Wednesday, May 19, 2010

Long Kiss Goodnight to the Miners

2 weeks ago, I spoke of getting setup in the resources for the long term - and whilst the call was pretty much on call for the following week's follow through upswing - the upswing was a very shortlived bounce, and now we are back to square 1; of mass hysteria and panic. I take the past two weeks of manic action akin to wining and dining a girl only only to take her to the door for a goodnight kiss and getting the 'wtf you trying to kiss me?' look - although that's never happened to me. :p You guys should really learn to stop prejaculating in your hand and remember the risk factors are part of the game, much more than the price action that blinds you like the makeup of a sly fox - I stressed protection - shorting some banks, and that would leave you with a nice profit both ways or keep your money in your pocket, breakeven style.

aussies are losing confidence largest drop in 19 months -
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGwuMmE8V7tM&pos=5


oh clive peeters goes broke..nice reccomendation by aitkens there. haha
http://www.businessspectator.com.au/bs.nsf/Article/Clive-Peeters-placed-in-voluntary-administration-pd20100519-5L5M3?OpenDocument&src=hp9

miners are getting ripped with projects being scrapped
fmg
http://www.businessspectator.com.au/bs.nsf/Article/Fortescue-halts-two-projects-due-to-tax-pd20100519-5L386?OpenDocument&src=hp2

sto
http://www.businessspectator.com.au/bs.nsf/Article/Santos-says-new-tax-will-derail-CSG-pd20100519-5L2TY?OpenDocument&src=hp3

the overseas investors are leaving the ASX miners by the boatloads, the current downswing may get more painful before it recovers. I'll stay very close to the action.

But Resource Prices are Rising...
Overnight resources outperformed in the UK after metal prices jumped on speculation the plunge in prices in the past 2 days overstated the risk from slowing demand in China and Europe.
means: BHP, RIO are all performing decently despite the market downturn. If resource prices maintain it's strength, this could bode well for a turnaround soon in the ASX.

Price/technical action
Markets likely to fall below support, but not much more - 3% price below support lines seems to be a good margin of safety.
be warned that the sp500 market is collapsing on high intra-day volume, and until the volume subsides, it might be worth waiting to setup straight longs - get paired into your trades, or scale into them.
http://www.zerohedge.com/article/volume-picks-market-dies-redux

Oil:
Oil ended at a seven-month low, as a rising dollar and falling stocks nipped a budding rebound in oil prices. Crude oil for June delivery lost 95cents, or -1.36%, to $69.41 a barrel, ending on the red for the sixth consecutive session.
http://blog.afraidtotrade.com/crude-oil-at-the-70-level-gives-a-finger-trade/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+afraidtotrade%2FNRSd+%28Afraid+to+Trade.com+Blog%29&utm_content=Bloglines

Gold:
Gold seems to be stalling, this could be the cue for a long oil/short gold play - i like short NCM, long Wpl

Usually resources, gold and oil all move in the same direction, I have no idea what this current move is trying to tell me. Let me sleep on it..tonight.


Hamm's Radar:

Macarthur rejects Peabody, falls $2.10, or 15.73 per cent, to $11.25
theme: takeover
- implications? trying to get word from a friend covering this stock on whether or not the stock has value. stay tuned.
http://au.biz.yahoo.com/100518/2/2d0ga.html

ATVI
theme: love the starcraft 2 addiction, beta is closing and could release within 2010.
quick take: if there was one stock I had to live/die with; it has to be the makers of starcraft, who will become the the owner of the best selling computer game ever. I wouldn't be suprised if there are more than 1 billion copies sold. Do the maths, but buy the stock quickly when you do.

http://www.finviz.com/quote.ashx?t=atvi


AXA
theme: takeover
http://au.biz.yahoo.com/100518/2/2d0fw.html
likelihood: low given the current market downswing, worth a punt at 5.55 though.

Takeover watch
target - ubet: anything below 2.80 is good value
acquirer - chdn: shorting this stock with a long in ubet together would provide a good hedge

SBT

theme: worldcup, earnings upcoming

Hedge Fund Trader Watch:
Paulson is long MGM, BYD, XTO, APA, HIG, FDO, NG, NOVL, KGC

http://www.fundmymutualfund.com/2010/05/john-paulsons-q1-2010-moves.html


Some defensives ideas:
TLS: very low end of it's valuation, anything below $3.00 is good value - if the NBN goes in their favour, we're looking at an easy 10%.
TAH: they've just re-invested into their new floors, and I think their reduced qtrly revenues were a reflection of the dry patch 'during' the renovation, I think the next qtr's revenue is likely to improve - especially if i/rates are now on hold.

Moderate risk Trade Idea - two part play
Buy some aud cfds in the 85c range, play the 90c upswing, sell out - re-invest the 5c worth of profits in overseas exposure if the market - preferably ATVI.