Daytrading August 19 afternoon

Thanks Brit and morning regulars.


Half-time round-up:

A relief rally swept the ASX higher this morning as investors took advantage of the lowest prices in seven months.

At lunchtime the ASX 200 was trading 55 points or 1% higher at 5358 and roughly flat for the week after erasing yesterday's sharp fall. The rally was spearheaded by the energy sector +2.4%, financials +1.8%, consumer staples +1.6% and telecoms +1.3%. Gold -1.8%, consumer discretionary -0.4% and industrials -0.3% were the only sectors to miss the upswing.

This morning's advance came despite a warning that the economy may be losing steam. The WBC-MI Leading Index, which indicates the likely pace of economic activity three to nine months ahead, fell from +0.02% in June to -0.49% last month.

“The change in the growth rate of the index is indicating that the economy appears to be losing momentum through the middle of 2015," Westpac chief economist Bill Evans told News Corporation. "That was a welcome lift in momentum from the second half of 2014... However, in the last three months the growth rate has eased back again."

Asian markets extended yesterday's losses. China's Shanghai Composite was lately off 3.45%, Hong Kong's Hang Seng 0.71% and Japan's Nikkei 0.52%. Dow futures were up two points or less than 0.1%.

Crude oil futures dipped 12 cents this morning to US$42.50 a barrel. Spot gold was 70 cents higher at US$1,117.60 an ounce. The dollar was buying 73.42 US cents.


Index support held and we have a nice bounce on our hands. Recent XJO behaviour suggests there could be another 140 points in this and a run up to 5500 before the rally runs out of steam. Of course, past behaviour is a useful indicator but offers no guarantees. Shanghai looks worryingly weak again this morning - another day like yesterday would likely send world markets lower. Trading: enough opportunities around to miss a few without too many regrets. TGS was the best of the bouncers I picked up. Also got something out of 3DM. Picked up GMA on the basis that the fall was disproportionate to the loss of the dividend, but it hasn't recovered as much as it 'ought' to have.