Friday, May 7, 2010

Panicking? That's so last night. Fri May 7

 It's been a buy the dip day with the overnight Spi indicating a drop of about 3.5% which was way too much. The US is about 8 trading days behind most other markets and they were having a catch up. It's 12.25 pm and our market is down 1.5% now amid lots of interesting political and financial events. I'm watching the UK election results come through as I write.
The selling in Cba continued although it looks like it might have hit a short term bottom about half an hour ago. The rest of the banks have been much the same as the bank carry trade unwinds. I've been buying the Spi and some of the hardest hit on my watchlist for short term trading and that's been pretty good so far.
The feature trade today is in One Steel and it's essentially the same story as for Bsl and Ozl this week. The opening was overdone and I bought at 317 with decent support just above and below 300. It's up to 330 now but probably still reasonable buying.













Actually, I've bought another of these patterns in Qantas just now, at 257 and 258, as it has made a marginal new low and reversed, raising the possibility of an island reversal. There's more support around this level from further back, last November and December.
2.18 Quite a day with the market not far from breakeven, down just 22 points recently, with the early lows having been down about 146 points. I'm pretty long but cautiously so with the Spi showing signs of stalling so that I'm getting out of shorter term intraday trades. 

3.20 An interesting theme: for the first half of the day resources outperformed, since when they've been steady while the rest of the market has taken the baton.

4.18 The bubble burst at around 2.30pm and although I got out of some speculative stuff, the fall was bigger than I expected so I gave back some profits. Still happy to be long a few beaten down stocks which are hovering around support but I'm also aware that I've got to be quick with these - either to take a quick turn or stop out.
Overall the index was down 92 points or 2% giving us the weakest close since last September.

Also....not panicking is so this morning.

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