All Ords Sounds the Retreats
Time to change time frames. Early this week I posted All Ords Set for a Nasty Snap Back check out that post for the long term chart 1984 to present. Today lets zoom in to the last nine months. Since the All Ords closing low of 3111.7 on 6 March 2009 the 200 DMA divergence from price has gone from incredibly fearful to if not quite greedy certainly over confident.
The green line of 200DMA divergence to price uses the right axis. It has risen from -28% to a high of 25% on 15th October.
A pull back to the 200DMA seems to be odds on favourite, so that’s probably not going to happen. Now is one those times to up your focus on the market, to check up on your watchlist candidates and a final check for dross you should have been selling into this rally. At least that’s what I’m doing.
My only tinkering this month has been selling calls, the three I mentioned and then $75 FDX Calls [I originally posted $80, but on checking they were $75 calls]. AEO is the only one currently in the red and the current SP is only 8 cents above my if called price (strike+call). Need to decide what to do on MMA, any ideas?
Related posts:
In a recent interview, he [Soros] said the market is now very overextended and at substantial risk of another downturn. But that doesn’t mean the market will turn down immediately. Soros says the market is likely to remain buoyant throughout the remainder of 2009 and will likely face its reality of weak global growth in 2010. He says the rally has been driven by the government stimulus and little else. Soros says the recent uptick in bank earnings is essentially a fraud:
“Those earnings are not the achievement of risk-takers. These are gifts, hidden gifts, from the government.”
http://seekingalpha.com/article/169488-george-soros-the-guru-outlook?
I stopped following MMC when Erik Metanomski got ousted. He may be a wily old fox, but at least while he was a stakeholder you were playing on the same side. I’ve never had the same rapport with GPG. They tend to look after themselves first. To be a minority shareholder in one of their investments would not be one of my ambitions in life. Even the way they have structured the offer and the language they use suggests an antagonistic attitude. Why put yourself through the grief – they will always have the deeper pockets.
Whether it is simply antagonistic or corporate theft I’m not prepared to say.
Grantham’s latest quarterly is a great read, in case you hadn’t got to it already.
http://www.gmo.com/websitecontent/JGLetter_ALL_3Q09.pdf
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