Trembling Hand Trader

Premarket open 28th September 07

Bugger me but September has been a record for points gained in a month! And if you are looking for impressive stats we have ran up from low to high 1000 points or nearly 20% in just six weeks! WOW. Of course that has mostly been because of the Materials index but if you are short the SPI that has got to hurt. So where to from now? The start of a new quarter next week. Are the funds going to come out and go nuts pushing up the lagging sectors or throw more money into strength like BHP? You would think not but if they do you will see it in the XFJ above and beyond 7200. It popped its head above there yesterday but one day doesn't make a trend so I'm not about to get to excited with this one just yet. Did anyone see the nutty selling on the SPI after the ASX close. Many are obviously expecting a pull back here so you will see rises meet with plenty of selling. But like I said at the start of the week this rally may have a bit more stickiness to it than most expect.

Premarket open 27th September 07

Did you see the strength of the XFJ yesterday? While every punters favorite was taking it in the neck for running to hard and fast the financials were leading the market. Last night in the States rumors of Buffet taking a large stake in Bears Stearns sent the market higher. If only Buffet would come down under and buy out NAB. 7200 is the number that matters if you are a bull. The XFJ needs to hit up higher than that. It seems to be a magic number for the Financial. Have a look at the times it has turned at that number. Being 30% of our market if you think we are about to start another push well into record highs this sucker has to get over this point. I have been saying since May that this sector has to find some Mojo and we all know what that lead to. I'm not thinking we will get a clean break yet but it looks like its trying dam hard.

Premarket open 26th September 07

Did you see how many stocks were in the red yesterday? Way to many to call this action a healthy rally. But still the big funds are in control this week and everyone knows it. If you are a Bear there is no point fighting the man with the DEEP pockets this week. Let him have his quarter end mark-up game. Just like last night in the States where it opened down big they will just turn on the buy switch and move everything back up. I am looking forward to see what happens today as far as option expiry shinnagans goes. Just about all year a day out from options has been a down one. Someone turns on a nasty Futures sell bot and wrecks the market. It happened last week two days out from the SPI and XJO options expiry so today may well be the same. It will be interesting to see who lets who win. The Fat funds or the Fat option market makers. Keep a close eye on the XFJ it is still as unloved as ever but if it can get out of the mud we will go through the roof. But really I don't see it happening on this up leg.

Premarket open 25th September 07

Yes very nice rally to new highs yesterday but where are all the stock that are pushing us higher. The last time we were hitting highs it was with a smaller and smaller amount of stocks as people were chasing strength while the smart money was slipping out the back door. And we know how that ended. It seems that only a couple of stocks are responsible for the current new highs. Obviously BHP, RIO, WPL and the like add to that CSL and QBE but then there is not much out there that looks to be attracting much interest. Much of the small cap specie stuff is still crap and the Financials index seem to be stuck. The only good news really is we have broken a year long down trend in the 6 month new highs. This is probably not that surprising as the readings were getting very low after falling for a whole year. What we need now is a good push to print a nice high on the chart below then this rally will look like the real thing. Until then this sucker is not as strong as the XJO/XAO/ SPI makes it look.

Premarket open 24th September 07

Tough week to pick coming up. As always it could go three way. This is my play book in least likely to more probable.

1. We get spooked out by some news from nowhere and drop. Maybe 100 or 150 points.

2. We go no where. Little up one day, little down the next. By the end of week we are where we started and just as many doubters out there banging on about inflation and Yank dollar death spiral and gold going to $6666. Every rise is meet with some vicious selling after the initial short covering is over and every fall is some how repaired by days end. The Bears get louder that this is the pause before we start the next big leg down.

3. We drift higher. Probably on one big day up that is all in the opening action. We fail to follow every move the States takes as this rally starts to get some stickiness about it. The Bears and under invested get louder as they take heat on shorts and those on the side lines start getting anxious about missing the great rally of the last couple of weeks that starts looking like the real thing. Some of the crappy sub-indexes start to pep up. We finish the week on, just over or just under new highs. Alan Kohler has a chart by weeks end showing how we actual had a positive quarter.

Premarket open 21st September 07

Well the Pigs have a bit of a hangover after the party. I would say that these pull backs will let the hot money jump out and the ones that have been missing out on the long side a chance to dip their toes into the water. I would think that there is still many confused out there as to which way we are going. We have talk of some real strong inflation pressures coming from Helicopter Ben's 0.5 rate cut which is clearly seen the the Gold chart. What we need to convince the doubtful is a bit of a kick from all the sectors and markets that have been weak for so long. Think XFJ, Small Caps, Nikkie, Industrial Metals and of course the US dollar not to go into a death spiral. For today I would think it will be one of those set the low in the morning session and hit up after lunch kind of days.

Premarket open 20th September 07

The rally is sticking for the moment and even if we do get a pull back that will now serve as an entry point for the under-invested. And I would think there is many people on the sidelines watching in disbelieve that we are not going to hell. That we are not having a 1987 style crash. It is not usual to drop hard once we start going down but it is rare that we recover in the same time. Maybe a nasty retest is out there but as it has been looking last week it seems up is the way we are going. We just need so of the crap to get their Mojo back and we are through the top.

Premarket open 19th September 07

The Bulls celebrated like pigs last night at the birth of the Benanke Put. What a ripper of a rally but that makes things hard to play. I am not going to be getting to wild here. Sure we may even see new highs soon but underneath the hot XJO/XAO like I have been say there is still a whole heap of crappy looking charts. Oil and Gold are running flat out but if the US is not heading for a recession then the Industrials metals need to come to the party as well. The SPI is only 100 or so points off its all time high, for us to break higher and hold we really need the Financials to push here. Which is pretty funny as thats the same thing I was saying at the end of May when we were at 6300 just like we are today. Watch for the day traders to sell the opening highs in the first hour. If the Bulls have any balls they will push hard and squeeze the day trading shorts which will probably include me today. I just don't think the big money will be chasing strength today.

How was that Futures sell Bot yesterday? I'm going to have to find a name for him as he is a pretty regular player a day or two out from option expiry. Normally he is switched on a day before expiry but I guess the smart team with the huge pockets knew today wouldn't be a great day for a sell program. Why do I think it was a BOT. There is no way the ask side can be stuffed that fast on every up tick, as soon as we ticked down the orders would change and then on any hit up instantly the Ask side was stuffed with orders. Just way to fast for it to be a manual player. And it did what ever it was trying to do as we lost 90 points from top to low. Is it there to take out options or was it there to get net long equities as its hitting the Futs for todays games. I'm not sure but it certainly got its fill yesterday

Premarket open 18th September 07

Pretty tame session in the States last night compared to the mess in the UK. A good old fashion run on a bank, when was the last time that happened? To see people lining up in front of a bank to withdraw 2 billion pounds of cash out is pretty amazing. So we get some sort of cut tonight in the Fed rate. Will that stabilize things, will it be enough to save the US/UK economy? Probably the reaction to it tonight and over the next couple of days will not tell the real story. Oil is on a huge run here, food commodities are going through the clouds, gold is looking bullet proof. In short we have some real inflation problems and we are getting rate cuts!! The real problem is that the US is in all sorts of mess, credit problems, inflation problems, and possible growth problems. The fall out from this is still probably months away. So if we run hard tonight and for the rest of the week or weeks I will be looking for some trouble to re-emerge at a latter time. One rate cut will not fix this sucker. Keep an eye on what isn't in the news for the surprises like silver rolling over or the Yen going nuts. The best tells always come from what the Media Monkeys are not talking about.

Premarket open 17th September 07

Big week ahead. Every one will be watching and positioning for the US Fed rate cut early Wednesday morning our time. Along with that there is a stack of market moving news and events this week. It should be a ripper for volatility. We have but not limited to the following, Aussies Futures and index options expiry on Thursday, Quadruple Witching in the States on Friday, the big brokers in the US reporting this week, Big Ben congressional testimony, CPI and PPI inflation data from the States, Many strong Economy linked companies reporting in the US like FedEx, Oil, Gold, and soft commodities all pausing at record levels, the US dollar getting toasted again and unbelievably our market only 150 points off all time highs. So expect to wake up each morning to a surprise or two from the States and hopefully we will be trading a market with some reasonable intraday ranges as everyone tries to position themselves for the next surprise.