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@Mosb. I tend to agree with you. touch wood.;) Might I say...

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findingnemo

505 Posts.

22

06/02/18

18:57

Post #: 30866497
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Originally posted by Mosb ↑

So U.S. equities (and therefore the ASX and are beloved GXY) have been mangled in the past few days.

VIX equity vol has gone through the roof (seriously look a chart) thanks largely to short covering with respect to XIV and other short vol ETFs (these are where punters are able to short equity volatility - a very profitable strategy over past five years - eeeeeeee until now). this has lead to what look likes the unraveling 'i.e. a termination event' of these ETFs and possibly others.. This has huge impacts to the physcial equity vol and S&P, DJU cash markets...

There's plenty of chatter by the doom squad out there that this could potentially morph into something far bigger.. Much like how sub-prime defaults in 2007/08 morphed into a once in a lifetime Global Financial Crisis.

THAT WONT HAPPEN THIS TIME - I believe this will remain a somewhat isolated and contained equity event -I REPEAT - This will not turn into GFC 2.0 - and we should all be making the most of these opportunities to buy more GXY (and select others) in my opinion only - heres why:

1.) Most sophisticated and professional investors (theres plenty on record saying this) were perplexed with why U.S. equity indices rallied the last 10% over Dec/Jan - this clean out over the past few days has simply removed some of this irrational exuberance...

2.) Compared to 2007/08 there is far less participation in this equity boom from the middle class (less retail holders to exacerbate these moves and cause the second/third waves of panic)

3.) The sell off actually was triggered by a 'Good' news story with respect to US economic strength, Higher interest rates and Monetary policy normalisation - something that central banks have been looking for years to do

This 3rd one is important - global financial markets can undo all of this fear by simply pricing in only two hikes by the US Fed in 2018 rather than the three that were expected (this removes what started the sell off...)

If the fear continues U.S. treasuries will rally (lower in yield) - I mean look we have already seen 10 yr treasuries rally from 2.85% back to 2.69% in one trading session (huge moves for those who don't follow treasury markets)

In lithium terms - we all know that these supply fears are unfounded and this is DSO allover again - we know there is huge growth round the corner for GXY (and others) so take this sell down as an opportunity to increase your slice of the pie!

All in my opinion only - Good Luck!

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@Mosb. I tend to agree with you. touch wood.
Might I say abc.net.au/news does nothing to allay fears in people. What is up with those journalists? They really have an axe to grind....and I quote "No sector was spared as the Australian stock market shed $60 billion..The Australian stock market is stripped of $60 billion in value — including a whopping $52 billion in just four minutes of trading — after chaos on the Dow Jones." !!

Personally I am kind of glad the dow jones is pulling back. We have ok fundamentals here in Australia, and all ords has already had its own pull backs - take last year!! for example. So hopefully in a couple of weeks the dust has settled and the all ords regains lost ground. Good luck. Yes it could be a great day to pick up more GXY. just in my own very humble opinion.

GXY Price at posting: $2.88 Sentiment: Buy Disclosure: Held
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