Trading the Bounce

[sptrawler]

Do we know more about this infrastructure proposal ?
Where is it going to ? Roads, Bridges and Hospitals and other Public facilities or is he trying to compete with China by building Ghost cities/dwellings/skyscrapers ?

My guess is the panic button has been hit, productivity needs a massive hit, bottlenecks need to be opened.
Australia doesn't have the luxury of most first world countries, which is a massive domestic market place and a large population tax base.
We are exactly the opposite a small domestic market place, a small population tax base and a very large country to supply with first world infrastructure and welfare system.
It really is stacked against us, unfortunately a lot don't appreciate the issues.

 

[over9k]

Not sure what you guys are trading but some companies in some sectors get slammed much harder than others in them. Food for thought.

 

[Chronos-Plutus]

We got worse than expected unemployment data in from the USA.

Mostly down across all indices, ASX200 holding up though at the moment.

 

[gartley]

Lq,

Well gartley, you and proper and a couple of others did say an upswing to 6,000 on the ASX then there will be resistance, that call has been spot on.

Lucky guess.... And seldom works out that way.
Smurf, both the SPX and ASX200 have higher projections from here that are not met yet.
They maybe invalidated if the market falls a certain level, and until they are I can only assume they will be met.
But for now we have lower projections that need to met or invalidated too, and we can theorize that these will be met without invalidating the higher targets. I am just looking at it step by step at the moment.

 

[sptrawler]

Not sure what you guys are trading but some companies in some sectors get slammed much harder than others in them. Food for thought.

Some things haven't been affected, some things have been hammered, you aren't flying, you aren't going on holidays, you aren't going to the cinema or theatre, you have only just started to go to the pub.
But you have been eating, you have been doing those jobs around the house, you have been putting out the rubbish.
What industries shut down, which industries kept running, what services were required more while people were stuck at home?

 

[aus_trader]

Nah it's fixing existing stuff - crumbling bridges, worn out roads etc. They've been banging on about this since election time.

OK thank you for the information. It's great to get the intel from fellow members because information and news is all over the place and many brains working together in collaboration can achieve far more than individually.

Keep the intel coming guys/gals, I may research up ways to take positions for the infrastructure boom if that eventuates/passes/approves. Yes it's the USA but it's relevant to us Aussies too when 'trading the bounce'. As always you lot will be the first to know if I align any stock/s for the situation as/if it unfolds...

 

[Smurf1976]

OK thank you for the information. It's great to get the intel from fellow members because information and news is all over the place and many brains working together in collaboration can achieve far more than individually.

There's definitely a push for spending on infrastructure in Australia too with various gas pipelines, power transmission lines, railways and hydro power projects among those I'm aware of being considered.

There are both private sector proponents there and government-owned businesses with proposals too.

In other cases the proposal is from someone who'd use it rather than own it - finding an owner is one of they things they'd be wanting government to help with since the interest of the proponent is simply to use it once built.

 

[gartley]

To clarify - you're expecting it to drop to that level and then resume the up trend if I'm understanding correctly?

The first chart below is the 20 day cycle with projection target range in yellow. This was almost invalidated by price crossing offset lines but it didn't and is still on track to reach the target.
The other cycles below are the 10 week and 20 week. You can see they have much higher projections target levels. The 10W can be invalidated quite easily because price action is very close to the offset lines. The 20W cycle offset lines are a long way down from current price action and it would take a drop below approx 2750 to invalidate that. Until that happens, IF it happens we can only assume the market will move higher after this correction.
So in short "yes" but that this is subject to change if price action crosses the offset lines in the 10 and 20W Nominal cycles below.
It should be noted though in the AUS200, the current pattern of trend from the crash low at first glance looks like a typical EW abc corrective pattern and that we are headed to re test the lows again in the months ahead. It has rallied 55 fibonacci days from the low and very close to the 0.618 retracement, with waves a and c being equal.That is not to say that it cannot upward in a more complex EW pattern but I am not looking that far ahead yet and focusing on the pattern of trend at hand.

 

[makteb]

@gartley

EW formation looking good with numbers fitting in the range

 

[gartley]

The following are cycle projection charts for the All Ordinaries.
The first one is the 4 year cycle weekly bars gave a projection range for the recent crash low and was slightly surpassed and only briefly.
The next one is the 20W daily bars has an outstanding projection range of 6913 to 7419. This can only be invalidated by a fall back below both offset lines probably around 5300 .
The last chart is the 10 Week cycle daily bars. This projection has now been met.
Since a correction ( or even a potential reverse in trend) is underway, we need to see how the price interacts with th 20W Offset lines in the weeks ahead.

 

[RazzaDazzla]

Bulls and bears fighting in a sideways battle. Break to the upside? Or to the downside?

Stonks go up, printers go brrr is argument for the upside.

Pandemics, recessions, presidential election, covid second wave, US civil war, China trade deal fail are arguments for baked beans and ammo.

 

[over9k]

We all know the printers go brr every time the market tanks.

The question is where the money then all goes - and I think it's pretty clear that it goes into stay-at-home tech stocks. Here's my post from another thread:

Stay-at-home tech being the overwhelming contributor to the overall market improvement(s) we're now seeing:

With the megatech having such a weighting in the index, it's little wonder we see an overall bump. Take the stay-at-home tech out of things and it's a very different picture. Just on open there's a 1% bump in the sp500 but the equal weight index is just 0.16%. 6x the difference. Remove tech, and it's actually a slump.

Like I said/did, put your money into say-at-home tech - remember, the rest of tech's gone nowhere (e.g intel & AMD). Hell, if you want to put things on total autopilot, dump it into a tech index fund.

Virtually ALL the gains are coming from stay at home tech.

The hard part is predicting the stimulus timing - the IMF's just downgraded global outlook from -3% to -4.9% for the year so I feel like that'd do a very good job of spooking the fed.

They learned from the GFC that they need to have the printing presses on a hair trigger so it's my opinion that it'll be implemented/approved far, far easier now than it did then, and we can see that it's the tech stocks which have overwhelmingly benefited from the last round. I see no reason why they wouldn't the 2nd or 3rd time either as there's actually some fundamentals behind them, not just an inflated money supply.

 

[Chronos-Plutus]

We all know the printers go brr every time the market tanks.

The question is where the money then all goes - and I think it's pretty clear that it goes into stay-at-home tech stocks. Here's my post from another thread:




The hard part is predicting the stimulus timing - the IMF's just downgraded global outlook from -3% to -4.9% for the year so I feel like that'd do a very good job of spooking the fed.

They learned from the GFC that they need to have the printing presses on a hair trigger so it's my opinion that it'll be implemented/approved far, far easier now than it did then, and we can see that it's the tech stocks which have overwhelmingly benefited from the last round. I see no reason why they wouldn't the 2nd or 3rd time either as there's actually some fundamentals behind them, not just an inflated money supply.

Markets are tanking now:

I think it is Steven Mnuchin's turn to tell CNBC that everything is going to be OK.

 

[frugal.rock]

Opinion has it that the stimulus isn't filtering down from Wall St to Main St. The fat cats are keeping it whilst the average citizen is doing it tough.

So confused, is it a trendy bounce or a bouncy trend?

 

[over9k]

It is my very firm opinion that the U.S is headed for a 2nd slump after it gets a 2nd wave. Duc's looking at the traditional indicators and I think virus data is the precursor/driving force behind all of them.

Stimulus is big company rescue packages, not mum & dad business rescue package. Combine that with big business being able to raise private capital in a way that mum & dad businesses can't and you have all the little people going bust while the big companies remain solvent.

Mortgage delinquencies are way up and the IMF has just downgraded global outlook significantly. I'm now looking for what the final straw will be that spooks the fed into more action. It might be virus data this weekend, but I reckon the most likely near term thing is jobs/employment data on the 3rd of july.

Zoom is still the standout performer - up now when even the stay-at-home tech stocks are down.

 

[over9k]

The most annoying thing is irrationality in australian markets - companies which have almost nothing to do with the U.S nonetheless still follow the U.S market from the night before.

Good dip(s) to buy, but annoying for a long position. It's bloody choppy at the moment.

 

[Smurf1976]

The most annoying thing is irrationality in australian markets - companies which have almost nothing to do with the U.S nonetheless still follow the U.S market from the night before.

Should I interpret that to mean you're not expecting the Australian market to slump overall?

I mean if you're still buying then presumably that's the case? Or you're buying to sell quickly not for a long term hold?

 

[over9k]

Slowly growing a long position buying into the dips. My position increases with every dip.

The new mask factories come online in august so we'll see a massive improvement/reduction in virus spread then as there will be such a supply of masks that everyone can wear one everywhere and constantly.

I should have been more specific when I mentioned slump - short term slump that the fed will pump ungodly amounts of money into if necessary. There's going to be more virus data in the next few weeks, but there's also a very high probability of more stimulus - it's just impossible to predict when that will be, so you just have to buy the dips and pucker in the meantime. I mentioned before that stimulus is now on a hair trigger so I'm certainly not nearly as jittery as I otherwise would be. If the jobs data out on the 3rd is catastrophic then that's actually excellent as we can be almost certain that there will be a ton of stimulus to follow it if it is - making it an excellent buying opportunity. If not, I already have positions bought in the dips, so gains are gains.

In the meantime, it's just really choppy.

 

[qldfrog]

Slowly growing a long position buying into the dips. My position increases with every dip.

The new mask factories come online in august so we'll see a massive improvement/reduction in virus spread then as there will be such a supply of masks that everyone can wear one everywhere and constantly.

I should have been more specific when I mentioned slump - short term slump that the fed will pump ungodly amounts of money into if necessary. There's going to be more virus data in the next few weeks, but there's also a very high probability of more stimulus - it's just impossible to predict when that will be, so you just have to buy the dips and pucker in the meantime. I mentioned before that stimulus is now on a hair trigger so I'm certainly not nearly as jittery as I otherwise would be. If the jobs data out on the 3rd is catastrophic then that's actually excellent as we can be almost certain that there will be a ton of stimulus to follow it if it is - making it an excellent buying opportunity. If not, I already have positions bought in the dips, so gains are gains.

In the meantime, it's just really choppy.

Just a note: masks are available whenever you want: just order and you get them, was not the case 2 months ago, only companies in the west take 3 months to get online...
and China is producing masks at an amazing rate, moreover we never lacked scarfs which are useful enough if you are not working in an hospital but walking down the street..
finding post event reasons is different from finding true causes
but astrology is still alive 2000y AC so I assume mass media market analysts will still have jobs in the years ahead...

you get them on Monday 200 for 90AUD
yes it was cheaper 6 months ago but there is no penury, I pity the poor buggers coming online with a mask factory next month...on the other end but be fully government funded etc..as are most business these days

 

[over9k]

You're forgetting the intense distrust of china at the moment frog - there was even a planeload of defective ones that went to what I think was denmark that then made the news.

Combine that with tariffs and everyone obviously wanting the cheapest mask (that actually works) possible on account of everyone being skint at the moment and we see what we see.

"Made in china" is enough for people to just bin the thing and wear nothing at the moment. China's on EVERYONE'S shitlist.