SYA Daily Report, page-264

How far will it be pushed down?

(Was away few days including weekend, hence could not post the Weekly Report. Will update the data)

Yes SYA remained flat to finish at 3.5c. Our volume was moderate, just over 6m shares traded. So last few days or weeks, the stock is getting hammered. The general Li stock sentiment is also quit poor in recent times, and that has not helped the cause. For many it would have been an unbelievable state to reach these levels. But such has become stock market now. Many stocks are doing very well on the hype, visuals, rock chips etc. But when the reality comes, nearly all of them face reality and lose all the gains made in the hype. Same way, turning from developer to producer is looking like that. Some developers doing very good (similar to visuals/rocks chips etc for explorers) - so some running on this hype. When the reality may come, it may not be the same. Just shows at what stage one should play a stock. For explorers before assay results, for developers before producing - This should not sound right, and should not be right, but that's the way I am reading it, for now. So where will this carnage end? For those who believe, it may the time to buy in tranches and hope for the best. Last year around June when the big drop came and many stocks made their bottom, SYA had a touch of 11.5. It looked very unprobable sometime back, but with 12.5 already touched and nearly wiped one, there is always a chance. Personally I have still not bought my stocks, as I said a long time back I existed and just kept a small amount. I am waiting to see some change in direction - trying to follow price action, as don't understand much what is the fair value or a value which it could be pushed. Still feel we are getting nearer, but unfortunately big traders are still in control.
.
ASX Li stocks were in bad shape today. Of the 75 stocks that I track, average loss was over 3%. Only 6 of the 75 Li stocks were in green today.
.
Overnight US Li stocks were quite volatile. Earlier in the day it got pushed down big, but like other resource sector stocks, made a comeback in second half. In fact, on average gained around 0.5%
.
Li sector in general is not doing well. Just in last 3 weeks, most of US Li stocks have falls between 20 to 30%. ASX Li too struggling. The sentiment is not very high at this stage, hence there may be a lot of shorting too. But that number is favourable for a bottom, around 25/30%, so hopefully downside may not be much, but as they say, we never know, best to follow price and wait for a clear reversal.
.
What next:
.
SP 500 still playing in the mid range of the play, a bit more volatility than recent months, daily swings have increased, as well as going up and down - all to confuse and indicating of the indecision what's going to happen from here. Yesterday it lost around 0.4% to finish at 4499. Market makers who play the numbers made sure it finished below 4500 - may be for algos. But intra-day it did cross 4500, and though it finished down, it still finished around the highest for the day - which was slightly bullish. ASX was in green but not much.
.
Among analysts as well there is no consensus. Those bullish are saying this is a healthy pullback. We tested 4480 yesterday, next 4430, but for many key is hold of 4300/4350. Some talk of 4210. Upside, many believe that another play around 4610 is on cards shortly. Those bearish, their eyes are lit now after months of proving themselves wrong and they believe a big drop is coming. Inflation, Credit Crunch, Recession, Bank Crisis etc again making waves. But some of these bears have been proven wrong, lets see.
.
One of the most respected analysts of Wall Street, Mike Wilson of Morgan Stanley, had told his clients that we will finish the year on 3900 on SP 500, but before that SP 500 will go around 3000. Market is on a tear. After waiting for 6 months, finally the writing could be seen on the wall. Mike in a letter to his clients admitted he got it wrong, providing a number of excuses. So its difficult to predict what's going to happen - even the best in the game can go wrong. So best is to follow price action rather than predicting.
.
Lead indicators are also giving mixed signals. VIX going up and down with big swings every day, above 15, but still below 20 which is bullish. Yields have gained in recent times indicating more rate rise and may be rise in inflation data on Thursday. Bitcoin after being in fear, is now making a move towards 30k - just opposite of stocks which are in decline after SP 500 is coming down from 4600+. So may be Bitcoin giving an indication of higher markets in some near term.
.
So what will happen tonight? US markets flat to slight green. Asian markets mixed. Sentiment still Greed at 70 - so punters are still bullish. Key is tomorrow Inflation data. So tonight another technical play. It would be good to get another green alternating between red and green. Will that happen?. Lets hope so. All the best.