No6's Financial Markets Thread

[Van]

We're now at the critical decisive point.

YoY is about to go negative without that expected bounce- so history tells us that the the market will either rally strongly or if it doesn't then further collapse is inevitable.

http://www.thetechnicaltake.com/2011/09/30/it-is-time-to-put-up-or-shut-up/

[Van]

We're now at the critical decisive point.

YoY is about to go negative without that expected bounce- so history tells us that the the market will either rally strongly or if it doesn't then further collapse is inevitable.

http://www.thetechni...-up-or-shut-up/

 

Looks like she's going down with all hands on deck!

[jerpy]

Looks like she's going down with all hands on deck!

 

Looks like someone wants to get their hands on cheap stock, Qatari story strongly doing the rounds.

 

 

$10bn in metals and mining companies...... more than $5bn will be in gold equities via a new vehicle referred to as “Qatar Gold”.

 

http://www.ft.com/cms/s/0/4e2737ee-edbc-11e0-a9a9-00144feab49a.html?ftcamp=rss#axzz1RGkcqpxQ

[No6]

Looks like someone wants to get their hands on cheap stock, Qatari story strongly doing the rounds.

 

 

 

http://www.ft.com/cms/s/0/4e2737ee-edbc-11e0-a9a9-00144feab49a.html?ftcamp=rss#axzz1RGkcqpxQ

 

Was reading yesterday that automated sell targets were now being hit, so the automated trading bot computers just take over. Looks that way this morning as well. Other than that what we are seeing is a good old conflict between markets that want things done yesterday and to their liking, and the political system, mainly Europe, going at its own pace because that is what democracy is supposedly all about.

 

Be good if we could actually find out when these bot programmes kick in.

 

Quant trading: How mathematicians rule the markets

 

Trading floors were once the preserve of adrenalin-fuelled dealers aggressively executing the orders of brokers who relied on research, experience and gut instinct to decide where best to invest.

 

Long ago computers made dealers redundant, yet brokers and their ilk have remained the masters of the investment universe, free to buy and sell wherever they see fit.

 

But the last bastion of the old order is now under threat.

 

Investment decisions are no longer being made by financiers, but increasingly by PhD mathematicians and the immensely complex computer programs they devise.

 

========================

 

These so-called quantitative trading programs underpin all quickfire trades - known as high-frequency trading (HFT) - in which stocks can be held for just a matter of seconds.

 

They are also used in more traditional trading, where the holding period can be days, weeks or months.

 

Some are fully automated, but most require human oversight to ensure nothing goes too drastically wrong.

 

Scott Patterson, a Wall Street Journal reporter and author of The Quants, uses the analogy of a plane on autopilot, which can fly itself but where a specially-trained pilot can step in at any moment.

 

On 6 May 2010, the Dow Jones tanked 700 points then recovered within minutes. The culprit? A cascade of sales by quant trading programs.

 

Had the losses not been recovered when the programs were overridden, the Dow would have suffered one of its biggest one-day falls in history.

 

These programs are immensely powerful, constantly monitoring market movements, trading patterns and news flows and are capable of changing strategies within fractions of a second.

 

=====================

 

Their proliferation would certainly suggest so. One commentator says two of the biggest HFT firms, Tradebot and Getco, alone account for about 15%-20% of all equity trading in the US.

 

As they are private companies, it is hard to know precisely how far their influence extends.

 

http://www.bbc.co.uk/news/business-14631547

[No6]

More fat fingers.

 

Pound plunge blamed on 'fat fingers'

 

Computers aren't supposed to make mistakes. And they certainly aren't supposed to have fat fingers.

 

But on Monday currency traders were gossiping about a fat-fingered algorithm that caused the pound to crash by almost a cent after a computer mistakenly pushed through a large sell order.

 

Sterling collapsed from just under $1.5580 to just over $1.5480 in a matter of seconds at almost exactly the same moment that surprisingly strong manufacturing data were released at 9.30am on Monday. The pound immediately rebounded to $1.5550, suggesting somebody took a bath on the hasty transaction.

 

"It was a miss-hit on cable and we hear an algo just stuck an offer at $1.5480 in the machine which should have been $1.5580," one trader said. Kathleen Brooks, research director at Forex.com, added: "The market legend is that it did spike down due to some sort of mis-trade. Usually when something like that happens, everyone blames an algorithm or a hedge fund."

 

Somehow it seems, in the trading world, a fat finger can be judged to belong to an algorithm rather than the programmer who built the algorithm.

 

http://www.telegraph.co.uk/finance/currency/8804859/Pound-plunge-blamed-on-fat-fingers.html

 

[No6]

 

Added a few Av this afternoon, went ex-div yesterday, but plan to keep for a good while yet. (Just a few mind).

 

I do wonder about Aviva and what the story here might be. Currently stands at around 278p with an 8.8 div yield with no sign that it intends to reduce the dividend?

 

A few weeks ago this story/rumor appeared, probably from a market looking to ramp the long side of the price a bit before talking it down again on the short side. Still, it could be attractive to a bid.

 

AVIVA VULNERABLE TO ZURICH BID

 

Wednesday September 7,2011

 

SHARES in Aviva hit a 16-month low yesterday, prompting speculation that Swiss giant Zurich Financial Services could move to snap up its rival in a £12.5billion takeover deal.

 

Insurer Aviva, which has also been tipped as a potential target for Germany’s Allianz, fell 5¼p to 301¾p on brisk trading as worries over the fallout from the eurozone’s debt crisis outweighed the high-yielding stock’s attraction for income investors.

 

Gossips reckon Aviva’s lowly rating leaves it vulnerable to an approach from Zurich and suggested one could be made at 440p a share.

 

http://www.express.co.uk/money/view/269674/Aviva-vulnerable-to-Zurich-bid

 

[bob monkhouse]

Anyone else underwater today?

 

I do wonder if now is the time to be brave. Im sure there are some great stocks trading at massively discounted prices. Or will the slide continue...

 

Im keeping an evey on Aviva too, MML, Tesco.

 

Noticed a fe of Naked Traders favourites were smashed today...OXIG, AZ Elec, GKP, PFC

[No6]

Anyone else underwater today?

 

I do wonder if now is the time to be brave. Im sure there are some great stocks trading at massively discounted prices. Or will the slide continue...

 

I think you can be brave on the swings, unless you are prepared to sit on good companies for years. I expect a bounce soon from oversold conditions, but then I wouldn't be surprise if it falls again in a few weeks time once someone mentions Greece.

 

Im keeping an evey on Aviva too, MML, Tesco.

 

Noticed a fe of Naked Traders favourites were smashed today...OXIG, AZ Elec, GKP, PFC

 

Tesco reports tomorrow and UK sales are expected to be down, but overseas sales rapidly improving. I've read they are expected to report a 7% increase in profits, not bad all considered. Trouble is, each time Tesco has reported recently the share price has gone up just before, only to be sold off once they announce, usually because the market only looks at their UK figures and seems to totally ignore what they are doing overseas. Guess what? Tesco was up today while everything else was falling! What's the betting the share price falls tomorrow?

 

I'll be surprised if NT didn't sell a few or go for his usual FTSE short the SUK2 ETF to hedge, which can be held in an ISA.

 

http://www.google.co.uk/finance?client=ob&q=LON:SUK2

[No6]

FTSE futures suggest the market opens up tomorrow, but you wonder for how long?

 

Moody's downgrades Italy: the full statement

 

Italy’s credit rating was cut by Moody’s for the first time in almost two decades on concern the government will struggle to reduce the region’s second-largest debt amid chronically weak growth. Here is the agency's full statement.

 

Moody's Investors Service has today downgraded Italy's government bond ratings to A2 with a negative outlook from Aa2, while affirming its short-term ratings at Prime-1. The rating action concludes the review for downgrade initiated by Moody's on June 17, 2011.

 

The main drivers that prompted the rating downgrade are:

 

(1) The material increase in long-term funding risks for euro area sovereigns with high levels of public debt, such as Italy, as a result of the sustained and non-cyclical erosion of confidence in the wholesale finance environment for euro sovereigns, due to the current sovereign debt crisis.

 

(2) The increased downside risks to economic growth due to macroeconomic structural weaknesses and a weakening global outlook.

 

(3) The implementation risks and time needed to achieve the government's fiscal consolidation targets to reverse the adverse trend observed in the public debt, due to economic and political uncertainties.

 

http://www.telegraph.co.uk/finance/financialcrisis/8807468/Moodys-downgrades-Italy-the-full-statement.html

 

 

[No6]

Tesco produced its numbers this morning and as expected the market is concentrating on the UK side of its business which fell, but I would say not dramatically considering it has 30% share of the UK market. Overall, the figures were pretty impressive if you look at the bigger picture of its international growth. Market can't be bothered to look at that it would seem. For longer term, dividend seeking investors, they still look cheap to me.

 

LONDON—Tesco PLC's same-store sales fell in the U.K. in the second quarter, but growth at the supermarket company's extensive international operations helped it boost its net profit in the first half by 16%.

 

Net profit rose to £1.38 billion ($2.14 billion), from £1.18 billion a year earlier and above expectations of £1.31 billion. Total sales in the first half excluding the value-added tax increased to £31.81 billion, from £29.51 billion.

 

Its U.K. trading profit rose 4.5% to £1.27 billion in the first half. U.K. sales rose 7.1% to £23.43 billion, but most of that growth came from rising inflation and fuel costs. Stripping out the value-added tax and fuel, sales on a same-store basis—the industry's preferred measure of growth—fell 0.5% in the first half.

 

Chief Executive Philip Clarke said growth was excellent in Europe and Asia, and encouraging in the U.S. However, he said demand remained subdued in the U.K, particularly in non-food categories.

 

http://online.wsj.com/article/SB10001424052970203388804576612102975479910.html

[No6]

We're now at the critical decisive point.

YoY is about to go negative without that expected bounce- so history tells us that the the market will either rally strongly or if it doesn't then further collapse is inevitable.

http://www.thetechnicaltake.com/2011/09/30/it-is-time-to-put-up-or-shut-up/

Very big bounce on the FTSE today and it was within its trading range and support yesterday when it began. Much of this looks like automated trading to me, support is reached the computers buy, resistance, they sell. The bears may have to think and hope again, although the weekly and monthly charts still look negative and trending down. If the FTSE breaks that 5400 resistance barrier we may be in for a nice set up for the annual santa rally come December.

[John Doe]

Very big bounce on the FTSE today and it was within its trading range and support yesterday when it began. Much of this looks like automated trading to me, support is reached the computers buy, resistance, they sell. The bears may have to think and hope again, although the weekly and monthly charts still look negative and trending down. If the FTSE breaks that 5400 resistance barrier we may be in for a nice set up for the annual santa rally come December.

Bernanke promising more of everything is the US last night.

 

So, just put a small short on the dow (tight stops as always).

 

Fib retrace from the recent drop.

 

Edit to say, seems the stops were a bit too tight. Stopped out for small loss. Next target 11000 for a 62% retrace, and a small short bet.

[No6]

Bernanke promising more of everything is the US last night.

 

 

Followed up by the BoE announcing £75billion of money printing supposedly for the economy. We know that most will end up with the banks and speculators who will no doubt use it to ramp up commodity prices. Already this morning the big FTSE commodity companies are going like gangbusters. More price inflation down the line.

[No6]

ADVFN market report.

 

The Footsie finished at the highest level of the day, with just four stocks in the red, as gains were built on after the opening bell in New York, which saw stocks rise on the back of a better-than-expected unemployment claims report.

 

It was a busy day on the macroeconomic front with policy rate decisions coming from home and abroad.

 

At midday, the Bank of England surprised the market with a resumption of its quantitative easing programme, saying it will pump £75bn of new money into the economy. While a move was in the pipelines, most had anticipated the central bank to hold off for at least another month and thought that a lesser £50bn would be set aside. The Bank of England's QE initiative has lain dormant since 2009, after it spent £200bn buying up assets such as government bonds from banks in an effort to lubricate the banking system in the UK. The Bank’s key lending rate was left at the historic low of 0.5%.

 

“The decision to take this step has been greeted positively by the street as an indication that public figures in Europe are taking the risk of a recession seriously and are prepared to take decisive measures to try and prevent events from spiralling out of control as they did three years ago. This has added to hopes that policy makers on the continent will follow suit in the near term and come up with a decisive plan to deal with the Greek debt and bank recapitalization problems,” according to market analyst Colin Cieszynski from CMC Markets Canada.

 

While the European Central Bank also kept hold of its own interest rates, leaving them at 1.5%, it announced several new measures aimed at the provision of liquidity to the financial system, including a €40bn covered bond purchase programme, two 12-month refinancing operations and six three-month operations in place until next June with full allotment. On the whole, and at first glance, the decisions announced by the ECB seem to have been largely ‘in line’ with what was expected by the consensus, although it is not clear what consensus had been expecting as far as non-standard measures are concerned.

 

Markets across Europe extended Wednesday's gains on hopes that the European Union is planning for a co-ordinated recapitalisation of the continent's banks. European Commission President Jose Manuel Barroso has said that he is pressuring member states to take co-ordinated action to recapitalise banks in the region. German Chancellor Angela Merkel has spoken out, saying that “Germany is prepared to move to recapitalise”. Meanwhile, there were reports that European regulators are planning a new round of stress tests for banks in order to evaluate the impact of greater write-downs as a result of a potential default.

 

Financial stocks were in demand with Prudential, Aviva, Standard Chartered and Barclays registering strong gains.

 

However, it was the miners who dominated the markets today, helped higher by surging copper and silver prices, which rose 4.6% and 3.8%, respectively. Eurasian Natural Resource Corp, Antofagasta, Kazakhmys and Vedanta Resources led the advance. CMC’s Cieszynski added, “Stocks and commodities have continued to rise this morning suggesting increased recognition that recent bearishness and the pricing in of another 2008 style financial crisis and deep recession may have been overdone.”

 

Xstrata was in demand after it said it has secured long-term energy supplies for its North-west Queensland operations in Australia after a two-year selection process.

 

Engineering firm IMI was a notable performer, finishing over 11% higher after it confirmed that current trading has been in line with expectations.

 

Eastern Europe-focused oil producer Exillon Energy rocketed nearly 23% after announcing that it has discovered oil at the south-eastern part of the East EWS I field in Russia.

 

Ukraine-focused iron ore producer Ferrexpo jumped over 10% after it said pellet production in August was the second highest in the company's history at 0.9m tonnes.

 

A big mover was AIM-listed consulting and business services group Mouchel after the firm revealed that after an accounting error and higher provisions for contract risks, profits would be well under expectations. Not helping matters either was the resignation of the chief executive. Shares plummeted by over a third.

 

FTSE 100 - Risers

 

Prudential (PRU) 590.00p +11.74%

IMI (IMI) 759.00p +11.45%

GKN (GKN) 182.40p +10.34%

Antofagasta (ANTO) 1,042.00p +10.21%

Eurasian Natural Resources Corp. (ENRC) 611.50p +9.69%

Standard Chartered (STAN) 1,325.00p +8.83%

Lloyds Banking Group (LLOY) 35.87p +8.68%

Kazakhmys (KAZ) 847.50p +8.31%

Xstrata (XTA) 885.70p +8.25%

Essar Energy (ESSR) 269.10p +8.20%

 

[No6]

I've posted some of this guy's youtube videos before as they are quite helpful. Real Life Trader series (this is from a spread betting company CMC, so is a little self promoting, but worth a look).

 

http://www.youtube.com/watch?v=zXIqRUmR9qE&feature=player_profilepage

 

http://www.youtube.com/watch?v=lmZX9ktxMEY&feature=relmfu

[John Doe]

Followed up by the BoE announcing £75billion of money printing supposedly for the economy. We know that most will end up with the banks and speculators who will no doubt use it to ramp up commodity prices. Already this morning the big FTSE commodity companies are going like gangbusters. More price inflation down the line.

 

Yep, but not sure if it will last long this time.

 

The pre-emptive nature of the QE announcement (and co-ordinated ECB flooding of the continent with liquidity at the same time) has me worried they know what's coming in the next few weeks.

 

It will be interesting to see what happens now.

 

I think I'll just sit on the sidelines this time, with the occasional spreadbet for sport.

[drbubb]

What do you think about this LT chart?

 

Possible forecast for FTSE, showing cyclical low point about 2020 (post #65:BigBearMkt?)

 

[bob monkhouse]

NYSE:BSI

 

72% dividend yield...!!

[bob monkhouse]

What do you think about this LT chart?

 

Possible forecast for FTSE, showing cyclical low point about 2020 (post #65:BigBearMkt?)

 

 

Looks grim! Is that your own chart Bubb? I take it with such a deflation the value of everything go's down...other than cash?

[DontPanic]

What do you think about this LT chart?

 

Possible forecast for FTSE, showing cyclical low point about 2020 (post #65:BigBearMkt?)

 

 

To me it shows that over the long term the FTSE has been a good investment and it looks even better if you plotted the total return including dividends.

The 2000 internet bubble tends to distort the upward trend.

 

Not sure that the resistance levels from the 1980s and 1990s which are used to get the 2020 figure are relevant today.

[No6]

Another good video here in the series of trader videos. Talks a little more about the mind in trading.

 

http://www.youtube.com/watch?v=4yGeF-yL5iU&feature=relmfu

[No6]

And some say that trading is scary.

 

http://www.youtube.com/watch?v=TWfph3iNC-k&feature=youtu.be

[bob monkhouse]

Yes, I liked the Briggs one...the other lady works with NT...

[drbubb]

Looks grim! Is that your own chart Bubb? I take it with such a deflation the value of everything go's down...other than cash?

My chart.

But the dates wrong. Off to the right should be "2015", not "20"

[No6]

Yes, I liked the Briggs one...the other lady works with NT...

 

I quite like his youtube channel, the weekly market analysis is a useful guide to what may happen in the week to come. He also posts some useful videos during the week via Twitter.

 

Did notice on the Naked Trader website that he mentioned the technical analysis seminars. As NT doesn't consider himself to be a technical trader, it would be interesting to see what he contributes to the seminar.