Trading Day: RBA disappoints

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Not the Prince

Trading Day covers the relevant moves in the Asian stock, commodity, debt and currency markets including a review of the top 8 Australian stocks – the top 4 miners and banks, highlighting trading ideas and investment opportunities. Remember to read “Trading Week“, published each Saturday morning, to put these events and ideas in context.

Again, I’m going to post an intraday chart to show you what happened when the RBA disappointed by holding rates – as one trader on Twitter put it: equities throwing their toys out the pram. I wanna rate cut!

You can clearly see the impact at 2.30pm when the news came out – the S&P/ASX200 slumping at first, almost in the red before getting bid up and closing a scant 7 points up at 4337 points. (note the “L” marked on the charts is my one and only long entry, using a very small amount of capital in my trading system)

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Other Asian markets were mixed today, with Japan’s Nikkei 225 down 0.6% to 10050 points: (Disclosure: I’m still long but have tightened my position to 10000 points), the NZX50 the same, down 0.6% at 3473 points, whilst the volatile Hang Seng is currently up 0.9% at 20702 points. Note the Shanghai Composite was closed today and won’t reopen til Thursday. The Hang Seng will close on Wednesday and Thursday as well.

The AUD which had been gaining in the last few days, dropped around 0.4 cents against the USD on the rate hold news – as it was more than likely that a cut in May is a certainty – currently at 1.039 against the USD:

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Gold after starting well, finished flat for the Asian session, now at $1678USD an ounce before the start of the London trade. In AUD terms it was up $5 to $1613 per ounce.

I’m keeping an eye on the AUD gold price – there could be a long opportunity here brewing even better than following the USD spot price (using the ETF GOLD, which I covered here)

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The ASX8 

I follow the ASX8, the top four banks (ANZ/CBA/NAB/WBC) and miners (BHP/RIO/NCM/WPL), very closely as they are effectively the entire market – the Houses and Holes. Add Telstra (TLS) and you’ve pretty much covered the major stars (or dogs, depending on your point of view) of the market, as the ASX8 is the ASX50 – which follows the ASX200 extremely closely on any chart.

Only a few to go over today, BHP-Billiton broke out above its short term downtrend yesterday, and gained slightly today, one to watch as BHP is basically the index:

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I said yesterday that Rio-Tinto (RIO) looks a better proposition than BHP, in my opinion, and it went up nearly 1% today building on yesterdays rise. Note the series of higher lows on the daily chart – this is bullish, short term, and probably a repeat on my last trade (L=long, E=exit):

And finally, Telstra (TLS), which seems to have found a base after its correction and going ex-dividend from its blowoff in February. I had a long signal recently as the telecom stock passed the $3.3o mark – can it keep going given the dividend appeal has gone? Note it approached its 200 day moving average but is well above – bottom pickers (I call the monkeys, as opposed to bears and bulls…or foxes) out in force?

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The Futures

The futures are looking mixed going into the European session. US and Euro markets are both pointing to so-so opens, whilst the local market is down a few points at 4330 points. The market-moving data to watch tonight is Euro-centric to start with, with EMU PPI numbers, but quickly moves to the US, with Redbook, Factory Orders and the FOMC Minutes being released. And you thought our pundits went all gaga over central bank minutes….

Let’s see what happens in Market Morning, my daily wrap up of the major macro markets to start the Asian session, tomorrow morning.

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