HQ in Oz ... sand pit in Europe?

Hmmm ... in the last few days becoming increasingly concerned as to the way our 'puppy-dog' market reacts or better, overeacts to overseas markets ... generally to the Dow ... Oz awakens each morning breathless to scan the overnight NYSE/DAQ for a hint of what is ahead for our own market ...

Those holding stocks with offshore ADR's also feel the strain in recent times ...

The spate of global mergers in the resources sector, all touted as urgent and necessary 'plays' to head off the threat of offshore hostile takeovers and providing so-called 'instant' benefits of accessing to global finance/markets are dubious at best.

One such example could be BHP and despite the fears expressed and deals done ensuring a HQ in Oz to placate those with real concerns ... it might be that reality is beginning to bite ... the 'sand pit' it seems really is in Europe.

Overnight, (and as correctly noted by Bonkers) the ADR has tanked to an AUD equivalent of $9.37 ... gulp !!!

The 'spin-off' of BHP Steel is suddenly looking a worry as contrary to the hype of releasing additional shareholder value, these and the 'offshore' influences have seen the market 'write down' the stock hard in recent times ... no doubt driven by these and ADR factors...

Monday will be a major test for BHP and the only consolation worth remembering may be that the 1:5 issue (if BHP Steel floats at around $3.00) will represent an approx. $0.60 compensating factor for existing shareholders ... long extinguished by recent falls.

My recent BHP chart showed a Fib support level $10.22 along with the comment (to Alpha) that a failure at this level could see a freefall ... if Monday sees BHP tank ... then the worst will be realised.

BHP Friday came off 2% with profit taking ( selling hard into rallies is now in vogue) was disappointing but some selling was expected ... not enough to trigger most stops ... but further weakness Monday (re:above) will see 'stops triggered' ... a view from the 'bench' might be preferable in this event until the bottom re-establishes.

With the departure of 'guru' Paul Anderson and the Gilbertson headed incoming regime ... recent industrial disputation was in part the customary welcoming 'muscle flexing' by the union movement ... all good fun for those who enjoy the game...

One positive note is that the spin-off of BHP Steel ... others such as OST and SSX are looking rather cheap and holders have seen some nice upside over the last week or so ...


This is only my view ... read the red stuff.