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Archive for the ‘crash’ Category

Crash Crash Crash

Is a sharp BEAR market rally around the corner? Surely it must be…it certainly smells like capitulation.

I thought the global markets were about to decouple from the US ;p .

Fun times.

Update: Long STW. Long BHP. All @ open prices. Buying some crash :).

Update: Online broker server crashes. Fuck. Hope my stops are not hit.

Update: I’m an idiot.  I really need to start listening to the Fly.  All stopped out, including my remaining IPL stocks (@102~) .  My gains for the year are melting away.

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I could not be more wrong again about 5800 being ‘near’ the bottom. It dropped like a hot rock to 5600 and has pierced the trendline extending from the 2003 bottom.

It ‘looks’ like exhaustion selling, but I can’t find it in me to step in front of a freight train by buying. I’m scrapping my plan of buying the eminis as I suspect the US might go for a possible washout move as well.

Back on the sidelines with my cash. Preserve your capital at all costs for the next low risk trade.

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Update: Wow! Talk about selling exhaustion. I bought some panic (against my own advice) and put 20% of my cash to work, 5% on the QBE at 25.85, 5% on BNB at 18, and 10% on ANZ at 25.85. I’m wary of buying any more right now, but I can’t rule out another sharp retest. Maybe the short term bottom is in. Long term: it’s lookin bearish.

Hope I don’t regret my purchases.

Update2: Just to let you know, I sold BNB at the near close for 19.5 and half of ANZ at 26.85.  Small profits to make up for my losses when I sold MFS and CGF a week or so ago.  So I’m 5% QBE and 5% ANZ.  QBE reports early next week, so I’ll be dumping it by the end of Friday regardless of whether it goes up or down.  I know QBE tends to surprise to the upside rather than the downside, but given its precarious technical situation, I’ll be hopping off it.  Hope we get some follow through buying tomorrow.

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Carry trade Update:

AUD/JPY Carry trade is still intact despite its ugliness. See chart below. Channel support.

audjpy2321.gif

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Talk about gifting me a trade. The early morning stop run I guess. Target is the low 1440s and will keeps stops close at 1469 as I suspect the Plunge Protection Team will be out in full force to prevent a crash.

I decided to take off my trade at 1458. Looks like the PPT, I mean, bulls are fighting very hard. Go bulls.  Going to sleep now.

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Like I predicted a couple of days ago, we got a vicious bear attack before Friday. However, the crash scenario is back open.

The All Ords is absolutely getting demolished as I speak.  For my equity holdings, I’m 20% long, and even with the small holding, I’m getting butchered because of my exposure to the financials.  Ay.  That’s what I get for not having stops on my ‘investments’.  Macquarie Bank is grenading itself (down 10%) due to its subprime losses.  Babcock and Brown, Australia’s 2nd biggest investment bank, is flooding the market with blood and shit, taking a 10% hit as well.  I don’t have exposure to either of these stocks, but their shitty performances are affecting my holdings.  Fuck you sellers.

Babcock and Brown is something I always wanted to add to my portfolio, and given my large cash position, I’m very tempted to nibble a bit on it considering the stock has panic written all over it.  However, I don’t want my face blown up, so I’ll wait a day or two before forking out the cash to mother market.  It is dirt cheap at $25.3 considering it fell from $32 a week ago.  That said, dirt cheap can get cheaper.

I’ll be lightening up on a bounce if it materialises in the coming days on the all ords.  FWIW, the technicals of all ords looks a lot uglier than that of the US, so I’m maintaining my outlook on the SPX, but I’m gonna be a bit more wary of catching a bottom on the All Ords…it could have more room to fall.

Most yen crosses are pulling back to where they were a few days ago.  I think I’ll step aside for now.  If the low breaks significantly, we’re all doomed for a huge cascade of selling.

Just a reminder people, permabears are fucktards.

Update: I’m lowering my downside target to the February lows for the SPX.  Looks like the bears have more fight in them, so yeah.  Bulls will have to choke on their own vomit for the time being.  In other words, we’re all fucked even though we’re due for a good bounce.  I’d like to say that we’re close to a short term bottom, but I wouldn’t know…

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We have escaped the ‘crash’ scenario now.  I don’t know how much more there is to this correction, whether we’re half way through, or at the end.

Regardless of where we are in the correction, IT IS STILL A BULL MARKET, and all corrections are made for buying.  That said, I expect that we will have another vicious bear attack before Friday, so I’ll have my scattergun and flamethrower ready.

SPX bounce should make it to 1490, so I’ll be dancing with the bears in the meantime looking for a short side scalp near the 1495 or 1500 region on the ESU7.

Looks like the carry trade is back in favor too, although it should pullback a bit soon.

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I’m expecting Monday to bounce from the get go, with perhaps a bottom test in the morning. The All Ords have put in a doji, which suggests the first leg in this decline has ended.

I sincerely hope the market bounces hard here to avoid the crash scenario. Some great bloggers have commented on the fact that we are at a point where we bounce hard or crash. If we crash, I’ll buy, but my existing holdings will be reset back a few months :(.

Anyway, in the short term I’m looking to be a buyer and will keep my risk relative low, but give my positions enough room to overcome the whipsaws.

As for the long term:

One interesting observation is the fact that the US is already in a minor C corrective move, while the All Ords has just completed its minor A corrective move. That may mean the US’s minor ABC move is only a major corrective A move, with the final C move targetting the 1380 region on the SPX. Of course, it will need to first rally to 1490. Alternatively, we might have the bottom in place already right now…I really don’t know. (Elliot wave gibberish, I know)

The All Ords will need to touch 6215 or so before finishing the ABC corrective move near 5820 – 5870 region (hopefully).

I don’t think the bull market is over, and I certainly hope not. I’m still young, and I want my capital to grow to the moon before I retire. The senile old bears are trying to take this away from me and I’ll tear them to pieces if they try. I’ll be buying as soon as I sniff a bottom approaching ;). Let’s just hope the carry traders don’t fucking shit their pants and then sit down while I’m doing my buying….

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Now don’t all panic at once you immature fuckers.  Selling only begets more irrational selling and that’ll cause a crash, and we all don’t want that.

Should this dip be bought? Probably not right now.  Has the bull market ended? No.  Simply put, this is the correction I’ve been waiting for, but have neglected to properly prepare for.  For what it’s worth, the NDX is still in reasonable shape, sitting at 1991, it’s first line of support I mentioned a while ago.  SPX also sitting on solid support at 1485.  If one is to bet on the range holding, then now is the time to buy.  But I think that these areas will fail miserably and we’ll probably go for the first 10% correction for a long time.

I’m lucky however that I’m only 30% invested right now…Will be deploying cash when the dust settles and everything looks rosy again.

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