xjo be on alert for possible 150 point fall, page-4

Hi Sandune,

Interesting, that.

Consumer confidence also fell today. Down ~2.0%. However, amongst ALP voters, confidence was down >12%. Amongst Coalition voters, confidence was up 3.5%.

Now, unless you are calling the Australian market a proxy for Wall Street, would you care to elaborate on what the triggers for a local fall of 150 points will be?

Most penny stocks are actually tracking steady to down, as opposed to, up.

Most penny techs remain down to flat.

Most penny miners /oilers are trading as they always have - rising going into the quarterly reporting season, or progressing into a drilling site.

It's hard, therefore, to see where, in the penny sector, the market is booming.

As for being expensive, by what indictaion does that appear to be the case?

Measured proportionally to the Australian economy (ie: growth in GDP, etc), the ASX has not excelled over the last 10-15 years and arguably is still in sub-87 territory.

More significant as an exposure to the Australian market would be:
1)
the reduced market liquidity brought about by NCP moving domicile to the States;
2)
the merger activity amonst the ASX150 sector (particularly in relation to property);
3)
deflated expectations on the timing to T3 (etc_ - still 18-24 months away; and
4)
risks to our mining /exploration sector with metals' prices becoming increasingly volatile and heading more and more towards the downside (already, tonight, the 3 top steel making companies in Europe are down by 5-7% each on Chinese demand for steel potentially waning - conversely, many other sectors are complaining of the virtual doubling in steel prices over the last 12 months).

So, yes, the XJO may fall, as it is likely to do at this time, both in the midst of Q3 local, US and European reporting, and in the lead-up to the Presidential election in 2 weeks time.

Funny though - 2 weeks ago everybody was talking of the dire risk to energy /oil prices due to insurgency in Iraq, strikes in Nigeria, hurricane damage in the States, and political instability in South America.

Now, all that's been replaced with the next 3 crises:
1)
Fannie Mae in the States (old news);
2)
a reduction of US$4B in monthly capital inflows into the States (down ~6% on the month, but approximately in line with seasonal conditions, based on comaparatives to last year); and
3)
China (et al).

One might wonder, however, why all the disquiet on China's northern border with Russia and why all the distrust in that region?

One may also wonder why France and the US have banded together to secure a Security Council resolution demanding Syria's unconditional withdrawal from Lebanon.

But then, one may also wonder about why (and in what manner) America now proposes selling certain reactor technology and equipment to the Chinese (ie: for electricity generation, etc).

Perhaps, one could also consider the sabre-rattling going on between China and Taipei, North Korea and the world (and why the US has been asked by South Korea to delay withdrawing any of its troops from the Peninsula).

But then again, I would have thought that the hardline coup in Burma (sorry, Mynamar) and the risks that that imposes for communist infilitration and terrorist insurgency into neighbouring Thailand, and into India's easternmost provinces (where terrorist insurgency eminating from out of Burma and Bangladesh is on the rise).

So, perhaps you are right. But more likely, the point of your real message is - increasing market volatility (as if the market has never, in the past, been volatile in its nature and function).

By the way, some smallcaps have gone on to become significant midcaps, and in the case of a few, sizeable large caps. Some others have also doubled their share price in short time frames, whilst others have languished in search of a higher share price. That, however, may have more to do with the nature and quality of the offerings on hand as opposed to anything else of a fundamental market nature.

Anyway, Europe's down and I have to wait for my techs to report on Friday. So, it's coming up to Merrick and Rosso time.