Archive for the ‘All Ordinaries’ Category

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.


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

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


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I’m having to work off my crappy laptop, so I’ll keep this short. I dumped all my BHP and STW for a loss near the close as it appears that the washout decline that I hoped happened on Friday was in fact not a washout. Perhaps today was the washout/capitulation move that was required, but I don’t want to hang around to find out considering how close we are trading to major support. Still holding on to my IPL though.

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My only holding IPL will probably get hammered big time as Ag stocks in the US get punished.

This certainly isn’t a pretty market. The anticipated bounce on Monday/Tuesday occurred, but it was only an intraday rally. So far it appears that the XAO can only go in one direction: straight down. The US is pretty much in a confirmed bear market according to Colin Twiggs at incrediblecharts.com, but the All Ordinaries will not be in a confirmed bear market until the August lows are convincingly broken. Nonetheless, with the market trading below its 200ema, it is clearly in bearish territory at the moment. I think the Aussie market is still in the process of forming a major trading range like the one which occurred from 1999 to 2001 – but that could all change. With a horrendous open on Friday, could we be in the process of a washout that can trigger a more sustainable bounce in the Aussie bourse?


Sorry for the lack of updates, as I have been busy. I’ll try to get some charts up on the weekend.

Update: BHP suffers a huge gap down. Smells like panic. Dipping my toe in here at 34.5 in anticipation of a bounce later on. I’ve got plenty of cash to waste here. Also bought some STW (SP200 etf) to capitalise on a potential bounce……

Update @ close: Market rallies off morning lows. The position in BHP established this morning is up, as is my newly established position in STW. Let’s hope the market has a little more legs to stand on for this rally. I already sold half of BHP for a quick 2% in case this rally flops on Monday. I’m holding STW for the coming days though. Too scared to buy anything else as I’m not sure what will participate in the bounce and what will be left out. IPL is also falling a lot less than I expected, which is a good thing I guess – I expected a test of 102-104 today.  Sidenote, I’m up for the year so far in my equity account, in part due to my IPL holding and my vast reserves of cash raised last year.  Unfortunately, I have done nothing with my fx account.  If I put on my goggles of hindsight, I would have made tons of imaginary money by shorting GBP/JPY.

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All Ordinaries

There’s no need to tell you that the market is ‘oversold’ on the daily timeframe. One noteworthy point is that the XAO is approaching the 62% retracement from the August low to the November high, which is around the 6020 area. I guess we might see some sort of rally starting Monday or Tuesday (from market open), probably after a washout move – whether it turns out to be sustainable is another matter. Note also that the heavily weighted BHP is approaching the 200day EMA, which ‘may’ provide some support to the overall market.

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…is still trading below the short term MAs. Guilty till proven innocent.


But while fools are getting their teeth punched out with their broken stocks such as TOL, ZFX, SUN, AFG, CNP, AED, NAB, et al – I’m doing fine. IPL (my largest holding-30% weighting) is looking something like this:


My average price is 93-ish, with the position taken on the day I posted my signal here on the 3rd of Dec.  By the way, I’m yet to tweak the system for IPL.

My only other position is a small parcel of IDL, which is now getting dangerously close to being stopped out. Also, TRS is starting to look like a piece of shit. Lucky I no longer own it. Lost a bunch on trying to trade this crap 2 or 3 times this year. I still like the company though.

Overall, I think the growth will outperform value, just as it has been the case in the US.   That means don’t buy just because you see a low P/E.  Some fools forget that ‘E’ can go down too.

Meanwhile, keep an eye on stocks like IPL, JET and – maybe (just maybe) – AAX and CBD.  I’d like to add FLT to this so far tiny list based on its technicals, but I don’t like its recent US acquisition. Who wants to buy US shit linked with consumer spending? I could very well be wrong though.

I think it is time to be very selective from now on.  That being said, do not buy or sell stocks because of this post.  If you do, you will probably develop a very painful stomach ulcer.

In case I don’t post again in the coming days or weeks, have a safe holiday.


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As shown by the apparent collapse of Centro Property Group, leverage is a double edged sword. Centro was one of the best (if not the best) performing property stock leading up to May or so of this year because of its aggressive growth ambitions. Now that obscene amount of gearing on apparently safe retail property assets has come back to nip it in the butt. No doubt, this has become the worst performing property group. Other property stocks understandably took a big dive as well, culminating in the greatest one day plunge in the Australian Listed Property Index of a whopping 11%. Given the state of Centro, I would not be surprised to see Westfield make a bid for its assets given that it is now being sold off at fire sale prices.

Looking at the index now (click on chart below), the property index would either continue to fall precipitously below the down sloping blue line or make an attempt to bounce here. The listed property market is now probably in a bear market.


The Small Ordinaries are also acting substantially weaker relative to the All Ordinaries, which is analogous to the situation in the US where the Small Caps are substantially underperforming the Large Caps. Given the horrible internals in the Aussie market as mentioned in this post, we might have a rough few months ahead on the All Ords especially with narrowing leadership depending on a few toppy and overextended stocks like WOW, CBA, WBC, CSL and RIO. BHP looks like it has topped ever (at least for now) since I started harping on about its top in October in this post and in this post. *Pat myself on the back :p *

Sidenote: I hate the phrase ‘top up’ when used in the context of buying shares. To those that use this annoying phrase and perpetuate its common usage, I hope every stock you buy goes to zero. (End rant).

18/12: The market wide sell off is looking way over done on the All Ordinaries. I think we’re going to get a decent bounce soon:


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