Australia 200 Forwards ($5 mini) Mar-09 TODAY Opinion: Tough times continue Price: 3622 MONITOR Technical Points Resistance Major 2 3690 Minor 3673 Major 1 3656 Minor 3634 Gravitation 3611 Minor 3594 Major 1 3577 Minor 3555 Major 2 3532 Support Analysis: In Brief:
Overseas US markets finished largely unchanged, rallying back from early losses on the back of stronger energy and banking stocks The Dow shed 25 points (-0.3%), the S&P500 gained two points (+0.2%) and the Nasdaq closed eight points higher (+0.5%) The UK market finished lower for a fifth consecutive session, brought down by softening banks facing earnings worries The FTSE 100 closed 27 points lower (-0.6%) Commodities Oil posted gains for the first time in six days, albeit minor, on the back of Saudi Arabia’s conviction to make deeper supply cuts Oil finished at US$37.86 a barrel, up 27 cents (+0.7%) Gold declined with the US dollar continuing its recent strength, thus eroding the precious metal’s appeal Gold finished 30 cents lower (-0.1%), closing at US$820.70 an ounce Base metals were mainly stronger with nickel (+5.2%) and zinc (+4.7%) posting solid gains Ex-pat stocks Aussie stocks were mixed on Tuesday night BHP up 1.7% in the UK, up 0.9% in the US. RIO down 3.2% in the UK, down 0.6% in the US AQP down 9.8%, AWC down 0.8%, LGL up 3.9% Companies MQG – remains exposed to a number of margin loans despite selling the business to Bendigo and Adelaide Bank WES – expects 1H NPAT to be in the range $850-$880 million. Approximately $150 million expected in non-cash provisions and writedowns Brokers AWC – downgraded to Underperform (from Neutral) by CS BBG – started at Neutral by CS A late rally in US markets managed to stem the earlier losses on Wall Street, but the Dow still experienced its fifth-consecutive losing day
On the other hand, leading currencies stayed lower after early selling, with key indicators of market risk appetite, like EURJPY and the Aussie dollar, both losing around 200 pips over the last 24 hours.
The commodity markets were more mixed, with oil managing to stage a comeback overnight.
Clearly, the calendar might have ticked over, but we remain in the same kind of environment as we were last year.
Likely Price Action: The overall target of 3560 was achieved yesterday, and we already see prices naturally creeping back up to test the all-important 3640-70 area.
We see both 3640 and 3670 as key price intercepts because price has previously reacted at or around these levels in quite a bearish manner.
When we left you yesterday, the market has just attempted an assault on the 3640 range, but by the close, the local traders had driven price down aggressively.
More selling pressure can be expected this morning.
As we have said since Monday, until this market changes trend, we stick with it.
So, for today, we call for shorts and assume the bias is for the SPI to head back to test 3560 again.
Therefore, we’d look to sell one March Australia 200 forward mini at 3670 limit.
If filled, stops will be 40 points above entry with targets 80 below. This trade is valid for entry to 1.30pm today (Melbourne time).
In accordance with the ASR Capital Management Model, we will not be risking more than $200 by following the relevant trade specifications.
Members may enter this trade based upon the above criteria at their own discretion and we will track the progress of this trade in the Model Portfolio page of the report.
How ASR Would Structure This Trade Important Order Levels Type of Order Sell at Limit Stop Distance 40 Order Level 3670 G-Stop Suggested (Y/N) No Order Good Until 14/01/2009 Target Distance 80
(20min delay)