The Australian market is up 13 points at the end of the first hour of trading and I feel that there's a disconnect between what's happening with bond and commodity prices and the action in our market. It's true that the fear of a Chinese rate rise - strong expectations for Saturday - has been hindering our performance but there's a good chance that it's well and truly priced in and Chinese growth is not going to be dead in the water afterwards.
The Asx 200 is still a few hundred points below the April peak and not much above the June and August highs and yet, in that time, the world view has moved from there being a strong chance of a double dip recession to the likelihood of muted but much better than expected growth in Europe and the Americas with Asia not slowing as thought.
I've been getting out of Avo at 322. It has been a tricky ride here and while I took some profit at 342, it wasn't enough, so I'll just be getting out for about square here.
Otherwise, my short in Ipl is starting to look ok.
Karoon is back up at 750 while Western Areas hasn't done much but looks like it has had a tight, bullish congestion on the 60 minute chart so I've bought more at 620.
11.25 Qan and Tse are looking reasonably positive but I'm reluctant to buy them because I think there could be some fast moves in the miners and I don't want to allocate my cash to slow rallies. I'm also taken with Aax but it's being dumped from the Asx 200 shortly due to its problems last year, so while the tide might have turned on an operational level, the stock is being punished for past misdemeanors.
I've bought more Karoon in the high 740s. The stop for these is around 695 so it's quite risky but even if it's just a corrective rally then there might be a quick dollar in it.
11.47 The market has shot up since 11 am and is up 44 points. I've bought some Fortescue at 661 in my hunt for a high beta trade. Not awesome but I'll use 640 as a stop. It looks like a grudging sell off over the last few weeks and it's a decent proxy for growth for those who want to play that story.
12.02 I forgot to mention that the jobs numbers were much better than expected which is seen as positive in the context of a recently slowing economy. The finance stations are attributing the market rise to this but the market was already up 25 before the figures came through.
12.24 I've changed my mind on Qantas and paid 270 when I could have got set at 266 earlier. However, it's not too late and the advantage is that it has now cleared yesterday's high and is just short of creating a buy signal with a trade at 271. There have also been some big lines of stock going through at 269. It seems like some good buying finding a seller because 269 is up 5 on the day. My stop is around 261 with hopes of a quick move to the mid 280s. The risk/reward could be stronger but the pattern itself is impressive.
The only position I'm hanging on for is Lynas which has stopped the rot but hasn't turned.
The Hang Seng is up around 0.6% in early trading so there's nothing there to knock us back down.
3.16 Still holding onto most of the gains. No new positions and my existing ones are little changed over the last 2 or 3 hours.
4.12 The index rose 41 points to 4741. It was a good performance after looking pretty shaky yesterday and I'm hoping that it's a sign that sentiment is finally improving.
Overseas buyers usually provide the swing factor in the Australian market so if a couple of hedge funds decide to increase their weight in risk assets then we could see a rush to the miners.
Karoon was the best on the day while I rushed into Fortescue and could have got it cheaper once the market started consolidating the early gains. It closed at 657.
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