Just for a laugh Sunnyskies, the XJO thread is calling another...

Just for a laugh Sunnyskies, the XJO thread is calling another correction. They have them every week, just like Tuesdays. They'll get it right one day.

When the market is making record peaks, it is always at risk of a correction. Underlying stocks might hurt a bit, but they would recover quick enough, and if they didn't, there would be plenty of time to ditch them, preserve capital and leverage up into a market bottom.

Its derivatives traders like myself that have to be more careful because we can lose stacks overnight on expiring instruments that don't have time to recover before the market does.

If the Dow holds up tonight the Australian market will go ballistic tomorrow on weight of money. Today the index fell because banking stocks and Telstra retreated on the correcting $au. The $au came off recent highs because the RBA started selling $au and buying $us to smooth out the transition to a higher currency. Lower PPI figures exacerbated the effect because it eased interest rate fears, further weakening the dollar. When the $au is weakening, high yielding blue chips suffer from outflows of international funds chasing investments with strengthening currencies. Looks like all the money went into China today, where the currency is strengthening.

Strengthening currency will be good for NWS, BHP and RIO, but the banks will bounce back from their support levels tomorrow and will drag the index back up to record levels imo unless the CPI is really, really bad.

BHP has quarterly production figures out tomorrow and this will also be a drvier of market sentiment if they exceed or disappoint expectations.