Oscar Reed
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Bit of a bounce in the US after hours market.
Might give me something to sell into for the ASX.
Might give me something to sell into for the ASX.
counter_violent
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Oscar Reed
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counter_violent
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I just do both.
No way I can lose then.
never a truer word spoken
Oscar Reed
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Three key reasons behind the risk aversion
Asian markets are staring at a modestly weaker open, however one saving grace is that some of the falls in the US equity markets have already been priced in.
It must be said that price action in Australia yesterday was terrible. We specifically wanted to see if traders and investors would use the opening bounce in the market to offload stocks, and offload they did!
The moves in markets overnight have been caused by three things to me. Firstly, we have seen a further steepening of various yield curves, which in itself is not necessarily bearish if the cause is higher inflation and growth expectations. However, this is not the case, the move is being caused by the Bank of Japan looking to change the structure of its asset purchases, largely as a result of how poorly its asset purchase program has worked thus far. Throw in recent commentary (or should I say, lack thereof) from the European Central Bank (ECB) that throws into question the sustainability of the ECB’s asset purchase program, and you have a move higher in longer-term bonds, which no one is positioned for.
Secondly, some of the biggest systematic funds have had to alter their portfolios, many which have been at extreme levels. This has caused massive shifts in their portfolio and we have seen markets respond in kind. The rest of market participants have had to simply react, and when volatility increases, traders have to alter their strategy if they are to stay in the game. Pure and simple, if volatility increases and we see (price) range expansion, one has to look at altering position sizing, while pushing out stop losses to account for greater leverage in the market.
Thirdly, throw in comments from the International Energy Agency which have pushed crude price lower, and we have a further move out of equities. The concerning situation is the genuine reasoning behind the risk aversion move is very complicated for many to fully understand. The issues causing a strong correlation between equity and fixed income selling is not the same the European debt crisis. This is very different and one which many in the retail community seem quite unsure about.
Asian markets are staring at a modestly weaker open, however one saving grace is that some of the falls in the US equity markets have already been priced in.
It must be said that price action in Australia yesterday was terrible. We specifically wanted to see if traders and investors would use the opening bounce in the market to offload stocks, and offload they did!
The moves in markets overnight have been caused by three things to me. Firstly, we have seen a further steepening of various yield curves, which in itself is not necessarily bearish if the cause is higher inflation and growth expectations. However, this is not the case, the move is being caused by the Bank of Japan looking to change the structure of its asset purchases, largely as a result of how poorly its asset purchase program has worked thus far. Throw in recent commentary (or should I say, lack thereof) from the European Central Bank (ECB) that throws into question the sustainability of the ECB’s asset purchase program, and you have a move higher in longer-term bonds, which no one is positioned for.
Secondly, some of the biggest systematic funds have had to alter their portfolios, many which have been at extreme levels. This has caused massive shifts in their portfolio and we have seen markets respond in kind. The rest of market participants have had to simply react, and when volatility increases, traders have to alter their strategy if they are to stay in the game. Pure and simple, if volatility increases and we see (price) range expansion, one has to look at altering position sizing, while pushing out stop losses to account for greater leverage in the market.
Thirdly, throw in comments from the International Energy Agency which have pushed crude price lower, and we have a further move out of equities. The concerning situation is the genuine reasoning behind the risk aversion move is very complicated for many to fully understand. The issues causing a strong correlation between equity and fixed income selling is not the same the European debt crisis. This is very different and one which many in the retail community seem quite unsure about.
P
postman
joseph1986
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Think the fundamentals will start to kick in now. Which isn't good for my snp 500 forecast
P
postman
The only way is up from here.
joseph1986
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All charts of companies attached in excel. Enough said!
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postman
Ftse powering ahead, wont go below 6675 again this week.
Oscar Reed
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Can I change my vote in the SP500 comp.
I think we need to recalibrate the lexicon of the forum as powering and the ubiquitous pair of pump and dump don't quite mean the same to me and maybe one or two others, add to that s/r levels now quoted at 10 point intervals.
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postman
A 35 point move on the ftse (in the up direction) is powering ahead for her. Yes volatility has increased but its still a big move.
Ftse is currently retesting the 6700 level and putting in a bottom. You will start to see higher lows and higher highs forming.
Not interested in what we might see, just not sure powering is 30+ points.
What adjectives have you got for the recent falls in that case?
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postman
Ftse is going to the 6750 level, and will probably close there today.
P
postman
Not interested in what we might see, ...
I put money down on what I 'might see' so thats ALL I'm interested in.
I put money down on what I 'might see' so thats ALL I'm interested in.
I know and when it goes wrong you put more money down, I can read.
joseph1986
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The way it's looking. He's right
I never said he wasn't. A comment on powering ended here, maybe by the end of the day i'll be offered outside and fight to the death for all my pips, who knows.
Hard to bother somedays.
