The unwind of the short USD, long commodities trade resumed in earnest overnight. The US indices fell around 1% but commodities were hard hit. The outcome for me is not great in RSG, which is down 3 to 105, or WSA, down 29 to 632. Fortunately, my book is fairly conservative because the picture is not clear. I'd decided that there was a good chance of some short term upside in the index but after that....
Anyway, that didn't work. The Asx 200 is down 60 after 54 minutes as it traces out a choppy retracement from a low of down 68. The usual course of these moves is a tentative bounce about now, a slip down to a new low and then the chance of a better bounce. I'm hoping that we've already seen the low and have bought a few extra WSA at 635 because they're close to support and are probably due an intraday retracement. I did sell about half of my long out in the 650s and 660s yesterday so I'm just hanging in on this trade. It doesn't look great on a daily basis though.
11.21 The index is still edging higher so it's looking increasingly possible that the day's low has been seen. The XJO chart also shows a marginally lower low and rejection of that level so there's local bargain hunting. It makes sense given that local stocks are pricing in a continuation of the current headwinds and still aren't bad value. That won't help us if overseas sellers keep dumping what for them is also a successful currency play. However, it does suggest that the gap opens are buying opportunities while that phase is occurring.
11.52 The first thought was the right one. The Asx 200 has slipped to a new low after the first rally attempt. Here's a 5 minute chart.
1.07 The market is recovering and the Asx 200 is sitting at 4715, a loss of 65 points. I'm holding onto most of my positions as Asian markets are performing a little better, US futures are flat and the AUD has slipped almost a cent on weaker than expected jobs numbers.
2.01 I have to go out for an hour or so which is a shame because the market is just hotting up as we reach the heady heights of 4725.
4.07 Approaching the matchout and down 55 was about as good as it got. There was a marginal new low just before 4 pm and I sold out the extra stock in WSA at 629 although I'm still in the balance from earlier as well as my long in RSG. In both cases, I could easily stop out but am prepared to risk a bit more.
The final result is a drop of 84 points to 4696. After 9 consecutive winning days for me, a fairly chunky losing day.
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