Markets losing bearish after loss of key numbers, will we bounce tonight?
Yes AZL lost 2 pips to finish at 6.2c. Our volume was average, just over 16m shares traded. So we made a new low. The number 6 has been talked about through out the year. It did not look like that we will come here. But such has been 2022 and especially recent times. Someone asked how low we can go? Its difficult to say. Markets have been very unpredictable. No one knows for sure where is the bottom for general markets. But a number I am hearing for last at least 4 months is somewhere between 3100 and 3400 (average 3250) - the final bottom as they say. That is still around 15% below where we are. If we reach there, who knows how all stocks will react. But many stocks may soon reach a stage that it soon become quite attractive if someone wants to hold for a long term. Then its individual to decide what they are comfortable with. One can never buy at absolute bottom, so buying in 3-4 tranches the number one wants to buy - That is what I would be doing, no advice here. At this stage have not started buying, had sold nearly all at early 8s as mentioned earlier and have been waiting. Please dyor as anything can happen.
ASX Li stocks lost again, but not like a big 5% of yesterday. Of the 54 stocks that I track, average loss was 1%
Overnight US Li looked very weak. Though the ETF of LIT lost only 2%, most other stocks average loss was over 4%. That way ASX Li did well. Maybe in anticipation of some bounce tonight.
What next:
.
Yesterday US markets had a big fall. It played out in similar fashion of what has happened in recent times after the Rate Rise decision. Falling big the day after. SP 500 declined by a massive 2.5%. ASX started the morning very weak, but tried to come back during the day, but lost a few in the end - finishing down around 0.8%
.
So yesterday SP 500 lost some critical levels. Last few days I have been saying we need to hold 3930 to stay within the current range. We lost that. We finished at 3895. This was below the big number of 3900 which has acted as support/resistance. Same way as play makers touched 4100 twice to give a bearish double top, they were again successful in finishing it below 3900 to present another bearish scenario. So from a technical perspective the numbers are coming up to give a very bearish look. Many algos and analysts follow these numbers, and its playing into bear hands. It goes without saying that for last 3 days bears have started taking control.
.
SP 500 does need to get above 3900/3930 to start with. Getting to 4000 should be next target. For bears first number is 3810 and then a very big number at 3750. This number 3750 may be first target by bears, but maybe not tonight.
.
Job data came yesterday which was not favourable to stocks. Tonight big Options Expiry night - event called Quadruple Witching - 4 types of options expiring, third Friday every quarter. This time $4 trillions dollars are at stake. Big money, some say a very manipulated day. Market makers who run Wall Street are the ones who have to pay out to Option Holders if they are in the money. They try their best to finish market in a position where they have to pay less, if not least amount out, so that they can make a hefty amount by Options Expiring worthless. At this stage with options in play, they will make maximum money if market finishes at 3920 for SP 500. They will have to pay out a lot if market reaches 3800, and also a lot around 4100/4200. So lets see where they take the market tonight.
.
Today most stocks started very weak, but many regained and did not finish on day's lows - market oversold/reaching attractive buy levels? Its possible, a lot of stocks have fallen at least 20-30% in just couple of weeks. So it was good to see punters stepping up. There's a possibility that even if indices fall further, stocks may not that much as they already are pricing in a good decline forthcoming. Speculative at this stage, but possible - at least today's trading was pointing towards that.
.
Personally as I have ben writing last few days, especially when I saw that it rebounded of 4100 making a double top, I have been playing defensive. These play makers can do anything and are powerful as well, so best to see what plans they have. The Fed has been very hawkish in last couple of days - they for sure want markets to go down if not crash, and they are trying their best.
.
So what will happen tonight? Its been a very poor last 3 days, though we finished green on Tuesday - but after giving up a much larger gain. The bears will try to crush now that they have an upper hand. But both probability and Options Expiry point towards a green day and finishing markets again in the chopping range - around 3950 +/- 1%. Will that happen? Lets hope so. Enjoy your weekend and all the best.
Expand
(20min delay)