Bears Progress

  1. 1,383 Posts.
    Well the Australian market was not very impressed with the Greatest One Day US Rally Ever (in points) and was pretty cautious, with most stocks losing much of their initial lift.

    This being expiry day, it made possible some of the best daytrades around eg it was possible and even reasonable to trade CBA July $30.50 puts from 19c up to 70c.

    A number of stocks have actually been doing bear corrections for about 3 days now, making upward wedges on reducing volume, with beardom of varying degrees. These include WOW, TLS, ASX, CSL .

    Hard to say where banks are going except that it is down in the medium term. Resources look like they are on a dive: my BHP puts went up another 25% today. Insurance sector still very weak and headed a long way down.

    A few stocks lost the plot and broke support, such as ASC which is headed for the 20-23 area, WMC etc.

    The inexorable slide of the gold stocks has slowed, despite the price of gold, and we may now get a shortable bear rally.

    The Elliott scenario I painted for the US a few days ago still seems to be on target. Dow bounced off very good support near 7500 and the infamous 1998 LMTC low; unconvincing correction back towards 8600 or so seems likely here.

    Good trading!

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