by Gabriel Andre on November 19, 2008
Totally positively correlated with the S&P/ASX 200, the All Ordinaries Index (ASX: XAO) has reached yesterday a new low since August 2004. It closed 3,513.10 points. This is a key level. Actually it’s more a key area rather than a precise point. Say that between 3,400 and 3,500 points there should have some massive buying interests.
Of course the fundamentals that drive the current price action are really bearish. The momentum indicators are also really bearish. The MACD and the technical Momentum Index remain bearish and they plunge more deeply towards extreme low levels.
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by Kris Sayce on October 15, 2008
How else can we identify how volatile markets are? Over the last few days we’ve looked at the CBOE VIX index and the number of 50 plus points movements on the S&P/ASX200.
Another measure of how volatility has increased over the past few years is to look at… Volatility. The best place to find this in Australia is on the exchange traded options market where the volatility number can be seen every day.
Without going into too much detail, the historical and implied volatility are key inputs into working out a fair price for an options contract. As share prices move wildly about the option price will also move and this will have an impact on the price traders are prepared to pay or receive in premiums.
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by Gabriel Andre on October 14, 2008
Falling markets are almost always faster than rising markets. It means that the “panic” generated by the bears is much more powerful than the “exuberance” generated by the bulls.
The Materials (ASX:XMJ) sector of the ASX is a perfect example of this rule. Remember that the GICS Materials Sector encompasses a wide range of commodity-related manufacturing industries. Included in this sector are companies that manufacture chemicals, construction materials, glass, paper, steel producers, forest products and related packaging products, and metals, minerals and mining stocks.
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