ASX Shares Daily – 27th June

By Chris Becker

Another volatile day on Asian markets, but this time in the green, with the ASX200 closing up 0.7% to 4043 points, having a peek just above the short term support of recent weeks, as seen in the chart below (also marked are my medium term system short/tight signals, plus the KC Signal from 1st May that signalled a possible top):

 

We continue to window dress coming into the end of the financial year – how many wash trades are going on right now? For those keeping score, my medium term trading system remains short, whilst my investment allocation system remains “sidelined”.

For those with an eye towards similar historic moves, have a look at the current weekly chart and how it resembles the 2000-2003 bear market, particularly this six week long pause:

Our current predicament - in a downtrend and below 200DMA, all bull moves rejected

2000-2003 bear market had a similar pause before the final trough

A long bow perhaps (I reckon we are seeing an echo of the 2000-03 or the 1988-1997 bear markets), but as I keep saying, no macro, technical/quant or fundamental conditions exist for the start of a new bull market in Australian stocks. Don’t confuse that with a bear market rally or the notion of  “undervalued” or “good prices” – for sure, there are bargains out there. My median estimate of ASX200 value is right on 4000 points for ALL of next year (i.e we are currently at FY12-13 value), although FY13 it is at 4600 points – this is dependent upon earnings growth….

More on that later.

In other Asian markets, the Nikkei 225 was up 0.7%, but more mystery with Chinese markets, with the Hang Seng up 0.8% but the mainland Chinese markets flat or slightly down, with the  Shanghai Comp currently down 0.2% at 2216 points.

On currency markets, the Aussie is holding onto last night’s gains at 1.0063 whilst the Euro/USD cross remains steady, at 1.25 flat. The US Dollar Index (DXY) is also continuing to oscillate around the 82.4 level, whilst my preferred hedge amongst all this volatility – short EURAUD – remains in the money and steady at 1.242:

Gold is proving reluctant to move, again, currently at $1571USD after deflating last night, but remains in a tight trading range as I’ve been explaining in recent weeks. In AUD terms, gold is slipping down, now at $1562AUD per ounce after almost breaching $1600AUD an ounce overnight.   

Finally, in the debt markets today,  Aussie 10 year yields rose slightly, gaining 4 basis points, but still below 3% at 2.967% whilst European bonds have diverged on the open. Spanish and Italian bonds are seeing strong bids (yields down 5 and 6 basis points respectively) whilst German bunds have sold off a bit. Again, like yesterday’s open, there is some hope that the ongoing crisis meetings will resolve – something – so the Euro bourses are being bid up, around 0.3 to 0.6% across the board. Another day in volatility paradise!

Tonight

Dataflow tonight is US centric again, although we will have a follow up to the Italian retail sales with the manufacturing survey very shortly, alongside German CPI print. Later tonight US durable goods orders will be very closely watched –  with the consensus crowd looking for a positive 0.4% print on new orders.

Don’t miss the updates when my colleague Greg McKenna, who has taken over MacroBusiness Morning, will report overnight market moves and data analysis.

Til then, you can find me on Twitter here and I’ll catch you tomorrow afternoon.

 

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Comments

  1. General Disarray

    Thanks for the trading day update, Prince.

    I actually signed up with twitter a few days back and followed you – within 20 minutes I was being followed by 2 accounts, one called “Not MacroBusiness” the other “Alex Barton” from the Australian Property Forum. They’re keeping tabs on you TP, it seems bit bunny boiler, IMO.

    • Yeah I know, they’re hilarious! Another MB reader sent me a screenshot recently of their work (I actually have their nests blocked on my computers, although we do track them when they visit the blog….)- I havent laughed that hard in ages – oh for a proper “Moriarty” type foe.

      Thanks for following, I don’t tweet much these days, too busy “quanting” data…but its interesting nonetheless.

    • JacksonMEMBER

      Unbelievable. Someone better tell RS so he can start including this in his analysis of why our productivity is heading south.

      • This is the best productivity tool I’ve found: Stayfocusd for Google Chrome (Thats a review, the link is in there)

        It allows you to set the max no of minutes during day. I limit FB and some blogs that just upset me (but enticing to read) to 5 mins, and entire sites (especially ebay, but I unblock it when the AUD goes above parity….), in particular the trollnest.

        I also use Rescuetime to evaluate how much time I spend emailing/commenting/Word/Excel jockeying. When you work 2 full time job equivalents, need to be as productive as possible…

    • That happened to me too! Ended up blocking them, very creepy. Those guys musn’t have much of a life.

      • What’s funny is it’s backfiring – when you criticise someone thoughtfully and respectfully, it comes across as helpful, expands the discussion and people will sit up and pay attention.

        When you just personally attack, verbally abuse, outright lie and impersonate someone’s professional image, no matter what you have to say or any valid criticisms you may have, are completely crowded out and you are rightly ignored and labelled cranks, cowards and the other unmentionable “c” words…..

        That’s why we laugh at them here in the MB office – and the reason why, apart from recording their actions for posterity (we know who they are), the best offense is simply ignore and let them shoot themselves in the foot…

  2. I assume the bull in a bullfight photo was chosen to send readers the message “he’s still alive and fighting, not yet mortally wounded, but you know his time is almost up”?

    • Thought I’d change it up a bit – market goes up: bull. Market goes down: bear

      Bed goes up
      Bed goes down
      Bed goes up
      Bed goes down

      …something something…

      • I’d prefer spread-eagled whilst the w*nker brokers are giving not trying to get their necks stretched.

        DFM and I chatted today and we agree (I think) that long may you analyse.

        I’m flat, cashed, happy and looking for audjpy?

        • PS I nailed AUD today on my 100pip call fopm 9980 but as a quant meet fib guy I’m SGT Shultz. I see nothing, which I find strange as a 4Hr charts swing trader.

          Ideas gents?

  3. We continue to window dress coming into the end of the financial year – how many wash trades are going on right now?

    We moved a billion or so the other day, just shuffling things around before the years out…