL), -$0.14 (11.02%) to $1.13 on volume of 505.8 thousand shares;
  • Perilya (PEM), -$0.03 (10%) to $0.27 on volume of 856.4 thousand shares;
  • Austereo Group (AEO), -$0.14 (8.46%) to $1.46 on volume of 86.2 thousand shares; and
  • OceanaGold Corporation (OGC), -$0.03 (7.5%) to $0.37 on volume of 416.2 thousand shares.

Index Changes
Code Name Close +/- % Volume
XAO All Ordinaries 4783.1 151.8 3.28 718.7m
XFL ASX 50 4699.3 169.5 3.74 220m
XJO ASX 200 4761.4 160.9 3.5 522.9m
XKO ASX 300 4748.8 158 3.44 654.4m
XMD ASX Mid-Cap 50 4709.7 120 2.61 153.7m
XSO ASX Small Ordinaries 2516.6 49 1.99 280.7m
XTL ASX 20 2744 109.7 4.16 109.6m
XTO ASX 100 3884.3 134.8 3.6 373.7m
Market Breadth
Advances 20 89 166 298 136 216
Declines 1 11 29 121 50 936
Advancing Volume 109.9m 323.4m 473.4m 511.1m 178.6m 136m
Declining Volume 3.1m 54.3m 70.2m 100.7m 33.6m 1.09bn
GICS Industry Indices

Among the 11 industry indices, it was green across the board, as every sector managed to keep its head above water.

The best performing index was Consumer Staples (XSJ), which added 312.7 points (4.45%) to 7333.3 points. The 13 stocks which make up the index traded a total of 30.42m units; 12 index components rose, with rising volume amounting to 29.87m shares, while sole declining stock traded 0.55m units. The major percentage gainers within the index were

  • Metcash (MTS), +$0.33 (8.31%) to $4.30 on volume of 2.6 million shares;
  • AWB (AWB), +$0.22 (7.91%) to $3.00 on volume of 2 million shares;
  • Timbercorp (TIM), +$0.04 (6.5%) to $0.66 on volume of 511.1 thousand shares;
  • Coca-Cola Amatil (CCL), +$0.52 (6.3%) to $8.77 on volume of 1.4 million shares; and
  • ABB Grain (ABB), +$0.49 (6.19%) to $8.40 on volume of 258.7 thousand shares.

Second in the index leadership stakes was Materials (XMJ), which gained 464.6 points (4.32%) to 11208.1 points. The 45 stocks which make up the index traded a total of 122.69m units; 31 index components rose, with rising volume amounting to 103.62m shares, while the 10 decliners had volume traded totalling 18.15m units. The major percentage gainers within the index were

  • Fortescue Metals Group Ltd (FMG), +$0.65 (13.95%) to $5.31 on volume of 7.6 million shares;
  • Rio Tinto (RIO), +$10.50 (12.43%) to $95.00 on volume of 3.8 million shares;
  • Lynas Corporation (LYC), +$0.08 (11.27%) to $0.79 on volume of 1.5 million shares;
  • Great Southern (GTP), +$0.04 (8.43%) to $0.45 on volume of 798 thousand shares; and
  • Gunns (GNS), +$0.10 (8.23%) to $1.25 on volume of 2.3 million shares.

The bronze medal for today goes to Financials ex Property Trusts (XXJ), which climbed 194 points (3.98%) to 5072.1 points. The 29 stocks which make up the index traded a total of 70.17m units; 25 index components rose, with rising volume amounting to 63.83m shares, while the 4 decliners had volume traded totalling 6.33m units. The major percentage gainers within the index were

  • Babcock & Brown (BNB), +$0.32 (16.2%) to $2.26 on volume of 8.6 million shares;
  • Henderson Group PLC (HGI), +$0.26 (11.21%) to $2.58 on volume of 1 million shares;
  • Perpetual (PPT), +$4.00 (8.55%) to $50.80 on volume of 82.8 thousand shares;
  • Westpac Banking Corporation (WBC), +$1.77 (8.24%) to $23.25 on volume of 5.8 million shares; and
  • Australand Property Group (ALZ), +$0.05 (8.11%) to $0.60 on volume of 833.9 thousand shares.

As mentioned above, there were no declining sectors today - so we can move on down to the Asian market stuff now.

Sector Indices
Code GICS Sector Close +/- % Volume
XSJ Consumer Staples 7333.3 312.7 4.45 30m
XMJ Materials 11208.1 464.6 4.32 123m
XXJ Financials ex Property Trusts 5072.1 194 3.98 70m
XUJ Utilities 4756.2 161.4 3.51 32m
XNJ Industrials 4538.4 137.3 3.12 108m
XHJ Healthcare 9328.2 240.3 2.64 6m
XTJ Telecommunications 1455 37.2 2.62 29m
XPJ Property Trusts 1402.2 33 2.41 103m
XEJ Energy 16522.3 344.2 2.13 29m
XDJ Consumer Discretionary 1612.3 13.9 0.87 38m
XIJ Information Technology 526 1.6 0.31 3m

All Ordinaries Major Movers

All Ords Volume Leaders
Code Name Close +/- % Volume
ADY Admiralty Resources NL 0.05 0.00 0 53.7m
CNP Centro Properties Group 0.09 0.00 2.27 26.9m
TLS Telstra Corporation Limited. 4.28 0.10 2.39 25.1m
EHL Emeco Holdings Ltd 0.81 0.01 1.25 21.9m
BLY Boart Longyear Limited 1.17 0.05 4.46 19.9m
All Ords Percentage Gainers
Code Name Close +/- % Volume
BVA Bravura Solutions Limited 0.54 0.14 35 859.7k
ACK Austock Group Limited 0.40 0.09 29.03 16.1k
CFU Ceramic Fuel Cells Limited 0.43 0.09 25 950k
HWI Housewares International Limited 1.15 0.23 24.46 35.2k
RAT Rubicon America Trust 0.03 0.01 23.81 1.1m
All Ords Percentage Losers
Code Name Close +/- % Volume
CZA Coal of Africa Limited 2.14 -0.35 -14.06 39.1k
RRT Record Realty 0.02 0.00 -11.11 30k
MOL Moly Mines Limited 1.13 -0.14 -11.02 505.8k
CRK Carrick Gold Limited 0.63 -0.07 -10 15k
PEM Perilya Limited 0.27 -0.03 -10 856.4k