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Tuesday, November 18, 2008

OzRant: Are We There Yet?

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There are those among you who will be thinking "That GT. What a champ. He told us not to buy the 'fluffing' that happened just last week, and the market has fallen 600 points since then." 

I am talking about last Monday, when the ASX200 closed above 4100... see OzRant:Fade This Rubbish... - pretty unambiguous headline, that. 

Here is a reminder for those who missed it:

The second core truth about today is that the Strayan market is being deliberately 'fluffed' - by the same sort of professionals who ensure 'ability to perform' for male porn stars. 

The price action screams "Smart Money At Work"... setting up a situation in which "Kochie" and the rest of his journalistic ilk, will receive press releases from the brokerage community, and will parrot same across all the air-waves in Straya.

This, it is hoped, will encourage Mum and Dad investors to dive back into the market: the brokerage community knows that there is a load of dough which has been withdrawn from mortgage-type funds, and which is sitting in bank accounts. They also know that this amount will increase dramatically once the fund managers get a large enough government bribe to encourage them to release the money that is currently being held hostage.

So they figure that is they goose the market indices, the punters will be tricked into putting that cash back into market-linked investments... but not into mortgage funds. The game that is now afoot,is to get them to slosh it into stock funds.

And then, the smart money will be selling like mad.

You mark my words, dear Readers... from Koch to Pascoe to Kohler, these chuckleheads who never saw disaster coming, will tout stocks simply because we've seen a dead cat bounce (and because they are all Brokerage Bitches).

Now nobody can say they weren't warned - unless they were ignorant of the World of Rant. Since then I have banged on about a short-term target of 3400 - at which point we might get a decent bounce. (See NonRant: SPISpy...).

I have also counseled against dipping so much as a toenail back on the long side, until we have a proper capitulation. Until the nuffies are in such pain that they dump stock at market all day, then curl up under their desk saying "Oh God oh God oh God oh GOD...please please please pleeeEEEEEEEEEEEEZ make it entire retirement is f#cked".

Are we there yet?

No, we're not. 

The tell -tale sign was the index's last-ditch attempt to front-run any potential US bounce. A sign of hope.

It's reasonably easy to see on the chart (below): after a prolonged period of selling in the afternoon -which I admit had me watching intently... for signs of that capitulation - with the market pretty deeply oversold... the thing went and rallied. it didn't stick right through to the close, but the attempt was there, and it started at a round number. A sign of hope.  

It's the green bar (the second-last bar of the chart... the green bar second from the extreme, your extreme right).


Sure, it was only 30-odd points (on a day where the thing had lost 120-odd). Sure, it was from a reasonably deep oversold.

Too bad. It tried to rally off a 'round number' (3500 on All Ords)...there is still too much hope. 

Why is that? You ask.

Simple. Look at the CCI- which I have circled, in my post-realist way (I am to Art what Os du Randt is to ballet). 

A lot of people will use -100 as their oversold level. Not me. For your Beloved GT, oversold on a CCI(20) is -200 during a downtrend, -150 during an uptrend. At no stage today did the chart hit-200

Without a CCI oversold, there can not be a CCI divergence. Without a CCI divergence, any 'capitulation indicator' based on market internals (see below) can just be put straight in the bin.

ASX200 15-minute chart
ASX200 15-min chart...

Now let's be absolutely clear - there is a very good chance that the US will bounce a little tonight. And the Strayan market might well have a bit of a spurt upwards tomorrow. A Sign of Hope. 

If you're investing based on hope, you'll get gutted every time. Any investment (or trading) idea that has hope as an input, ought to be thrown in the bin. 

If you get an urge to buy, simply stick a fork into your own forehead: it will save time and money, and will not do any long-term damage to your finances.

Major Market Indices

The broad market - the All Ordinaries (XAO)- slid pretty savagely, posting a loss of 126.4 points (3.47%), finishing at 3513.1 points. The index hit an intraday high of 3645.6 at 10:40 am, while the low for the day was 3500.8 - set at 3:27 pm Sydney time.

Let's call that low '3500-ish'.

Total volume traded on the ASX was 1.22bn units, 3.3% above its 10-day average of 1.18bn shares. The ASX's daily listing of all stocks included 1182 different 3-letter FPO's which traded (i.e., had non-zero trade volume). Of these, 203 issues rose, with advancing volume at just 184.9m units; there were 724 declining stocks, and declining volume was 885.4m shares. So a tilt to the decliners of 3.5:1, and a volume tilt of over 4:1 - but on modest volume and without a divergence.

Of the 490 All Ordinaries components, 71 rose while 344 fell.Volume was tilted in favour of the losers by a margin of 5:1, with136.89m shares traded in gainers while 680.77m 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)- dipped rather savagely, losing 129.8 points (3.55%), closing out the session at 3523.2 points.

GT Intraday Chart
Name Close +/-(%)
AllOrdinaries 3513.10 -126.40 (3.5%)
ASX20 2092.50 -75.10(3.5%)
ASX50 3528.00 -131.70 (3.6%)
ASX100 2894.50 -106.60(3.6%)
ASX200 3523.20 -129.80 (3.6%)
ASX300 3507.00 -129.10(3.6%)
ASXMid-Cap 50 3332.90 -110.40 (3.2%)
ASXSmall Ordinaries 1698.60 -61.90(3.5%)

The "heavy hitters" of the Australian market - the ASX20 Leaders (XTL) - dropped in line with the overall market,  sliding 75.1 points (3.46%) to 2092.5 points.

The 21 index components traded a total of 176.99m units; 3 had a gain, with rising volume amounting to 27.62m shares. The 17 decliners had volume traded totalling 145.68m units. 

The only percentage gainers within the index were

  • Macquarie Group (MQG),+$3.40 (16.5%) to $24.00 on volume of 4.1 million shares;
  • Wesfarmers (WES),+$0.62 (3.52%) to $18.21 on volume of 3.7 million shares; and
  • National Australia Bank (NAB),+$0.22 (1.16%) to $19.15 on volume of 19.8 million shares.

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

  • Newcrest Mining (NCM),-$1.91 (9.14%) to $18.99 on volume of 2.2 million shares;
  • Rio Tinto (RIO),-$5.44 (7.41%) to $68.00 on volume of 2.5 million shares;
  • Woolworths (WOW),-$1.65 (5.91%) to $26.25 on volume of 4.9 million shares;
  • Westfield Group (WDC),-$0.86 (5.87%) to $13.79 on volume of 4.5 million shares; and
  • CSL (CSL),-$2 (5.45%) to $34.70 on volume of 1.5 million shares.

At the other end of the market-cap spectrum the ASX Small Ordinaries (XSO) fell in line with its large-cap counterpart. The Small Ords was off 61.9 points (3.52%) to 1698.6 points.

The 208 stocks which make up the index traded a total of 275.9m units: volume in the 28 gainers totalling 19.98m shares, with trade totalling 223.1m units in the index's 162 declining components.

The major percentage gainers within the index were

  • Bannerman Resources (BMN),+$0.12 (31.94%) to $0.48 on volume of 2.8 million shares;
  • Flexigroup Limited (FXL),+$0.06 (23.4%) to $0.29 on volume of 340.2 thousand shares;
  • Alliance Resources (AGS),+$0.04 (7.69%) to $0.56 on volume of 115.7 thousand shares;
  • AJ Lucas Group (AJL),+$0.21 (4.33%) to $5.06 on volume of 297.7 thousand shares; and
  • Austal (ASB),+$0.09 (3.98%) to $2.35 on volume of 294.4 thousand shares.

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

  • Galileo Japan Trust (GJT),-$0.07 (46.21%) to $0.08 on volume of 12.2 million shares;
  • Becton Property Group (BEC),-$0.04 (35.2%) to $0.08 on volume of 2.1 million shares;
  • CopperCo (CUO),-$0.02 (26.47%) to $0.05 on volume of 8.2 million shares;
  • Australian Education Trust (AEU),-$0.06 (21.05%) to $0.23 on volume of 270.1 thousand shares; and
  • GUD. Holdings (GUD),-$0.9 (19.57%) to $3.70 on volume of 189.7 thousand shares.

Index Changes
Code Name Close +/- % Volume
XAO All Ordinaries 3513.1 -126.4 -3.47 901.1m
XFL ASX 50 3528 -131.7 -3.6 378.3m
XJO ASX 200 3523.2 -129.8 -3.55 734.6m
XKO ASX 300 3507 -129.1 -3.55 859.7m
XMD ASX Mid-Cap 50 3332.9 -110.4 -3.21 213.6m
XSO ASX Small Ordinaries 1698.6 -61.9 -3.52 267.9m
XTL ASX 20 2092.5 -75.1 -3.46 169.6m
XTO ASX 100 2894.5 -106.6 -3.55 591.8m
Market Breadth
Advances 3 15 28 71 28 203
Declines 17 79 168 344 162 724
Advancing Volume 27.6m 109.7m 121.7m 136.9m 20m 184.9m
Declining Volume 145.7m 447.4m 587.3m 680.8m 223.1m 885.4m
GICS Industry Indices

Among the 11 industry indices, the news was universally negative: not a single sector managed to break into the "Win" column.

Since none of the industry sectors registered a gain for the session, there is no point in burdening ourselves with the internal behaviour of advancing sectors... on to the losers.

The worst-performed index for the session was Materials(XMJ), which dipped 436.8 points (5.49%) to 7512.6 points. The 45 stocks which make up the index traded a total of 190.03m units; 41 decliners had volume traded totalling 174.21m units, and 2 index components rose, with rising volume amounting to 1.97m shares. The major percentage decliners within the index were

  • Perilya Limited (PEM),-$0.03 (19.35%) to $0.13 on volume of 4.1 million shares;
  • Incitec Pivot (IPL),-$0.41 (14.14%) to $2.49 on volume of 11.4 million shares;
  • Fortescue Metals Group Ltd (FMG),-$0.25 (13.21%) to $1.61 on volume of 8.3 million shares;
  • Alumina (AWC),-$0.17 (12.79%) to $1.13 on volume of 6.7 million shares; and
  • OM Holdings (OMH),-$0.13 (12.08%) to $0.91 on volume of 543.8 thousand shares.

Just missing out on the wooden spoon was PropertyTrusts (XPJ),which slid 43.1 points (4.25%) to 971.5 points. The 21 stocks which make up the index traded a total of 143.07m units; The 15 decliners had volume traded totalling 81.73m units, and 5 index components rose, with rising volume amounting to 48.87m shares. 

The major percentage decliners within the index were

  • Abacus Property Group (ABP),-$0.04 (11.43%) to $0.31 on volume of 1.6 million shares;
  • Macquarie DDR Trust (MDT),-$0.01 (8.43%) to $0.08 on volume of 8.1 million shares;
  • Goodman Group (GMG),-$0.09 (7.89%) to $1.05 on volume of 11.8 million shares;
  • Babcock&Brown Japan Property Trust(BJT),-$0.04 (7.61%) to $0.43 on volume of 2 million shares; and
  • Centro Retail (CER),-$0.01 (6.98%) to $0.08 on volume of 3.9 million shares.

Third-to-last amongst the sector indices was Industrials (XNJ),which slid 134.2 points (3.98%) to 3237.5 points. The 32 stocks which make up the index traded a total of 101.86m units; The 24 decliners had volume traded totalling 62.8m units, and 5 index components rose, withrising volume amounting to 24.96m shares, The major percentage decliners within the index were

  • Asciano Group (AIO),-$0.19 (14.4%) to $1.10 on volume of 6.7 million shares;
  • NRW Holdings (NWH),-$0.07 (14.29%) to $0.39 on volume of 413.9 thousand shares;
  • Bradken (BKN),-$0.51 (14.21%) to $3.08 on volume of 482.9 thousand shares;
  • Boart Longyear (BLY),-$0.04 (14.04%) to $0.25 on volume of 13.4 million shares; and
  • Leighton Holdings (LEI),-$2.95 (12.39%) to $20.85 on volume of 835.5 thousand shares.

Sector Indices
Code GICS Sector Close +/- % Volume
XIJ Information Technology 391.9 -2.2 -0.56 4m
XUJ Utilities 4403.4 -88.8 -1.98 37m
XXJ Financials ex Property Trusts 3649.6 -82.8 -2.22 121m
XDJ Consumer Discretionary 1125.4 -30.3 -2.62 43m
XSJ Consumer Staples 6227.5 -195.7 -3.05 32m
XTJ Telecommunications 1368.8 -49.3 -3.48 40m
XEJ Energy 12155.7 -461.8 -3.66 35m
XHJ Healthcare 8535.8 -337.1 -3.8 10m
XNJ Industrials 3237.5 -134.2 -3.98 102m
XPJ Property Trusts 971.5 -43.1 -4.25 143m
XMJ Materials 7512.6 -436.8 -5.49 190m

All Ordinaries Major Movers

All Ords Volume Leaders
Code Name Close +/- % Volume
OZL OZ Minerals 0.73 -0.10 -12.05 44.4m
TLS Telstra Corporation. 4.08 -0.15 -3.55 33.6m
ILF ING Real Estate Community Living Group 0.07 -0.01 -14.47 28.6m
GPT GPT Group 1.03 0.01 0.98 26.9m
BBI Babcock & Brown Infrastructure Group 0.05 -0.01 -8.62 20m
All Ords Percentage Gainers
Code Name Close +/- % Volume
BMN Bannerman Resources 0.48 0.12 31.94 2.8m
FXL Flexigroup 0.29 0.06 23.4 340.2k
MQG Macquarie Group 24.00 3.40 16.5 4.1m
PRT Prime Media Group 1.65 0.15 10 316.8k
SHV Select Harvests 3.64 0.33 9.97 28.6k
All Ords Percentage Losers
Code Name Close +/- % Volume
GJT Galileo Japan Trust 0.08 -0.07 -46.21 12.2m
CEG CEC Group 0.10 -0.08 -44.44 151.5k
BEC Becton Property Group 0.08 -0.04 -35.2 2.1m
CUO CopperCo 0.05 -0.02 -26.47 8.2m
BNB Babcock & Brown 0.31 -0.10 -24.39 13.7m