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Tonight, subscribers will receive a detailed e-mail which will reveal why there was no signal for SPISpyers to initiate a long position and why hedges were not removed from the Rant Model Portfolios, which remain 100% hedged.
As I have mentioned before, these portfolios were 100% hedged since the now-famous "OzRant: Rally. Over. !!I!!Eleventy!!..." post on February 28th. How many folks out there have had portfolios that were 100% insulated against market-wide risk since the All Ords was 5880?
Drink that in, folks. And since you all know that your beloved GT has a deep-value bias anyhow, you will find that yes, we hedged away market risk, but we retained long positions in stocks with significant dividend yields - stocks which have outperformed the market (even though the portfolios would have declined if left unhedged, they declined by 15% less than the market).
Well now... I do believe that my target of 3400 (basis ASX200) was achieved. In spades. In fact, it was breached with a vengeance within minutes of the open. The market then tried to rally (in fact its rally was pretty impressive - from 3329 to 3391 in a little over 90 minutes.
In the context (a huge decline day), a 60-point rally in 90 minutes would ordinarily be viewed as evidence of the stench of Hope. However the bounce evaporated after midday, and the slide to the close was inexorable - but it was far too gentle.
I would have much preferred to see a genuine lurch downwards into the close, as was the case in the US market this morning - but that did not happen. If the closing behaviour had shown absolute panic and a waterfall decline, we would be long right now and the Rant Model Portfolios would now be back to unhedged. As it is, we will have to wait - because although there might be a bounce, I now think that there is significant further downside - quite possibly a break of the 2002 lows on the US indices, which would mean that equities would be at their lowest levels since 1996.
So we go back to "wait and see", despite the apparent bloodbath today (and last night). That's just how it is.
Major Market Indices
The broad market - the All Ordinaries (XAO) - dropped sharply, losing 150.6 points (4.32%), finishing at 3332.6 points. The index hit an intraday high of 3391.9 at 12:01 pm, while the low for the day was 3328.4 - set at 10:30 am Sydney time.
Let's take a detailed, step by step gander at the breadth and internals - so that we can see if we can tick off all the boxes that I have outlined previously (big volume, massive downside tilt in advance-decline stats and volume).
Internals...
Total volume traded on the ASX was 1.57bn units, 31.1% above its 10-day average of 1.19bn shares.
High volume decline day... that ticks the first box for 'Operation Capitulation'.
The ASX's daily listing of all stocks included 1205 different 3-letter FPO's which traded (i.e., had non-zero trade volume). Of these, 182 issues rose, while there were 785 declining stocks.
Big tilt toward decliners: decliners outnumbered advancers by 4.3:1... place a tick in box 2.
Volume in rising issues was 231.5m shares, and volume in declining stocks was 1.08bn shares.
Big volume tilt towards decliners: declining volume outpaced advancing volume by 4.68:1... place a tick in box 3.
The internals seem to check out - precisely what I have been banging on about for weeks. And yet in the prefatory remarks I make it clear that I think it's not a bottom.
So let's go to the other indices.
Of the 489 All Ordinaries components, 65 rose while 356 fell. Volume was tilted in favour of the losers by a margin of 6.1:1, with 154.74m shares traded in gainers while 945.57m shares traded in the day's losers.
The Index that forms the cash basis for the SPI Futures - the S&P/ASX 200 (XJO) - dipped rather savagely, losing 146.7 points (4.19%), closing out the session at 3352.9 points.
| Name | Close | +/-(%) |
|---|---|---|
| All Ordinaries | 3332.60 | -150.60 (4.3%) |
| ASX 20 | 1989.70 | -101.10 (4.8%) |
| ASX 50 | 3356.30 | -157.40 (4.5%) |
| ASX 100 | 2754.20 | -121.90 (4.2%) |
| ASX 200 | 3352.90 | -146.70 (4.2%) |
| ASX 300 | 3335.90 | -146.90 (4.2%) |
| ASX Mid-Cap 50 | 3175.90 | -78.20 (2.4%) |
| ASX Small Ordinaries | 1609.70 | -67.50 (4.0%) |
The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - was taken to the woodshed, dropping 101.1 points (4.84%), closing out the session at 1989.7 points.
The 21 stocks which make up the index traded a total of 214.27m units; just 3 index components rose, with rising volume amounting to 13.44m shares. The 17 decliners had volume traded totalling 198.55m units. The percentage gainers within the index were
- Macquarie Group (MQG), +$1.84 (7.31%) to $27.00 on volume of 2.6 million shares;
- Suncorp-Metway. (SUN), +$0.25 (3.62%) to $7.15 on volume of 5.6 million shares; and
- QBE Insurance Group (QBE), +$0.46 (2.06%) to $22.80 on volume of 5.2 million shares.
On the less salubrious side of the big-cap fence, the following stocks were the worst-performed within the index:
- Rio Tinto (RIO), -$8.65 (13.13%) to $57.25 on volume of 5.1 million shares;
- Woodside Petroleum (WPL), -$3.28 (9.67%) to $30.65 on volume of 2.9 million shares;
- Wesfarmers (WES), -$1.72 (9.19%) to $17.00 on volume of 3.7 million shares;
- BHP Billiton (BHP), -$2.1 (9.05%) to $21.10 on volume of 27.3 million shares; and
- ANZ Banking Group (ANZ), -$0.82 (5.93%) to $13.00 on volume of 16.8 million shares.
The ASX Small Ordinaries (XSO) outperformed the big end of town, sliding 67.5 points (4.02%), closing out the session at 1609.7 points.
The 209 stocks which make up the index traded a total of 349.12m units: volume in the 22 gainers totalling 34.16m shares, with trade totalling 279.61m units in the index's 171 declining components. The major percentage gainers within the index were- Australand Property Group (ALZ), +$0.04 (10.77%) to $0.36 on volume of 2.6 million shares;
- JB Hi-Fi (JBH), +$0.52 (7.24%) to $7.70 on volume of 976.7 thousand shares;
- Bunnings Warehouse Property Trust (BWP), +$0.10 (5.65%) to $1.78 on volume of 719.6 thousand shares;
- Invocare (IVC), +$0.21 (4.38%) to $5.00 on volume of 389.8 thousand shares; and
- Panoramic Resources (PAN), +$0.04 (4.21%) to $0.99 on volume of 1.2 million shares.
In the red-zone of the little-stock index, the following list represents the biggest downers (in terms of percentage decline):
- Babcock & Brown Power (BBP), -$0.01 (30.43%) to $0.03 on volume of 15.2 million shares;
- Marion Energy (MAE), -$0.06 (29.73%) to $0.13 on volume of 5.9 million shares;
- Coeur D'Alene Mines Corporation (CXC), -$0.21 (25.3%) to $0.62 on volume of 195.2 thousand shares;
- Becton Property Group (BEC), -$0.02 (22.67%) to $0.06 on volume of 1.7 million shares; and
- Aditya Birla Minerals (ABY), -$0.03 (22.22%) to $0.11 on volume of 1.7 million shares.
Index Changes
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XAO | All Ordinaries | 3332.6 | -150.6 | -4.32 | 1199m |
| XFL | ASX 50 | 3356.3 | -157.4 | -4.48 | 517.3m |
| XJO | ASX 200 | 3352.9 | -146.7 | -4.19 | 1037.2m |
| XKO | ASX 300 | 3335.9 | -146.9 | -4.22 | 1150.6m |
| XMD | ASX Mid-Cap 50 | 3175.9 | -78.2 | -2.4 | 293.6m |
| XSO | ASX Small Ordinaries | 1609.7 | -67.5 | -4.02 | 339.7m |
| XTL | ASX 20 | 1989.7 | -101.1 | -4.84 | 206.5m |
| XTO | ASX 100 | 2754.2 | -121.9 | -4.24 | 810.9m |
Market Breadth
| ASX20 | XTO | XJO | XAO | XSO | Market | |
|---|---|---|---|---|---|---|
| Advances | 3 | 20 | 37 | 65 | 22 | 182 |
| Declines | 17 | 71 | 154 | 356 | 171 | 785 |
| Advancing Volume | 13.4m | 119.5m | 141.9m | 154.7m | 34.2m | 231.5m |
| Declining Volume | 198.5m | 643.9m | 840.1m | 945.6m | 279.6m | 1.08bn |
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 523.9 points (7.25%) to 6701.9 points. The 45 stocks which make up the index traded a total of 295.17m units; The 34 decliners had volume traded totalling 239.42m units, and 8 index components rose, with rising volume amounting to 47.09m shares, The major percentage decliners within the index were
- Coeur d'Alene Mines Corporation (CXC), -$0.21 (25.3%) to $0.62 on volume of 195.2 thousand shares;
- Mount Gibson Iron (MGX), -$0.06 (20.75%) to $0.21 on volume of 9.3 million shares;
- Platinum Australia (PLA), -$0.09 (16.83%) to $0.42 on volume of 1.9 million shares;
- OZ Minerals (OZL), -$0.11 (16.67%) to $0.53 on volume of 84 million shares; and
- PanAust Ltd (PNA), -$0.03 (14.71%) to $0.15 on volume of 20.4 million shares.
Just missing out on the wooden spoon was Energy (XEJ), which slid 719.8 points (6.05%) to 11180.2 points. The 19 stocks which make up the index traded a total of 52.8m units; The 18 decliners had volume traded totalling 47.09m units, and volume in the lone rising index component was 0m shares, The major percentage decliners within the index were
- Nexus Energy (NXS), -$0.09 (17.35%) to $0.41 on volume of 5.1 million shares;
- Paladin Energy (PDN), -$0.36 (16.29%) to $1.85 on volume of 7 million shares;
- Linc Energy Ltd (LNC), -$0.44 (15.49%) to $2.40 on volume of 1.3 million shares;
- Riversdale Mining (RIV), -$0.31 (14.16%) to $1.88 on volume of 1.5 million shares; and
- Worleyparsons (WOR), -$1.33 (10.01%) to $11.96 on volume of 2.5 million shares.
Third-to-last amongst the sector indices was Healthcare (XHJ), which slid 354.6 points (4.15%) to 8182.4 points. The 9 stocks which make up the index traded a total of 18.28m units; The 6 decliners had volume traded totalling 11.19m units, and 2 index components rose, with rising volume amounting to 3.88m shares, The major percentage decliners within the index were
- CSL (CSL), -$2.06 (5.9%) to $32.88 on volume of 3.7 million shares;
- Cochlear (COH), -$2.92 (5.52%) to $50.01 on volume of 470.2 thousand shares;
- ResMed Inc. (RMD), -$0.19 (3.49%) to $5.26 on volume of 2.3 million shares;
- Ramsay Health Care (RHC), -$0.24 (2.33%) to $10.06 on volume of 543.9 thousand shares; and
- Ansell (ANN), -$0.22 (1.77%) to $12.23 on volume of 867.9 thousand shares.
Sector Indices
| Code | GICS Sector | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XNJ | Industrials | 3112.9 | -52.7 | -1.66 | 135m |
| XIJ | Information Technology | 374 | -8.7 | -2.27 | 4m |
| XPJ | Property Trusts | 956.1 | -25.2 | -2.57 | 181m |
| XDJ | Consumer Discretionary | 1061 | -31.5 | -2.88 | 60m |
| XUJ | Utilities | 4284.3 | -131.9 | -2.99 | 86m |
| XTJ | Telecommunications | 1332.7 | -42.4 | -3.08 | 68m |
| XSJ | Consumer Staples | 5895.8 | -200.8 | -3.29 | 42m |
| XXJ | Financials ex Property Trusts | 3607.8 | -126.6 | -3.39 | 105m |
| XHJ | Healthcare | 8182.4 | -354.6 | -4.15 | 18m |
| XEJ | Energy | 11180.2 | -719.8 | -6.05 | 53m |
| XMJ | Materials | 6701.9 | -523.9 | -7.25 | 295m |
All Ordinaries Major Movers
All Ords Volume Leaders
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| OZL | OZ Minerals | 0.53 | -0.11 | -16.67 | 84m |
| TLS | Telstra Corporation. | 3.97 | -0.13 | -3.17 | 55.2m |
| BBI | Babcock & Brown Infrastructure Group | 0.03 | -0.01 | -27.66 | 52m |
| GPT | GPT Group | 1.04 | -0.01 | -0.48 | 32.2m |
| BHP | BHP Billiton | 21.10 | -2.10 | -9.05 | 27.3m |
All Ords Percentage Gainers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| PBD | Port Bouvard | 0.19 | 0.04 | 26.67 | 1.3m |
| CPR | Clive Peeters | 0.10 | 0.02 | 18.75 | 92k |
| FEA | Forest Enterprises | 0.37 | 0.06 | 17.74 | 17k |
| NFK | Norfolk Group | 0.43 | 0.05 | 13.16 | 119.3k |
| MAFCA | Multiplex Prime Property Fund | 0.10 | 0.01 | 11.11 | 39.6k |
All Ords Percentage Losers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| TTY | Territory Resources | 0.10 | -0.05 | -31.03 | 855.4k |
| BBP | Babcock & Brown Power | 0.03 | -0.01 | -30.43 | 15.2m |
| MAE | Marion Energy | 0.13 | -0.06 | -29.73 | 5.9m |
| BBI | Babcock & Brown Infrastructure Group | 0.03 | -0.01 | -27.66 | 52m |
| KMN | Kings Minerals NL | 0.05 | -0.02 | -25.71 | 96.1k |
