ASX newbie

The Materials Sector of the S&P/ASX 200 (ASX:XMJ) has experienced a strong correction over the last 2 months, between May 23 and July 25.

Between the high of May and the low of July, the XMJ index declined by more than 24%. Currently the index is trading on the edge. The next few weeks should deliver clues regarding the future direction of the global equity markets.

Today the RBA is expected to leave interest rates on hold, despite signs the economy is slowing. But if it gives any clues as to an interest rate cut, investors may soon be running to their brokers.

In other words, it’d be bullish for shares. And the market could very well favour the Materials Sector.

That wouldn’t mean much to us…but the charts show the index is ready for a bounce. Have a look at a weekly chart.

The price action has reached the long-term support line. That’s academic. This support line has been tested and validated several times (points B, C and D).

Let’s switch to a daily short-term chart now.

The technical indicators argue for a bounce back…and hey… it has probably already started.

Continue reading ‘The Next ASX Sector to Bounce.’

The market is having a shocker - down 96 hitting a two year low. The SFE Futures suggested a 44 point fall. It looks like the Resources bubble is bursting today.

Resources pummeled after steep falls in energy and commodity prices overnight – down 6.1% - with BHP down 6.4% and RIO 5.6%. Property Trusts also struggling – down 2.2%. Financials started down but now up 0.7%.

Dow Down 42. Up 56 at best. Down 105 at worst.2 stocks down for every 1 up. 6 of the 10 sectors now more than 20% off their highs. Oil price and CRB commodities index fell – down 3% and 3.4%.

Energy and resources down to 6-month lows – down 4.9% and 4.2% - speculation of a large hedge fund liquidating positions in these sectors. Freeport-McMoran down 12%. Tesoro and Valero – two biggest US refiners – fell 42% and 38%. Range resources – big gas producer – fell 43%. Exxon Mobil down 3.9%.

Transport down 0.8% despite the fall in oil prices. Only consumer discretionary, consumer staple and healthcare rose – up 0.5%, 1.2% and 1.3%.

Financials finished down 1.3% (was down 2.9% at worst). Oppenheimer’s Meredith Whitney told CNBC that the market turmoil is “far from over and that home prices will fall much further than people expect”. Citigroup reported its first loss since 2005 – biggest US credit card lender lost $176m in the 2Q on repackaged credit-card securities.

Price fell 0.21%. Bank of America down 2.13% and Wachovia down 9.9% as broker recommends selling their stock. Washington Mutual down 8.5%. London based HSBC posted 1H 08 profit down 29% due to losses on US subprime. Price fell 1%. June personal spending better than expected but higher than expected PCE price inflation offset any enthusiasm. Factory orders were more healthy than expected.

• Both BHP and RIO down in ADR form overnight, 3.74% and 5.69% respectively. BHP down 220c to 3614c. RIO down 603c to 11207c.

• Metals all down overnight – Both Copper and Zinc down 4.2%, Zinc down 1.84% and Nickel down 1.5%. Oz minerals down 18c to 170c.

• Oil pricedown $3.58 to $121.45 – a 3 month low – on the back of rising OPEC outlook. Oil traded below $120 for the first time since May. Woodside down 301c to 5099c.

• Gold down $8.90 to $900.10. Newcrest down 259c to 2714c.
• US Bonds down with the 10 year yield up to 3.97% from 3.94%

Continue reading ‘Midday Market Roundup.’

We regret there will be no data today as our computers are being upgraded.This is all part of the process of changes that are taking place with Asxnewbie

Rest assured that things will be back to normal tomorrow.(We Hope!)

This was contributed by “PLAT”a very popular trader who is also one of the main contributors to “Topstocks.”

Topstocks are still offering a “Free Pro “account for one month with no strings attached. You can get there by clicking on the link provided. 25,000 Plus members can’t be wrong. So do yourself a favour and see for yourself.

WELCOME

Morning T$
We all can learn something new every day ,my rant today is about just that.
In bearish markets as we are now in it`e easy to tag along with the herd and think all over Rover.

But there is another approach ,any one will agree that sometime it will change ,in fairness T$ has been looking at that time scale through various posters.[on different threads.]
OK still with me ,good

Now we are looking at newbies in this post ,most will be strapped for cash and thinking another avenue of making a dollar closed down ,busy just trying to salvage some back.

That’s when logic steps in .

If you have been chasing your tail trading trying to pick a winner in this market chances are your worth in $ in the market has gone South.

Therefore look at it a different way get positive research in earnest look for just one stock that has future growth written all over it.
One that has been marked down for no the reason other than the general market sentiment right now.

Make sure as best you can try for a $4K holding and lock in do not trade and try for 50% gain then go for another.

Continue reading ‘Develop a Positive Attitude to the Market.’

This was contributed by “Ingot54″a professional trader who is also one of the popular contributors to “Topstocks.”
Topstocks are still offering a “Free Pro “account for one month with no strings attached. You can get there by clicking on the link provided. 25,000 Plus members can’t be wrong. So do yourself a favour and see for yourself.

Here are some Trading System Ideas for you. This link is a start :

http://www.incrediblecharts.com/technical/reading_the_market.htm

Here:

Market Risk is 66%
Sector Risk is 24%
Stock Risk is 10%

In other words, Trade with the TREND first, SECTOR secondly, and worry about the right STOCK last.

The rest is entry, time in the market (time frame), and exit.

You will need quality stocks, so the ASX 200 would be a good place to start - the Fundamentals should already be pretty good. But do not trust them - check out the debt: equity ratios etc for yourself - remember ION and SGW? I don’t care who says otherwise, you need to know that the stock will be there for at least the time you will be in the market!

Volatility will be your own personal preference. Some people prefer stocks that move up with a bit of speed, when they decide to move. I find the stocks in the price range 20c to $3 will give plenty to choose from in the “sports” (rocket) category. Personally I prefer the elephants in the ASX Top20.

Use the time proven MACD with histogram, as one indicator to tell when to enter the trade. You can use both daily and weekly MACD, both set at 26-12-9 periods.

Continue reading ‘Some Trading System Ideas.’

The Australian economy is in danger of slowing to the point where it drops into what’s called a growth recession, where a weak and sluggish domestic economy is only supported by the still strong export sector, thanks to rising prices for exports of iron ore, coking and thermal coal, oil and gas.

Some economists reckon the chances of this happening leapt this week from around 5% to 40% because of the sharper than expected slowing in June for private credit, building approvals and retail sales.

There’s now growing concern that economic growth, which was running at 3.7% in the March quarter, might have contracted much more sharply than expected in the June quarter.

The strong bounce in the trade figures will help cushion the blow, as will better conditions in rural Australia, but the rest of the economy is tanking.

The National Australia Bank’s quarterly business survey at the start of the weak picked up the fact that June was a miserable month for any business involved in consuming, but it couldn’t have anticipated the worst retail sales performance for six years, at two year low for building approvals (and more in NSW where the number of approvals was the lowest for decades).

It saw domestic non-mining, non-farm growth hitting 1% next year. Judging by the retail sales, credit and building approvals, that level could be reached sooner than the NAB thinks.

The only bright spot is our trade performance which continues to rebound as higher oil, gas, iron ore and coal export prices cascade through the trade account.

But there’s even a small niggle about that. It’s horribly concentrated in the iron and steel industry and in energy: and both could be hurt by slowing world demand and economies turning down.

But the iron and steel industry, from mine to production and processing, is looking like an emerging bubble, given the bullishness of the outlook by BHP Billiton, Rio Tinto, AcelorMittal (the world’s biggest steel group) and by two big deals in North America in the past 10 days (see accompanying story).

Continue reading ‘Economy Slumping: Rate Cut Needed?’

A list of companies to record an initial or increase in substantial shareholdings:
Queensland Gas again increased its holding in Roma Petroleum by a further 15.6 million shares bringing its total up to 56%.

* Suncorp-Metway Ltd increased its interest in Macquarie
Communications Infrastructure Group on July 29 from 31.2 million (6.1pc)
to 38.2 million stapled securities (7.3pc).

* Ausbil Dexia Ltd increased its interest in David Jones Ltd on
July 29 from 30.1 million (6.3pc) to 35.9 million shares (7.4pc).

* Concord Capital increased its interest in Becton Property
Group on July 29 from 14 million (8.4pc) to 15.8 million stapled
securities (9.5pc).

* Australian Unity Strategic Holdings Pty Ltd became a
substantial holder in Calliden Group Ltd on July 31 with 30.1 million
shares (13pc).

* MMC Asset Management Ltd and associated entities increased its
interest in Dark Blue Sea Ltd on July 28 from 13.7 million (15.9pc) to
13.4 million shares (17.1pc).

* Lazard Asset Management Pacific Co became a substantial holder
in Tabcorp Holdings Ltd on July 29 with 27.2 million shares (5.2pc).

* Deutsche Bank AG became a substantial holder in Coalworks Ltd
on June 26 with 7 million shares (6.8pc).

* Perpetual Ltd increased its interest in Ansell Ltd on July 30
from 9.9 million (7.3pc) to 11.3 million shares (8.3pc).

* Macquarie Group Ltd increased its interest in Macquarie
Infrastructure Group on July 30 from 389.9 million (16.2pc) to 415.2
million stapled securities (17.3pc).

Continue reading ‘Change in Substantial Shareholdings:’

Today you will find a new page called “Forex Tickers.” In it you will find “Live Currency Rates,” “Live Forex Charts” and “Live Market News Forex.”All powered and updated by RetailFX.

This is just a sample of what amenities will become available as time progresses.Our goal at Asxnewbie continues to be to provide free information and guidelines to help you on your way to investment success.

You can play your part by telling your friends and associates on what Asxnewbie has to offer.

Things have been pretty good for the Australian economy over the last 15 years.The last recession is a distant memory, profit growth has been solid for years and until recently inflation and interest rates were generally benign.

However, earlier this year we started to get concerned that the risk of a hard landing was rising. (In February). The AMP’s chief economist, Dr Shane Oliver says “our main concern was that the RBA was going too far in raising interest rates.

“It has since become increasingly clear that the Australian economy is slowing abruptly,” he said.
Abrupt slowdown in Australia
Earlier this year the consensus was that massive iron ore and coal price increases and further tax cuts were likely to ensure that growth remained solid and that to offset the likelihood of further pressure on inflation more official interest rate hikes were required.As a result of these concerns the RBA hiked rates in February and March.

In the event, Australia has seen a major tightening in financial conditions over the last year.

• The Reserve Bank has increased the official cash rate by 1% to 7.25% over the last year;
• Bank lending rates have risen by an additional 0.5 to 0.6% reflecting an increase in the cost of funds flowing from the global credit crunch. As a result the standard variable mortgage rate has increased from 8.05% a year ago to just over 9.6%, a 20% increase which means that a family on a $250,000 mortgage is now paying about an extra $75 a week in interest payments.
• The credit crunch has slowed the amount of credit available to lend. This is set to worsen as provisioning for bad debts cuts into the lending ability of banks.
• Shares have had a 30% top to bottom fall, reducing wealth levels and confidence and boosting the cost of equity capital to firms. House prices have started to top out and fall, further cutting into wealth levels and confidence.
• The surge in petrol prices has added about $20 a week to a typical family’s weekly petrol bill.

All of this has put a big squeeze on the economy.The surge in commodity prices is great if you have shares in resources stocks or work in mining related jobs, but for the rest of the economy, the trickle down via, e.g., the tax cuts has now been more than offset by the impact of higher mortgage rates and petrol prices.

Continue reading ‘Why The Slowdown Is Happening.’

A lot happened yesterday and overnight, dear reader. It was a buffet of market economic information. We’ve laid a serve of the important stuff for you below.

But the share market will probably have its blinkers on. The only thing it’ll take notice of is the Dow Jones. And the Dow Jones had another shocker. Right at the end of a good week too.

Those late-week American employment figures we mentioned earlier …well, they proved more disruptive than a dog in a bucket of cats. More Americans filed for unemployment last week than any in week since 2003.

If you work at a shopping mall in the US, we don’t envy you. Retailers in America are at the point where cost-cutting means employee-cutting. Employees aren’t part of a team anymore. They’re not a valued resource. They’re a drain on cash.

So, they find themselves trudging off the to unemployment office. With plenty of company.

GDP figures and Alan Greenspan both suggested a recession. We wouldn’t say they “predicted” it. Predicting would be calling something before it happens. There’s every chance the US is already contracting. For Wall Street, all this meant a 1.7% drop for the day.

The All Ordinaries will be working uphill till 4pm.

Retail Sales Fall Slightly

Meanwhile, retail sales came through from the ABS. An doubled-bladed axe fashioned from higher petrol prices and interest rates has been chipping away at the mighty oak of consumer confidence for about a year now. But it hasn’t fallen yet. It’s just kind of leaning awkwardly.

The numbers were down in June though. Seasonally adjusted retail sales fell by 1% from May to June. Here’s the overall picture:

Continue reading ‘The Market Economy’s Focus Today.’