Australian regulators announce bear markets are illegal: Ban all short selling.

news article

There goes the free market…

Short sellers are getting blamed for collapsing stock prices…how then can they explain the Shanghai market, which does not permit short selling and yet has collapsed from 6200 to 1900?

When oil prices are too high, blame the greedy speculators who keep buying.  When stocks fall too much, blame the greedy short sellers who keep selling.

If the government likes price stability so much, perhaps they can ban buying and selling in all markets.

Idiots.

Unexpected turn of events

The unprecedented plan to bailout all banks with worthless paper might mean that at least an intermediate bottom had been put in most indices – I’ll need to have a look at the charts to be sure given I haven’t paid attention to spx or xao charts recently.  **CBA might not break below March lows if it gets a monthly close above $46 level.

Regardless of the outcome of the bailout for the financial markets, this is good news for gold, oil and other commodities in the long run.  (Edit: Included a simple chart of SPX; I suspect a fibonacci retracement of 61.8% or 78.6% may occur)

Commonwealth Bank of Australia

CBA has been one of the relative outperformers among the major banking stocks, being the only one holding above its March lows.  Looking at the monthly chart of the stock, I expect to see it take out the lows somewhere down the track.

Truth behind the Russian-Georgian conflict? Western Liberal media censorship…

I’m not one that likes to delve into the realms of politics, but recent events and their portrayal by the Western journalism has just sickened me to no end.  I rarely pay attention to mainstream media news in Australia given that it’s so biased that it actually makes Chinese state media look good (and if I do watch the news, I’ll only watch SBS world news considering it contains the least amount of bullshit).

As for the markets, the US is a shithole and the US dollar is in a secular bear market while commodities are still in a secular bull market.  That doesn’t mean the US dollar can’t rally further or that commodities can’t continue to fall – at least in the short to medium term.  Despite that, if you’re looking at the long term, continue to look for opportunities in any areas OTHER than toxic turds like US equity or financial waste.  You’d have to be fucked in the head to believe that the Fannie Mae and Freddie Mac bailout announcement awhile ago will help retarded US lenders and borrowers in any discernible manner.

‘…it will get worse before it gets better…’

Interesting views from ‘Boon’ at bhcinvestments in regards to the credit crisis.

Side note, I’m preparing to dip my toe into gold investments.  Not necessarily gold mining stocks, but rather gold bullion funds.

Market commentary

I’ve been far too busy in my final year of university to update this blog for the last few months, and it’s likely to stay that way in the near future. (Good news is that I’ve already secured a great graduate program position with a major institution, bad news is that it’s a financial institution).

My holdings have changed since I last posted. I’ve now got 30% of my money in a term deposit, while the rest invested in agricultural and energy stocks which have performed very well recently (IPL, QGC and OSH). I also own AQP (platinum stock), and that has held up ok as well (until recently). These stocks all have trailing stops on them. As for the stocks purchased late January? With the exception of AAX, LEI and JET (which were all sold for a profit), all the other stocks I bought earlier in the year were dumped for modest losses…

After almost 6 months have passed since the start of 2008, I thought it would be interesting to look back to what I was thinking at the start of the year.

The outperformers in the first quarter or first half will probably end up being oil, precious metals and agricultural stuff. They’ll probably underperform in the later periods of the year as the laggards (financials et al) start to pick up pace. Thus I’ll be looking to bottom pick some financial stocks showing slight relative strength as that time approaches. The only name I can come up with right now is Babcock and Brown. I would not be buying any financials stocks at this point in time though.

Well, energy, agricultural (and to a lesser extent, precious metals) clearly have outperformed…and financials continue to choke on their own vomit. The question is whether the financials will find its feet somewhat as we prepare to enter into the 2nd half of the year. Right now, I’m starting to think that it will actually get worse before it will get better and I’m gonna steer clear of bottom picking in this sector.

For what it’s worth, I will trash my comment about buying Babcock and Brown in the latter half of the year. The stock right now is a downside leader and should be avoided at all costs if you don’t like gambling. This garbage stock may very well print an intermediate term low today given that it has halved in price over the span of a few weeks, however, this thing is an avoid at all costs. BNB could become another CNP, AFG or MFS for all I know.

Check out the links on my blog roll, as a lot of the ideas I come up with come from them. Notable blogs include http://www.bhcinvestment.com/ (formerly trade bursa malaysia –> some amazing calls from its author) and will rahal.

Despite the ‘Crash’, it looks like we might close unchanged/green for the week

Mother market shook me out of all my buys and into 100% cash on Tuesday. Despite that, I’m coming out of the week with plenty of stocks in hand which were bought over the course of Wednesday and Thursday. LEI, WOR, JET, QBE and IPL (again). I’m also considering a play on platinum, with AQP, which is still consolidating in a tight range.

Update at close: Sold QBE at close and bought AAX. Buying growth.

Dow Emini

Interesting to note that datawink pattern recognition system is continuing to give weak dow signals.  Check out the post here.

All Ordinaries: Critical Juncture

Seems like we could break the ‘fast’ downtrend or head for a retest.

Note that the market is trading at the 5 day EMA.

Yen up too much too soon

Suggests equities might bounce some more.