Thanks Brit and morning regulars. Half-time round-up: The share...

Thanks Brit and morning regulars.


Half-time round-up:

The share market hit a two-year low this morning before staging a 200-point reversal as China's central bank flooded the financial system in a bid to arrest a market rout.

At lunchtime the ASX 200 was trading 119 points or 2.4% ahead at 5120 after falling as low as 4928 in the first ten minutes of trade. At its low this morning, the index had fallen 770 points or 13.5% in three weeks.

The rebound was led by the big banks, pushing the financial sector up 3.9% after touching an 18-month low this morning. Also surging were property trusts +2.9%, industrials +2.5% and materials +2.2%. The only sectors to miss the recovery were gold -2.3% and telecoms -1.2%.

Asian markets outside China rallied after the People's Bank of China injected 30 billion yuan into the financial system, the most since January last year. Read more here. Hong Kong's Hang Seng was lately up 1.89% and Japan's Nikkei 1.12%.  However, the Shanghai Composite resumed its plunge, last off 4.36%.

“It’s panic selling and an issue of confidence,” Wei Wei, analyst at Huaxi Securities in China, told Bloomberg. “The government won’t step in to rescue the market again as it’s a global sell-off and it’s spreading everywhere now. It’s not going to work this time.”

Dow futures picked up on the improving mood, last up 350 points or 2.2%. S&P 500 futures were up 41 points or 2.2%.

Crude oil futures bounced 55 cents this morning to US$38.79 a barrel. Spot gold was flat at US$1,153.60 an ounce. The dollar was buying 72.32 US cents.


Australians all let us rejoice, for we are leading the rebound. What a session. As a trader, these are the days you live for. I hope anyone with aspirations to do this full-time has been watching closely this week, even if they didn't trade. The knowledge gained at times like this is invaluable when the next opportunity comes along. This morning's swings were so large that it was possible to bungle both your entries and your exits and still walk off with a barrowload. I placed a load of lowball buy offers before the open but only snagged one hit - NUF, which turned into a beauty. Had to scramble to get entries in STO, NEA, SOR and CDY, all of which paid off (got out of the latter two before they soured again). As for the overall market, the fact we ignored another nasty fall in China is very promising. Is this the bottom? Short term, probably yes, but medium term we're stuck in a nasty downtrend which promises fresh lows unless the mood changes. The shorts can taste blood and will be waiting once this rebound has run its course. Unfortunately, it takes more than one good session to eradicate fear once it has entered the market.

For anyone who missed this morning's dead cat bounce, never mind: you can't get all the cats.