Weekly Ramblings of an Australian Stock Trader – incorporating ASXweekendtrader.com

Basically there are two kinds of FOREX investing strategies used by the majority of Forex traders,one is Fundamental analysis and the other is Technical analysis. We shall have a closer look at Technical analysis first.

Technical analysis.

We find that Technical analysis is by and large  used by the small and medium size traders.

Technical analysis looks at the various factors that are in reality affecting the market rather than factors that might possibly affect it. Thus the price quoted reflects all the factors that have influenced them. Only market generated facts and figures are taken into account and other factors like the emotions of  fear, hope or any other changes are not even considered.

• Price reflects all actual market movements. That means price includes everything known to the market like supply and demand of foreign exchange, political factors, trade agreements etc. It is not concerned with what resulted in change rather it deals with actual changes. It works on the premiss that price can take only one of the three directions, Upwards,downwards or sideways. [Read more →]

According to a National Australia Bank survey, Australia’s retailers raked in $216 billion last year.

Online shopping made up just $10 billion of that amount.

And only $2.5 billion, or just 1.2%, of all retail spending by Australians went to international websites.

But importantly, overseas buying accounts for 25% of all online retail sales.

If you’re the one who opens the Visa bill at home, then you know online shopping is growing.

NAB estimates web shopping is growing at 30% a year…compared to 3% for traditional “bricks-and-mortar” retailers. [Read more →]

 The stock market is impartial as to whether you are a success or a failure in your share trading. The only person who cares (Apart from your bank manager) should be you.

For it is only by the choices and decisions that you make in the future which will determine your success or demise in the share market.

We will be dealing with realities today and actual truths. No pulling punches or soft soap, just harsh plain facts.

This article is about Choices or Decisions. Call them what you will, but they will determine your future trading habits, and the trading success you may or may not achieve.

For a start I won’t guarantee that after reading this article you will become a “Roaring Success” in your share trading forays into the stock market.

But IF you make the RIGHT Choices and put into practice some of the Choices below, you will be more aware of the pitfalls and traps that await the unwary and untrained trader. And therefore swing the probability of success factor in your favour and thereby minimise the risks also. Plus by learning by your mistakes you will increase your chances of success. [Read more →]

I have come to the conclusion that the market is (dare I say) generally being manipulated/influenced by firstly the large institutions, Secondly by full time professional traders and day traders and the short sellers, and lastly the ensuing panic,fear of the unknown,and the rumours of the media. Which of course results in the share prices tumbling downwards as is the case now.

The general public and the “Mum and Dad” investors are the last to know what is actually happening and invariably the ones that lose out in the long run.

The advantage the Institutions have is the “Millions” of dollars that they have available to use at any given time. This is usually obtained from the public in the first place, in the form of Insurance, Superannuation and Managed Funds etc. Which we, (the general public) all contribute to on a daily basis.

The large advantage they have is the enormous amount of shares they are able to purchase or sell at any given time. [Read more →]

While keeping expenses below revenues seems simple enough, many people today live beyond their means. Due to misguided monetary policy, society has favoured debt accumulation over saving.

And as a strategy, it has worked well for decades. That’s because the return on assets (shares, property, bonds etc) were well in excess of the cost of debt. So leverage worked.
Borrowing at 7 per cent to purchase an asset growing at 10 per cent – or more – is an easy way to make money. And as more people borrowed, the weight of money kept pushing asset prices up. This was particularly the case in residential property – the most leveraged of asset classes.

Reverse Compounding and Property InvestmentsHome loan borrowing costs are around 7 per cent. Assuming you put down a 10 per cent deposit and borrow the rest, you’ll need an annual return of at least 6.3 per cent to keep your head above water. If house prices fall (which is a likely scenario after years of increases) reverse compounding kicks in. [Read more →]

We know it’s an odd thing to say, but right now, we like Europe.

Sure, Greece is on the verge of leaving the euro.

The European Union has only narrowly avoided falling into recession.

And Moody’s Investors Service is set to downgrade several Spanish banks.

Only a fool would exchange ‘safe’ Aussie dollars for ‘risky’ euros. But that’s exactly what we’re asking you to consider today.

Because, as we’ll explain in a moment, this could be the most profitable trade you make in 2012… [Read more →]

Gold a bubble? No chance, says respected Swiss investor Marc Faber.

The reason that people think gold is a bubble, says Faber, is that its current price seems a lot higher than its 1999 price of $252. But despite the significant gains, gold is still not as widely owned as other assets were during past examples of bubbles.

“In 1989, everybody owned Japanese stocks. And in 2000, everybody owned tech stocks. That is the bubble, when the majority of market participants own an asset. I think there are more people that own Apple stock than gold.”

The increase in gold’s price is down to the huge increases in debt levels, not tech-boom-style irrational exuberance.

“We had an explosion of debt, not just government debt, but private sector debt, and an explosion of unfunded liabilities.” [Read more →]

Sometime in the next few weeks we’re going to find out if Greece can afford to stay in the euro. We’re also going to find out if Spain and Italy can afford to leave the euro. Access to credit markets is the key issue. The stigma of default will lock a country out of capital markets. If you don’t have a plan to replace your currency and then devalue it, you’re doomed.

But first, the crisis in Greece didn’t come to a head over night but it can’t be far away. Rival political parties have been unable to form a government. New elections are scheduled for the second week in June. The financial has definitely become political. The people have run out of patience with unsound money and the world built on it.

All that said, the Greeks managed to make a €430 million payment to hold-out creditors last night. Nearly 97% of Greek creditors agreed to the restructuring of the country’s debt in March. That wiped off over €100 billion in Greek debt and resulted in 70% losses for some of the bondholders who accepted the deal. Not all of them did. [Read more →]

In today’s Money Morning, we’ll show a chart that could give you a sneak peek into the future.

When we showed it to our old pal, Sound Money. Sound Investments editor, Greg Canavan, he said, ‘That’s what outright deflation looks like. Savers’ purchasing power grows in terms of financial assets.’

In other words, the value of money rises as asset prices fall.

That’s deflation: The friend of prudent savers. The foe of over-leveraged borrowers…and banks.

In short, when deflation hits, make sure you’re a saver, not an over-leveraged borrower. [Read more →]

We’ll be honest. This falling stock market has us licking our lips.

The S&P/ASX 200 has dropped 6.2% in two weeks.

And yesterday the index had its first 100-point fall since 3 October last year.

The ASX Emerging Companies index has done even worse. It has dropped 17.1% in seven weeks.

Good or Bad News for Small-Cap Investors?That’s bad news if you hold small-cap shares, but great news if you want to buy beaten-down stocks on the cheap. It’s also why we suggest you only invest a small part of your portfolio in these high-risk punts. [Read more →]