Too cautious. Mon Aug 16

I think the market is too cautious. After the hoped for rally in the US failed to appear we've quickly unwound most of Friday's gains helped by Cba going ex-dividend. We fell pretty hard last week and it's worth remembering that our economy is a long way from the basket case that is the US, our valuations are cheaper and we're in the swing of a pretty good earnings season with Bsl, Llc and Ncm all reporting positively today, for example.
I still think we've probably seen a high recently but in the light of the points above, there's little scope for further serious weakness barring overseas shocks.
Since the Xjo fell back to its lows in early July, the chart has developed much more of a trading range look about it.

1.22 My stocks, all long, are mixed today. I've added one more long too. This is in Qantas and I'm buying a pullback in a reasonable uptrend. The last swing ran from 225 to 269 and after briefly touching 242 this morning the stock has steadied. I'm long at 247.

Overall, my dollar exposure to the market is still low and I'm essentially waiting to put on a few short positions. On the day the Xjo index has bounced back somewhat as the Shanghai market is up on good profit reports and Hong Kong is only marginally down.

3.24 Just read a story on FnArena saying that, 30% of the way through, the reporting season is slightly disappointing. My take is that expectations were even lower and most companies are talking down future prospects but reporting reasonably well. They're hosing down expectations in a textbook way.

The market is down just 12 points now.

4.11 Down 0.5% by the close but the real story is Chinese markets which are kicking on again. Here's the Shanghai index chart. It looks like a short term push to a new high is on the cards after a minor a-b-c retracement.

It's a more bullish chart than that of the Xjo, with less overlap, but encouraging on the long side because we generally track it quite closely.