The impact of economic indicators on the XJO (intraday)

Chart Forum » Markets » The impact of economic indicators on the XJO (intraday)

«« Previous Next »»

Thread Start New Thread
Last Poster Posts Pages Last Post

Author

Message

deanrosario

Member

Post Number: 873
Registered: 11-2002

Rating: N/A
Votes: 0


Wednesday, October 05, 2005 - 12:31 pm:

There are various factors that have an impact on the movement of the XJO within a particular day.

The opening 10-15 minutes appears to be largely influenced by major moves on overseas markets; or, really, I should say, the US market.

Additionally, during the trading day, news affecting any of the major ASX stocks (basically ASX20) will also move the index significantly.

This effect is compounded by the "similarity" between some of the major stocks.

E.g. good/bad news for RIO will, more likely, not only drive RIO's price up/down, but is also likely to impact BHP, too. Same occurs with the big 4 banks.

I reckon, an often overlooked driver of intraday movements on the XJO are Economic Indicators.

The term "economic indicators" covers a wide range of data that is mainly published by official agencies (e.g. RBA, ABS); but also includes data provided by the private sector (e.g. ANZ's job advertisements).

Today, the ABS released figures for August 2005 "Building Approvals" at precisely 1130 a.m.

The market obviously didn't like the 8% fall (pretty sure the fall was 8-9% the previous month, too).

In Australia, economic data is usually released at 1130 a.m. and, I reckon, intraday traders should make themselves aware of such releases.

From my observation, the actual figure is irrelevant, it's how the market reacts after the release that is important.

PS: The impact can sometimes be transient - even lasting 10-15 minutes before a reversal!

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." George Soros

cjb

Member

Post Number: 68
Registered: 02-2003

Rating: N/A
Votes: 0


Wednesday, October 05, 2005 - 01:52 pm:

Hi Dean,

I caught the move but not the news until a bit later. It is interesting how different economic news affects the XJO. Some news affects companies directly while other news influences the price indirectly. Today is an example. I would not think the housing info would have had much of an effect on BHP yet it fell inline with the ASX20 in general. I think the index/fund managers have been busy today doing some adjustments today.

CB

deanrosario

Member

Post Number: 876
Registered: 11-2002

Rating: N/A
Votes: 0


Wednesday, October 05, 2005 - 03:03 pm:

Hi Chris

I've found absolutely no logic to the moves after the release of news.

On 31 August 2005, Building Approvals for July were released and there was a FALL 8.9% compared to the previous month, which had seen a rise of 0.2% compared to that previous month.

You'd expect a bit of negativity on 31-08-05, after that big change in sentiment.

Yet this is what happened!.

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." George Soros

morton

Member

Post Number: 30
Registered: 05-2005

Rating: N/A
Votes: 0


Thursday, October 06, 2005 - 04:03 pm:

there's a pandemic, and it's got nothing to do with birds. I knew fear was a strong emotion that could move the market. But his fear has hit the market with the force of a million trains.

better start releasing the "anit-fear" vaccine.

anyone know who makes that vaccine, i might buy some of those shares?

deanrosario

Member

Post Number: 894
Registered: 11-2002

Rating: N/A
Votes: 0


Monday, October 10, 2005 - 11:21 am:

ANZ Job ads for September (sometimes used as a leading indicator) and Housing Finance figures for August are due to be released at 1130.

Be prepared for a move on the XJO soon.

Actual employment/unemployment figures are due to be released on Thursday this week.

PS: All indicators so far, to me, say we're going to move up; but let's wait for the buyers to show their hand first. Again, Fibonacci traders would be looking at pushing the market to 4487ish I think.

(Message edited by deanrosario on October 10, 2005)

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." George Soros

longshanks

Member

Post Number: 169
Registered: 11-2004

Rating: N/A
Votes: 0


Monday, October 10, 2005 - 12:50 pm:

deanrosario

Thanks for starting this thread! Have you had a look at 'If it's raining in Brazil buy Starbucks'? Good read, even if it does have a US focus.

Having a macro perspective could give one a better idea why a move has happened, or why a move 'failed'. Of course its not so easy to do....it's a bit like a jigsaw puzzle...for example, if we think a stock like DJS is about to break to the upside and then we get bad consumer spending figures released, expect a reduced possibility of the break to the upside happening. Even if it does hold, chances are the sector will be badly effected, which will flow on to the stock...etc...etc

Cheers

ls

deanrosario

Member

Post Number: 896
Registered: 11-2002

Rating: N/A
Votes: 0


Monday, October 10, 2005 - 01:15 pm:

Thanks LS, but note my focus is purely on the move intraday so please be wary of any of my comments if you have a longer term view.

My only other comment would be that the market's reaction to the news will always depend on the prior expectation; so, for instance, "consumer sentiment" figures for October 2005 are due to be released at 10:30 on Wednesday.

Last month sentiment dropped 13.3%, so a fall of less than this could actually cause the retailers to rise (?) if the market has factored in greater negativity than what actually occurs.

All very interesting (and confusing) so I just try to watch and follow rather than take the lead.

Today's figures seem pretty innocuous. The market has tried rising but there's been no significant direction.

It's interesting to note that the Dec SPI has been rising during lunchtime but the XJO has been pretty much flat.

Something will have to give after lunch - either the XJO catches up to the SPI or the futures' traders give up.

PS: Haven't read that book, but the title in itself sounds interesting!

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." George Soros

deanrosario

Member

Post Number: 901
Registered: 11-2002

Rating: N/A
Votes: 0


Thursday, October 13, 2005 - 12:16 pm:

Unemployment figures were released at 1130 a.m.

Excellent opportunities exist for index daytraders after such events. The mood may not last so limit exits work for me. There's no need to be greedy because there's always another opportunity this afternoon; or, at worst, tomorrow.

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." George Soros

zoso

Member

Post Number: 90
Registered: 10-2003

Rating: N/A
Votes: 0


Thursday, October 13, 2005 - 12:33 pm:

Hi Dean,

Thanks for the insight. I hope to managed to capture a part of the move.

I had a feeling it would break to the downside but alas it was not one of my set ups so I couldn't trade it. Besides, prior to the break there was a bit too much volatility for me with neither bulls nor bears in total control.

I see the Aussie 200 is off-line ATM - problems with the underlying market? The underlying seems to be functioning OK to me?

Cheers,

Paul.

zoso

Member

Post Number: 91
Registered: 10-2003

Rating: N/A
Votes: 0


Thursday, October 13, 2005 - 12:37 pm:

Please disregard my last comment. Apparently they are experiencing technical difficulties with the underlying market.

Dean - as an aside - do you have any idea what's happened to the NQoos website? Can't get any of my links to take me there.

deanrosario

Member

Post Number: 903
Registered: 11-2002

Rating: N/A
Votes: 0


Thursday, October 13, 2005 - 12:41 pm:

Yes, Paul I managed to capture my usual trade, which, of course, was only a small part of that amazing 15 minute period.

Don't forget that CMC ASX200 is based on the SPI not the XJO.

The SYCOM system at the SFE has been down since 1201 p.m. today, therefore, all trading on the SFE has been suspended and, hence, CMC has suspended its ASX200 index trading.

The XJO works on a different system - the ASX's SEATS system - hence, it is still operating, but don't expect it to move too much whilst the SFE is down.

Dean

PS: Just saw your post - sorry, no idea re:Nqoos

(Message edited by deanrosario on October 13, 2005)

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." George Soros

zoso

Member

Post Number: 92
Registered: 10-2003

Rating: N/A
Votes: 0


Thursday, October 13, 2005 - 01:07 pm:

Dean,

I know you try and take the meat out of intraday trends and therefore need to see the bigger picture but do you take your trading signals exclusively from a 15 min chart?

For profit exits, Do you employ: a points profit target, a trailing stop, combination of both (whichever is hit first determines the exit), or some other method?

In order to allow profits to run, as you know trend traders normally use some form of trailing stop but I'm just wondering what you find more practical? I'm currently using a combination method - reasonable results but I'm sure they can be improved upon.

Cheers,

Paul.

deanrosario

Member

Post Number: 906
Registered: 11-2002

Rating: N/A
Votes: 0


Thursday, October 13, 2005 - 01:27 pm:

Paul

I use a combination of charts - 5, 10, 15 and 30; but mainly 10 and 15.

I would love to be able to follow the trend but, have found it difficult for 2 reasons

1. No matter how hard I try to be indifferent, I do still suffer from "traders' regret" if I had a good profit and it turns into a small loss or break even, due to trying to follow the trend down.

2. From my observation, the SPI does, on occasion, have nice 20+ point moves after my entry, but, more often than not, a trailing stop placed below swing points on any of the above intraday charts, usually results in little extra gain and is, therefore, not worth the risk to my health!

So, a long answer to say I use limit exits - usually close 50% (this can vary) of the position after 3-5 points and the remainder at 7-10 points.

Dean

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." George Soros

cjb

Member

Post Number: 71
Registered: 02-2003

Rating: N/A
Votes: 0