SYA Chart, page-1609

CPI Numbers ditched us - again
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Yes SYA lost 1.5c to finish on 34c. Our volume was again was quite high, over 189m shares traded. I thought we did reasonably well, we touched 35.5c. Also had a good rise in couple of days and have kept most of it.
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ASX Li stocks had a slight decline. Of the 54 stocks that I track, average decline was 1%.
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Overnight US Li stocks also held themselves. Although ETF of LIT declined around 2%, rest of the stocks were mostly flat.
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.What next -
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We all know what happened yesterday. We got a number which was worse than our expectation. Although CPI number of 8.3 was below July 8.5, but life is all about expectations. Eg if you appear for an exam and are expecting 85 marks. Then if you get 80, you are ecstatic and straight away hit the pub. But if you are expecting 90, you will be despondent and shut yourself alone in a room, though possibly still drinking. You still got the same marks – 85, but
expectation drove whether it’s a happy or bad state. Market plays according. If market had said expectation was 8.4, chances are we would have been steady. Yesterday I had said that if we get anything above 8, it will be a sell off. The quantum of sell depending on how much above 8 we are. We were at 8.3, reasonably up, and market got hammered. Close to 4% decline – one of another big falls we have got used to. It reminded me when we got CPI of 9.1 and got hammered. So happened twice now in short period.

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In all the gloom, there was one positive thing though. Although the markets declined considerable, the resource stocks that I follow did not fall much. Same thing we saw today on ASX. The index declined over 2.5%, but stocks that I follow did not have proportional fall. There were 2 reasons it did not fall much – one, both the sectors that I am following are in their strongest macro situation. Secondly, ASX punters are expecting a green tonight, some bounce, after the big fall yesterday.

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So SP 500 has had a big drop and now sitting at 3932. It touched a low of 3921. I have been writing around the number 4120, and how SP 500 reached 4119.28 and came back. Same way earlier it came back from 200 day moving average around 4325. Both times there was big decline. I had hoped history won’t repeat itself, but again it did on a short period.

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Currently SP 500 is sitting in the danger zone. It should not fall below 3900 else there is a chance the bears will take control and push it downward, first towards next level of 3800 and then June bottom of 3636. The number 3900 survived over a week back even after 3 attempts then, and also yesterday in big gloom. The question is – will it hold if there is another push down.

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Personally, today was a day of caution for me. I let go 20% of my stocks which had made some good gains and were still good today. If market goes up from here, I will be happy to buy back at higher price, because my other 80% will make gains. If it falls because of any reason, I will then have some coins to pick up at a lower price. It is my way of managing risk, I am sure people who just hold may come out better, in short term if it goes up, or medium term after maybe dropping a bit more and then coming back. I have said previously that 3900 is key for me, and it still stays.

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So what will happen tonight? US futures are slightly in green, but it doesn’t count as there is another figure to be out before market opens. Asian markets were big red, many falling over 2.5%. Volatility index VIX has risen to 27.27 – a massive rise yesterday and looking very ominous. If it goes above 30 we may be in trouble. 10 year yield rising more and not a good sign. Also its inverted from 2 year yield, which economists call a feature of recession. Cryptos are panicking, big fall in last 1 day. Bitcoin falling from 21.7k to 20.2k now. Reason I write about Cryptos is not because I trade, but lot of fund sitting there and their movement provides some direction to market. Another big number to come out tonight – PPI figures. That will definitely provide short term direction. It comes out before market opens. Last month it was 7.6. Expectation is of 7.1. Sounds similar to yesterday’s CPI previous and expectation. It would be fair now that if one day has been bad, other should make it up – anything 7.1 or below would be good. Will that happen? Lets hope so. All the best.