(Please note that my daily analysis is with a view for short-term trading/swing trading. So may not be of value for many of us here who are long and will ride the ups and downs. Also, I feel for short-term trading in the current state, general market is very overpowering for most of the stocks - some will carve their own path though. Hence I write about general markets mostly to get short-term direction. The reason I am writing is because I keep getting comments that it does not make sense, especially those with a long term view, and I can understand their frustration. I have a portion I keep for long and don't trade and a portion that I trade - this analysis helps me in my short-term trade, may not help every one and could be wrong as well, so please dyor. So my posts can be ignored by people who are not interested in the short-term view. Thanks)
Yes MLS remained flat to finish on 4.1c. Our volume was on the higher side, I think highest in a month, just under 10m shares traded. Good to get back to 4.1 after a sell down.
ASX Li stocks had a small increase. Of the 54 stocks that I track, average gain was 1%.
Overnight US Li stocks were mixed, but most finished in red falling 1 to 2%, though some were in green as well.
What next -
Yesterday US indices again had a drop, with SP 500 dropping 0.8%. Coincidentally ASX XJO too declined by exactly 0.8% - so going hand in hand with US markets.
So now we have couple of days of decline on markets. SP 500 is sitting at 3665, just below the number 3675 I mentioned yesterday we need to hold. At this stage there are mixed signals - some bearish and some bullish. So no clear direction for now. Mostly choppy trading happening and a zone not good for people who want to trade. Eg Bonds are still increasing, SP 500 went down according to that, but VIX went down instead of increasing. Similar contrasting reading in other areas. If we have to be bullish, SP 500 should get above 3675, capture 3720 and move towards 3800. If its bearish, a level just around 3600 is crucial to hold, if not previous lows may come into play.
One good thing is that most resource stocks I follow are holding well - even many getting in green even though indices are falling. This gives a hope that if indices were to fall a bit more, most stocks may hold the line within 5 to 10% - very good chance, but depends also on how much indices fall. So risk-reward looks good from this stage, especially those who believe that we may do a final or tradeable bottom in the next week or two. . Personally I am holding on to all my long stocks which I don't trade and have a horizon of year plus, so happy to hold and ride out the lows and highs. But for my trading stocks for short-term/swing trades, at this indecisive stage its become like a toss. So thought no point playing black and red and instead wait for market direction, hence have reduced my trading stocks considerably.
So what will happen tonight? US Futures in slight red. Asian markets largely red but not big red. Volatility index VIX moving in right direction, just under 30 now - its been decreasing last few days - one bullish sign (if only Bonds were behaving we would have got a big bounce). Tonight more earnings report. Also Options Expiry tonight - market is manipulated a lot as millions or sometimes trillions of dollars are involved - hence it can be very volatile. Last 3 months US markets have a very poor record on Fridays. Last 2 Friday's we had big fall. So an opposite in positive direction is due. Will that happen? Lets hope so. Enjoy your weekend and all the best.
MLS Price at posting:
4.1¢ Sentiment: Buy Disclosure: Held
