The eye of the beholder. Tue Jul 6

It's not looking so beautiful to me because I'm long a couple of stocks having got drawn in to picking turning points. The market is still grinding down on light volume and I'm close to stopping out of Bsl.
I can see that the market drop might be incomplete but in the short term, there's probably not too far to go.
There's not a lot else to add, we're responding to weakness in Japan and Korea this morning while the US overnight futures have slipped close to 1%. I find it hard to take the US futures seriously as the volume is probably tragically light.

Of interest yesterday were two takeover bids for CSR's Sucrogen business and, relevant to me, a takeover bid of 620 for Centennial coal. I was long Cey for a day or two last week but although the possibility of a bid had arisen recently, the speed at which it came was surprising. The point to draw from this, when there's much negativity about a double dip recession, is that Australian resource stocks are still in demand.

2.02 There's been a decent turnaround from early lows and the Xjo index is up 15 points. The market is waiting for a rate decision from the RBA and there are faint hopes of a cut, an acknowledgement that the May rise of 25bp was misjudged.
Real estate has stalled locally, metals prices have softened, retail sales are weak and corporate confidence is declining so there are a few reasons to ease. It probably depends on how willing the RBA is to eat humble pie. They're not terribly doctrinaire and don't seem to sit on their dignity too much, so a cut must be close, even if we have to wait until June.
It seems unfair to be selling off so hard on recession fears without the comfort of reduced interest rates!

3.09 A cut was not forthcoming but an ackowledgement of the slowdown from the RBA has been enough to help the index rise as much as 1% before easing fractionally.
Bsl has recovered which is good for me, while Cgf has had a good day, up 17 to 357.
Ozl has given a buy signal on a push through 102 and I'm hoping for some weakness which might allow me to buy at 102 because I could have gone earlier on this one. If I do get long then I'm going to have to put my stop below Friday's low of 98 because I missed a chance to buy at around 99 or 100 earlier today. I was reasonably confident that we'd seen the low and didn't need to see the break through 102. Still, it's a more convincing signal now with the confirmation of strength.

4.13 Here's a chart of the Xjo. We had a 96 point rally from the early low to the close on the high. The Spi has had a 106 point reversal as of now. Quite bullish in the short term, I think.