Australia & NZ Archives - Page 67 of 95

February 25, 2013

ASX 200: Small caps warning

The ASX 200 is headed for another test of resistance at 5100 on the hourly chart. Breakout would signal continuation of the primary advance. Reversal below 5050, however, would indicate another test of 5000.
ASX 200 Index
The monthly chart shows strong momentum but retracement to test the new support level of 5000 is likely in the weekly (if not monthly) time frame. Respect of support on the weekly chart would confirm a primary advance with a long-term target of 6000*.

* Target calculation: 5000 + ( 5000 – 4000 ) = 6000

ASX small-caps are still doing badly, with the ASX 50 [$XFL] out-performing the $XSO by a substantial margin. That is the opposite of what one would expect in a bull market and should be treated as a warning to exercise caution.

ASX 200 Index

February 20, 2013

Aussie Dollar weakens

The Aussie Dollar is headed for a test of primary support at $1.015 on the weekly chart. Failure of support would offer a target of $0.96, while respect would signal another attempt at $1.06. Reversal of 63-day Twiggs Momentum below zero suggests a downward breakout.

Aussie Dollar/USD

February 18, 2013

ASX 200: The scramble for yield

The ASX 200 broke short-term resistance at 5050 on the hourly chart before retreating to test its new support level. The index is advancing in layers of 25 points (5000 >> 5025 >> 5050 >> 5075) and shows no signs of abating. But retracement to test the new support level of 5000 remains likely in the larger time frames. Respect of support on the weekly chart would confirm a primary advance, with a long-term target of 6000*.

ASX 200 Index

* Target calculation: 5000 + ( 5000 – 4000 ) = 6000

One area of concern: the advance is being driven by a scramble for yield, with blue chip stocks in the ASX 50 [$XFL] out-performing mid-caps [$XMD] by a wide margin — the exact opposite of what one would expect in a bull market.

ASX 200 Index

The situation is even worse when comparing to small-caps [$XSO].

ASX 200 Index

February 17, 2013

Industry policy cannot offset the Australian dollar | MacroBusiness

Houses & Holes at Macrobusiness writes:

Adding a couple of $100 million to industry innovation support is just not going to cut it. Our authorities should do exactly what the rest of the world is doing. Go to the G20 and join the chorus of indignity directed at currency manipulation, come home and drive down using every available tool. That is essentially what the recommendations of the Manufacturing Taskforce aimed at doing. If you think nothing can be done, ask yourself, why are we the only ones not doing it?

February 14, 2013

Aussie Dollar tests trendline

The Aussie Dollar retreated above its former support level at $1.03 on the daily chart. Breakout above $1.04 — and the declining trendline — would indicate a bear trap, while reversal below $1.03 would test primary support at $1.015. Retreat of 63-day Twiggs Momentum below zero would favor a down-swing.

Aussie Dollar/USD

* Target calculation: 1.03 – ( 1.06 – 1.03 ) = 1.00

February 13, 2013

ASX 200 passes first test

The ASX 200 passed its first test after breaking long-term resistance at 5000. The index retraced to test the new support level [test #1] in the first hour of trading today but rallied strongly thereafter. Respect of support strengthens the breakout signal but expect further tests in the weeks ahead. Respect in the Daily and Weekly time frames would confirm the primary advance, with a long-term target of 6000*.

ASX 200 Index

* Target calculation: 5000 + ( 5000 – 4000 ) = 6000

February 11, 2013

ASX 200 tests 5000

The ASX 200 continues to test resistance at 5000. Rising troughs on 13-week Twiggs Money Flow indicate strong buying pressure. Breakout is likely and would offer a long-term target of 6000*. Respect of resistance, while unlikely, would suggest a correction to 4500.

ASX 200 Index

* Target calculation: 5000 + ( 5000 – 4000 ) = 6000

February 10, 2013

Electric version of Holden Commodore

Barry Park at Drive.com.au takes a ride in a battery-powered version of Holden’s popular family car:

EV Engineering, the Port Melbourne based start-up that has taken nine Commodore family cars, gutted them of their V6 and V8 petrol drivetrains and replaced them with swappable batteries, a recharging cord and a powerful electric motor, is finally ready to trial its technology…..On paper, the EV Engineering Commodore produces 140kW of power and an impressive 400Nm of torque almost as soon as you squeeze the throttle. Engineers wanted to match the regular Commodore’s 8.7-second sprint from rest to 100km/h, but the way the battery-powered car builds speed means it can gather the same speed within 8.5……

February 7, 2013

Aussie Dollar: Momentum falling

The Aussie Dollar is again testing support at $1.03 on the weekly chart. Respect would indicate further consolidation — and a test of resistance at $1.06 — while failure would offer a target of parity ($1.00). Reversal of 63-day Twiggs Momentum below zero would favor a downward breakout.

Aussie Dollar/USD

* Target calculation: 1.03 – ( 1.06 – 1.03 ) = 1.00

February 5, 2013

EconoMonitor » Australia’s Economic Outlook—The Nauru Option?

Satyajit Das writes:

In a 29 November 2010 speech entitled The Challenge of Prosperity, RBA Governor sought to illustrate the combined effects of the gains of the appreciating terms of trade position and the A$ strength in the following terms: “In 2005 a shipload of iron ore was worth the same as around 2,200 flat screen televisions In 2010, the same shipload was worth around 22,000 flat screen TVs”. In a Freudian slip, the RBA Governor identified a fundamental issue with Australia’s economic model.

Australia may have substantially wasted the proceeds of its mineral booms, with the proceeds channelled into consumption. The nations did not channel enough into strategic long term investments or develop a new industrial base. According to one study, the commodity boom increased government revenues between 2002 and 2008 by around A$180 billion of which A$36 billion was used to repay public debt, A$69 billion was placed into the Future Fund (to meet the cost of public sector superannuation liabilities) and $75 billion was transferred to households in the form of tax cuts and payments.