Equities Commentary

Market Murmurs
Posted By:Gary Glover On:26/03/2012 09:08
If my timing is correct this could be the week that sees the major support of the $34 region broken.  It has been consolidating just above the previous swing low of $34.05. 

With recent Chinese data showing the Chinese economy is starting to slow up and representatives for BHP and RIO both commenting in the last week that they feel demand is flattening for alot of commodities the sector could remain under pressure.  Has the market already priced this in or has it had its blinkers on thinking the resources boom can continue on?

I think only in the last month that market strategists have begun to question this possibility, mainly on the back of improved US data which has bullish implications long term for the US dollar and US bond yields.  Commodities don't normally run hand in hand with the $US dollar.  
For BHP, normally if we bounce of a low we are going to break, an attempted rally for no more than two weeks can occur before eventually breaking it.  Some sort of shakedown is possible too, where you see a sharp rally fail and break back hard.  We haven't had this but we have and the attempted non bounce for two weeks off the low.  It could be time. 
Computershare and QBE Insurance are two companies that will benefit greatly fundamentally from a bullish move in US bond yields and I believe the sharp move up in recent weeks for these stocks illustrates that thinking.   No need to chase these in this sort of sideways market but I would be looking to add these to any portfolios on any reasonable pullback.

 

Daily Murmur
Posted By:Gary Glover On:23/09/2011 16:24
XJO
We have mentioned that Friday the 23rdof September would make a great low from a timing perspective.  It would replicate previous other cycles and mark our first higher low.  Attached is todays XJO set up and also we have attached in pdf, a document copy of 1998 low – a similar looking set up and one that has occurred a few times in the last 30 years.  17 trading days up (22 cal days) and 15 trading days down (45 cal day) low.  These are very common set ups and timing tells me this could be a sharp V shaped low.  Feels a bit scary to be buying here but thats how all good lows should feel.  We have mirrored this move exactly in the same number of days.  No one is expecting a sharp bounce from here, so that is always a good reason why it may come. 

 

Daily Murmur 25/08/11
Posted By:Gary Glover On:25/08/2011 16:39
Gold has been running hot for quite some time.  I think this is one of the most crowded trades in the market so it is very vulnerable for a large correction in my opinion.  I think most of the commodities have started to roll over so Gold was destined to follow.  I believe this could be a terminal move and a larger deeper fall is likely, possibly similar to what happened to Silver recently.  I noticed the monthly could develop a massive shooting star pattern which is extremely bearish longer term and for the short term gann traders, the recent high was exactly 144 days from the previous high.

 

Daily Murmur 28/07/11
Posted By:Gary Glover On:28/07/2011 08:45
RIO has recently rallied 8 days up after following an impulsive move down that lasted only 4 days.  This looks like some sort of consolidation and should move lower to retest the recent lows.
The low volume on the climb shows a lack of commitment from the buyers so we favour a move lower from here.  A move above yesterday’s high of 83.33 would cause us to reassess our position.
Markets often trade 1:1 or 2:1 in terms of days up vs down, so 8 vs 4 is a common set up.

RIO - a strategy we looked at yesterday  
An options trade to consider is a  RIO Bear Put Spread
B RIO Sep 82.01P @ 2.22
S RIO Sep 76.01P @ 0.73                cost 1.49 / 6.00 spread
 
Max loss = 1.49
Max gain = 4.51                 4:1 risk reward
B/even = 80.52
Max profit if RIO closes below 76.01 by September 29

 

Daily Murmur 17/06/11
Posted By:Gary Glover On:17/06/2011 10:17

Although we covered this in the stockwatch video this week, I thought it pertinent to cover this stock again.  These blow off type of trends (vertical markets) all end the same way, with a 90 day last gasp move.  The last couple of days tells me time is up and also it has struggled to go to a new high the last two days which indicates it has run out of puff. 

Once this breaks lower the first stop is the last swing low before the last drive which is $12.00 in this case.  I think you will surprised at how fast these things normally fall after these moves complete.  I am expecting a fast move down from here.

 

 

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About Me

Gary Glover

Gary Glover

Senior Client Adviser 
Equities and Derivatives

Gary has had over 13 years experience in the financial markets.  Most of his experience is as a stockbroker specializing in Equities and Derivatives with some of Australia’s largest retail stockbrokers.  He had over two years direct trading experience, operating as a full time professional trader for himself after spending time as an Institutional Proprietary Trader.
 
Gary presents ‘Stockwatch’ for the Finance News Network each Wednesday Morning and is a regular on Sky Business programs “Your Money Your Call” and “Market Moves”.  He holds a Bachelor of Business, is RG146 Compliant in Securities, Derivatives and Margin Lending and is an Accredited Derivatives Adviser.
 

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