With some positive news in the USA last night providing further indications of Green shoots, I cannot stay out of the market today. I am starting to see indications that the current market phsycology is almost in the opposite situation to when the market was going down. To explain, when the market was on its way down, and after a period of continual falls, it tended to slow or trend flat because the market felt that after such a sharp and prolonged drop it could not fall any farther, but IT WASN”T SURE of this presumption being correct and was awaiting further confirmation signals which never came. All it took to set the market going South again was further small snippets of “”RED SHOOTS””.
Well, I am now starting to wonder if this is not the case in the current trend North. Small corrections for a week because “We have run so hard since March it simply cannot go on, can it?””. Today we see further Green Shoots news and the markets tentatively head North, waiting to see what everyone else thinks. HLL has highlighted some of these Green Shoots in his, once again excellent, summary of the markets. What is significant, in my mind, is that we are now starting see a slowing in the deterioration of some key measures and an improvement in others. Significantly, the World Bank increased their growth forecasts for the Chinese economy to 7.2% from 6.5%. China is the worlds’ third largest economy, and one of our largest trading partners.
On my watch list today:
HFA- Looking at a trade as well as a longer term stake. Last week I mentioned that I felt that there would be a consolidation in the Asset manager and Hedge Fund space on news that Commonwealth Bank was interested in a stake in Lloyds’ Fund Management Arm. There are now further reports that CFS- CBA’s fund management arm, is seeking an alliance in the Asset Management and Hedge Fund space. They are reportedly looking at a few possible deals, and are “reasonably advanced” in a couple of those discussions. There are also indications of others seeking alliances.
WRK, HNR and AGO- on speculation that they may be announcing a consolidation of some sorts for their Iron Ore Interests. Could move well when they come out of suspension,
EXT- on the Announcement last night, essentially resolving some of the frictions on the board and with their major shareholder. The chart is looking over bought, but could provide a nice scalp trade with a price target of $7.00
CTP- out of trading halt this morning after news of oversubscribed rights issue and being fully funded to commence a drilling program in August. Issue was at 10c so need to confirm the trend first. I will wait till 10h30 for things to settle down a bit, unless there is a clear trend which can be scalped.
NXS- has been hovering near support at 40c for a few days now.
LNC- I own for the long term portfolio having bought at $1.75 or so. It seems to be finding support at around this level ($1.68??) and could be set for a rise again for a nice day trade, although caution is required because it has technically had a strong break through its fairly strong resistance at $2 a few days ago, and the Slow Stochastic has not yet turned or crossed on the charts.
