Daytrading September 18 afternoon

Thanks Oscar and morning regulars.


Half-time round-up:

Shares advanced towards a third straight gain as Reserve Bank Governor Glenn Stevens talked up the economy and volatility settled down following the US Federal Reserve's decision to leave rates on hold.

At 1pm EST the ASX 200 was trading 30 points or 0.6% ahead at 5177 after earlier swinging as low as 5093 as traders fretted that the Fed's rates hold indicated underlying weakness in the global economy. The gold sector was the chief beneficiary of the central bank's verdict, jumping 4.9% as the US dollar declined. Other stand-outs included consumer discretionary +1.2%, utilities +1.2% and industrials +1%.

The market mood was aided by an upbeat appearance before the the House of Representatives Economics Committee by RBA Governor Stevens. Mr Stevens insisted the central bank retained the tools to cushion Australia from any 'hard landing' in China and had room to reduce rates further if required.

"We can lower interest rates if there's a case to do that," he told the committee. "And if the Chinese economy were to experience the fabled hard landing that many people have talked about for years - and which so far hasn't happened - you would expect in that world the exchange rate's probably going to go down, probably quite a bit, and that will be one of the key mechanisms that helps the Australian economy cope."

US equity futures improved as the morning wore on. Dow futures were recently up 36 points or 0.2%. China's Shanghai Composite was off 0.11%, Hong Kong's Hang Seng up 0.18% and Japan's Nikkei down 1.41%.

Crude oil futures backed off eight cents this morning to US$46.79 a barrel. Spot gold was $2 softer at US$1,128 an ounce. The dollar was buying 71.91 US cents.


Bullish signs on global markets so far. US futures don't indicate any major mood swing from this morning's close. If anything, the pendulum has swung away from panic back towards greed. Trading: nothing like the volatility one might have hoped for. The big swing took place too far up the food chain (CBA, BHP) for me to get anything from it. Instead I scrambled a part-fill bounce trade in BUX, missed a great entry in BAL and took a low-risk, low-return entry in MRM. Biggest disappointment of my week: I held VED yesterday at $2.02, sold at a small loss at the close - this morning it gets a takeover offer at $2.70. Argh.