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Archive for the ‘outlook’ Category

Incitec Pivot is really kicking some arse despite the lackluster performance from all other sectors. There’s no doubt that the agricultural chemicals (and gold and energy) are kicking it.

Despite my cheering for IPL, I think it is running way too hard at the moment (not that I’m complaining 🙂 ), so I’ve decided to sell down a third of my holdings purchased near $93 for $127.

I’m holding the rest until I’m either stopped out – or it reaches my target.  There’s two points of potential resistance for IPL at the current point in time.  One is $126, the other is $150.  Both are based on technicals and not some arbitrary number.  Although I think IPL will continue to soar in the first quarter or maybe even first half of 2008, I think it’ll take a huge dive in the second half – probably after the latter target is reached.

Aside from IPL, I’m looking for an entry point into JET. The entry price I’m looking at is 3.3-3.4, depending on the circumstances of course.  NUF also looks fairly interesting.

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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. :/

So what is my overall tip for 2008? Do your own research.

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

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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:

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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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Based on monthly pivots, the SPX is targetting a retest of 1550, while the Australian All Ords is also heading for a retest of the highs at around 6850. As always, click on the charts to enlarge it.

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Another interesting chart I’ll post is in regards to the advance/decline line against the All Ordinaries. As you can see in the chart below, the market internals have declined significantly despite the market appearing to hold up well. This doesn’t necessarily mean the market will collapse soon, but it does warn us that the market environment ahead will be different to the one we’ve had for the past few years. (To access a/d data, go to http://sttc.net.au/~stever/).

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Market Outlook

I think the ES might be setting up for a rally up to 1465 or so. After that, I think we might get another scary drop in December to SPX 13XX.

I’ve mainly been sitting on cash.  I’m just not good enough/experienced enough to trade this market yet.  Burned a few times on the long side, too scary to start on the short side too.  Therefore, capital preservation trumps all.

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Outlook for 20/11

There’ll probably be a gap up, a fill, some panic, before a good close in the US.

I’m still trying to play the bottom picking game and I suspect the 1410-1420 area will provide decent support. What I don’t like so far about the price action is the lack of fear and panic (myself included 🙂 ).

Update: Well, the panic part is happening so far I guess. I’m looking to go long near the low 1420s on the ES. The yen is going up dramatically as the market’s cracking, which I guess is good for the bulls.

Update: Went long at 1425.  Got a 10 stop on it.  Cross my fingers and hope the washout is over and we can rally now for real.

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Weekend Update

Update 19/11: Yen is strengthening again. Seems too many people were leaning towards the bull camp too quickly (myself included). I wouldn’t be surprised to see some sort of test of the recent lows before the rally. SPX 1450 and 1438 are currently the numbers to watch. The EUR/USD is forming a triangle as well. Yen pairs are forming some sort of triangle partern too.

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So far 1450 (monthly S2) is holding up fairly well: (Click on chart). If 1450 is indeed an intermediate bottom, the upside target would be 1500~.

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There are several signs that point to a decent rally coming up. One hint comes from the currency market, as the AUD/JPY closed above its downtrend line on Friday:

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Other yen pairs like EUR/JPY, GBP/JPY etc are also in similar positions.

I’ll be looking to looking to go long EUR/JPY or AUD/JPY this week depending on how it behaves on Monday.

I’m also toying with the idea of shorting EUR/USD. As long as it holds below 1.4675 on a daily closing basis, I think the USD will bounce back strongly while EUR will pullback below 1.4530 by the end of the month.
Anyway, here are some charts of EUR/USD:

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I’m still holding the belief that the market will probably bottom somewhere around SPX 1450 (or 1438/1433 on an intraday basis). There is a possibility that it might hit S3 at 1414, but I assign that a low possibility right now.

As such, I’ll be looking for bottoming action in the coming days, and will be attempting to buy the dips at select areas on Monday for a hard rally upwards.

In summary, I’m looking for a turn in this decline. My guess this bottoming process may last until the end of Nov before a strong rally going through December (possibly to new highs, who knows).

I will also be looking for a possible bottom in the carry trade currencies, namely AUD/JPY.

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