Articles for: Technical Analysis

Many commodities and currencies have experienced steep increases in recent months. Oil is up almost 100%, copper over 80% and the Aussie 30%. So is it time to start shorting?

What was the SEC thinking leading up to July 6th 2007? That is the day when the uptick rule - a rule in place since 1934 to help keep markets orderly - was removed. Famous Investor Lazlo Birinyi has been among those calling for its reinstatement for some time and is now joined by several members of US congress. It’s about time!

It should be an interesting week ahead. At time of writing (Wednesday May 27th) several currency pairs are trading close to major 50% milestones or “half points.”

Banking executives, fund managers, investors, retirees watched a little nervously early this week as the short selling ban on Australian local banks was lifted. Was an avalanche about to happen?

In recent articles I have been illustrating some of the difficulties that a market can present in trading, and Santos (STO:ASX) has been giving more than a few of them lately! In Issue 305 I showed a weekly chart which had the market sitting on the mid-point of the range from the June 2008 all-time high and the October 2008 low. At the time, I said that we needed to wait for a signal from the market, either that it was going to hold above the 50% level or that it was going to head lower. Chart 1 updates this earlier chart.

How can it be? I speak here of GTP. They have gone into administration in the last few days. Administration is like Chapter 11 in the USA – it is a last gasp before the final blow is dealt. It happens generally because a company has significantly more debtors than it has cash. This happens because usually its model or management or a combo of both is flawed. And for shareholders and lenders it is like throwing more good money after bad and one day comes when financiers say enough is enough.

We have seen a soft market this week in global indices and the key question when we see such easing is: will this be an easing or the beginning of the next slide down?