Daytrading Oct 9 afternoon

Thanks Shants and morning regulars.


Half-time round-up:

The share market is on track for its best performance in more than three months as traders discounted a slump in jobs last month and regional markets responded to a dovish statement from the US Federal Reserve.

At lunchtime the ASX 200 was 79 points or 1.5% ahead at 5320 and on course to match a 79-point surge on July 2. No sector was left behind, with gold stocks +4.2%, property trusts +2.1%, financials +1.9% and metals & mining +1.7% setting the pace.

“Minutes of the September Fed meeting acted like a steroid,” Matthew Sherwood, head of investment markets research at Perpetual, told Bloomberg. They “seemed to suggest that US rates could remain highly accommodative for longer than initially expected if global demand remained weaker than expected.”

The market barely blinked when the Australian Bureau of Statistics announced that the economy gave back most of August's revised jobs growth of 32,100 last month. The economy shed 29,700 positions last month, the ABS said, leaving the jobless rate steady at 6.1%. The Bureau has come under fire after admitting that its seasonal-adjustment method had failed this year. The August jobs figure was initially announced as 121,000.

"it is important to note that these figures will be revised next month, with today’s preliminary figures based on a ‘stop-gap’ methodology until the ABS can determine what the new appropriate seasonal pattern is," ANZ told Fairfax. "That said, a stable unemployment rate is more in line with other indicators of the labour market."

Asian markets gave a restrained welcome to overnight gains on Wall Street. China's Shanghai Composite edged up 0.1%, Hong Kong's Hang Seng a more bullish 1.12% and Japan's Nikkei 0.44%. Dow futures were recently up 29 points or almost 0.2%.

Crude oil futures bounced 49 cents this morning to US$87.80 a barrel. Spot gold was 40 cents lower at US$1,223.20 an ounce. The dollar was buying 88.48 US cents.


Some welcome relief for the bulls this morning. Sentiment among spec holders has been badly shaken by this downturn and will need a few good sessions to repair - the specs always trail the broader market in both upswings and declines. If you're bullish on the broader market, this is the time to get set in the specs. Another day or two of gains and the positive newsflow will pick up. I'm inclined to think we've seen a short-term bottom on the XJO, although much will depend on how the US earnings season plays out. Recent history suggests that the market will muddle higher through the next three weeks of US corporate updates, with the first week and a half producing the greatest volatility until a pattern is established. Trading: not a lot around for my approach this morning - I like to buy at support and this morning was too exuberant for that. Got a wage out of FAR and enjoyed the respite after a hectic start to the week.