Trading Day: 14th July

The S&P/ASX 200 fell slightly on the open, after digesting QE-easiness from overnight markets. The market has fallen further and is now 0.57% or 25 points lower just after midday to 4489 points.

Other Asian markets are also down slightly, with the Nikkei 225 down 0.37% at 9926 points, and the Hang Seng down 0.22% at 21,878 points.

Other risk assets are mixed, with the AUD steady after shooting up overnight, now at 1.0757 against the USD, whilst gold consolidates above its new record high, now at $1586 USD an ounce. WTI crude is steady at $98.07 USD per barrel but also was up on last night.

Movers and Shakers
It’s another red day across the board. The banks are being sold off, with ANZ down 0.8%, CBA down over 1.1% and NAB down 1.2% with QBC down 1% – is this because of the David Jones “shock” profit downgrade? Who knows – but timid shoppers equals timid borrowers (or is the causality the other way around?)

BHP is dow 0.3% at $43.48 but RIO has heavier falls, down 0.73% at $80.22

The winners amongst ASX200 stocks include Sundance (SDL) up 4%, and Platinum Australia (PLA) also up 4% – in fact all minor miners/resources stocks seem to be pegging back on the QE-easy speculation.

The biggest losers are retail stocks, all getting smashed. David Jones (DJS) is down nearly 16%, Pacific Brands (PBG) down 4%, Harvey Norman (HVN) dow 4%, JB Hi-Fi (JBH) also down 4%. Macquarie (MQG) continues to be shorted, down nearly 4% as well.

Daily Chart
The daily chart shows the recent correction is back down to critical support at just below 4500 points (and depending on your timeframe, technically at 4475 or 4450). Direction is stalling though – this is not a clear downtrend as yet and the waters are muddied by The Bernank, as usual. This is a bottom pickers market for long-only investors, but remember only monkeys pick real bottoms – this could be like catching a falling knife.

My long term system is still displaying “don’t go long here” signals with a confirmation if weekly price closes below the 4475 point level changing my market stance from “sideways market” to “bear market”.

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  1. I was just about to right that…

    The ASX200 almost always does its big moves from 2pm onwards – and this move is down for now – just hovering at 4475 or so.

    I agree – below 4450 and I up my shorts (sic) significantly.

    The next target is 4200, or only 6% away.

  2. Julia Gillard has added so much extra downside to Australia.

    She will by herself push Australia close to recession.

      • Maybe – but a carbon tax + a flood Levy + uncertainty = downside.

        Noted that Tony Windsor & Co will get carbon credits for all their farm land. Large corps will be paying them double for what they own.

        Anyway, mkt is getting smashed. If it bounces off these lows, (a double bottom?). But looks like the strength is very much down.

    • I don’t think that Gillard will actually push us in to recession.

      I do think that we will get one (largely due to our private debt levels and dependence on constantly increasing house prices) and she will definitely be blamed for it.

  3. She will get blamed, but the electorate has a short memory.
    It took 16 years for Labor to run NSW into the ground. Its taken her and Rudd a little over 3 years to reach the same level.

    The sooner she is gone, the better.