# The stock market is crashing....



## wayneL

...in Saudi Arabia  

http://www.zawya.com/equities/sa/

hmmmmmm.... what, if anything, is this telling us?


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## YOUNG_TRADER

War?

I don't know? ? ?  ? ?


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## nizar

wayneL said:
			
		

> ...in Saudi Arabia




LOL - nice one, u had me scared for a bit!


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## michael_selway

YOUNG_TRADER said:
			
		

> War?
> 
> I don't know? ? ?  ? ?




yeah wayneL, any ideas why?

seems to be against the trend of other indices.

Btw wayneL u still a Bear?

thx

MS


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## nizar

YOUNG_TRADER said:
			
		

> War?
> 
> I don't know? ? ?  ? ?




This was discussed on shares forum, by "Sam" around end of March, i post his thoughts below:



> I'm working in Saudi Arabia at the moment, and the 'correction' has been long expected, the market has risen in excess of 600% since 2003. This increase has been based on pure speculation trading with total disregard being paid to balance sheets company announcements etc.
> 
> It seems the trigger for the collapse which started in late Feb was SAMA (Saudi Arabian Monetry Authority) announcement to limit the markets movement to gain/loss 5% daily, (previously 10%).
> 
> This upset many of the richer Arabs that invested heavily in the market and where making good returns and decided to pull all their money out as a show of protest to the government.
> 
> Efforts in the last few days from SAMA to stabilise the market have been to split shares and introduce trading for foreign expat residents..
> 
> However with the activities of the past month and the extremely heavy losses suffered by many it seems their is now caution in the air.
> 
> Prior to the 'correction' market capitalisation was around 54 Billion SR (%2.75 AUD Conversion) This figure dropped off at a rate of greater than 5 Fold in the days following.
> 
> So the thinking of opening the market to Expats was to inject a fresh revenue stream. I'm not sure of exact figure but Expat Remittances outside the Kingdom is an extremely large number, and the Kingdom is hoping that this money is pumped into the local market to stabilise it.
> 
> All sounds a bit odd ? I agree..
> 
> But interestingly the market has risen by 9.8 % over the past two days. with each individual stock on the Saudi Market growning at just under 5% a day.
> 
> See www.tadawul.com.sa (there should be an english link on the page)
> 
> Bottom line, from my observations the trend defies convention.
> 
> As for the ME economy you might need to look at this in two sections the GCC and other MEA, the GCC (Gulf Country Coperations, Saudi, Kuwait, UAE, etc) are showing solid growth with surplus results for FY05. This is mainly driven by the high oil prices that we have seen.
> 
> Other Middle East Areas I'm not to familiar with.


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## wayneL

Iceland is having a few palpitations too


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## Smurf1976

When the market gets out of touch with fundamentals then it's a question of whether the fundamentals catch the market or the market returns to the fundamentals. Either way ridiculously high valuations don't last forever. Not my original thought, just the lesson of history.

A decent p/e for stocks is regarded as being around 14 based on trailing (not forecast) earnings according to most analysts. 7 is cheap and 28 is bubble territory.

A decent rental yield for property is considered to be 7% according to many real estate agents and other experts. 10% is cheap and 5% is a bubble.

None of the above is my original thought, just repeating what many others have said on numerous occasions. 

As for my own thoughts, "the market will crash once most are convinced that a crash has been avoided".


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## kevo

Liquidity might be drying up at the margins. The Japanese carry trade is ending. Many people are bearish on the States as well. No worries, a few new highs ahead. Gold is screaming crisis somewhere. Kev www.kontentkonsult.com


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## wayneL

The yanks certainly weren't bearish tonight. Everything... and I mean everything up. Stocks, Gold, Oil, silver, bonds, the whole flippin' shebang... except the US$ ... it's taking it where it hurts.

Oil and metals at highs   WTF is going on. These are screaming bear omens.

But punters are buying stocks with their ears pinned back. I don't know!!!! It's all bad I tell you, blah blah blah. But, you just gotta take the signals when they come up, so I'm long everything ahahaha


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## nizar

wayneL said:
			
		

> The yanks certainly weren't bearish tonight. Everything... and I mean everything up. Stocks, Gold, Oil, silver, bonds, the whole flippin' shebang... except the US$ ... it's taking it where it hurts.
> 
> Oil and metals at highs   WTF is going on. These are screaming bear omens.
> 
> But punters are buying stocks with their ears pinned back. I don't know!!!! It's all bad I tell you, blah blah blah. But, you just gotta take the signals when they come up, so I'm long everything ahahaha




Nice one.... good 2 c ur doing the right thing, its much easier to be a bull in a bullmarket   

The trend is ur friend...


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## tech/a

*I think its very normal for so much bear sentiment.*

Its like having a LARGER Profit and succumbing to the temptation to take profit,only to see the stock move up another 400%.

There is absolutely nothing I have seen that gives credible evidence to a pending crash.
I see much which gives credence to a boom that will and can continue due to excessive demand.


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## professor_frink

wayneL said:
			
		

> The yanks certainly weren't bearish tonight. Everything... and I mean everything up. Stocks, Gold, Oil, silver, bonds, the whole flippin' shebang... except the US$ ... it's taking it where it hurts.
> 
> Oil and metals at highs   WTF is going on. These are screaming bear omens.
> 
> But punters are buying stocks with their ears pinned back. I don't know!!!! It's all bad I tell you, blah blah blah. But, you just gotta take the signals when they come up, so I'm long everything ahahaha




WTF indeed wayne, bit of an unusual evening! looks like it's gunna be a rip snorter of a day today


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## tech/a

> But punters are buying stocks with their ears pinned back.




Wayne do you really think that this bull market is being underpinned by "punters".
Insto's do the volume and insto's are enjoying un precedented return on their products.Superfunds are booming and thats what they want to be able to take advantage of.

In 87 at 2700 points the pudints cried loudly,over priced over stretched over valued,today at a 500% increase the same cries are heard.
Fear of loss is a very compelling emotion.


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## bullmarket

I suppose a lot depends on how people differentiate a correction from a crash.

About 4 weeks ago I uploaded a spreadsheet that calculates the average PER for various market indexes.  Back then the average prospective weighted PERs (by mkt cap) for the ASX50 to ASX300 indexes were all in the ~16-17 range.  I haven't updated the spreadsheet with the latest prices but obviously the PERs would be a little higher now.

There used to be a ball park rule of thumb that said a fair PER was 20 minus the inflation rate. With inflation at ~3% then I see a fair market PER as ~17 atm.

_Blind Freddy can see that overall our market is not cheap but I don't see it as grossly expensive either.  Therefore I'm not expecting a 'crash' atm, especially based on company fundamentals.  But having said that, looking at the weekly XJO chart I think it would only take a reasonably credible hint from somewhere that inflation was looming (due to high oil prices or whatever) and that will take a lot of steam out of the market._

Imo, a retrace back to the ~4800 (~9% drop) January support levels would be a _'healthy correction'_ and not a crash if looking at the overall long term scheme of things of the bull market that started after the '87 crash (now '87 was a crash   )

A continued fall below 4800 then obviously all bets are off as that would be a pretty strong signal for me that we are starting a much more likely sustainable bear market.

Finally, all of the above should be taken in context depending on what time frames you invest/trade in.

Anyway, just food for thought 

cheers

bullmarket


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## tech/a

> now '87 was a crash




What then was the 3 yrs 2000 to 2003 same fall almost.

BOTH in my view are corrections in a continuing Bull run.
We now have another 3000,000,000 thats right 3 thousand million Consumers let loose on the worlds economies.
Un precedented demand and un precedented growth.
We are all going to live through the economic mother of booms never to be seen again.
Demand drives growth---everywhere.


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## RichKid

One way to maybe prepare for a crash, or any downturn, is to be overly cautious and look for corrective waves and only trade smooth trends, might mean joining an impulsive wave late once the correction is over but you would also be avoiding the choppiness that normally precedes a crash, although we say it just drops off a cliff face cautious traders or active investors might be able to protect the downside. It does mean giving back more profits though. 

Not sure if my hindsight analysis will work!! I doubt it but worth a thought.  I'm just going to diversify (commodities, retail, tech, utilities etc) and follow my stops. if I 'feel' uncomfortable it'll just mean lowering my overall exposure to stocks, might mean missing out on profits but I don't want to be greedy, the basic precept is to survive in this game.


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## tech/a

Why Rich? (diversify)

Resourses are booming.

Thats like being in a property boom and buying caravans???!!!


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## bullmarket

Hi tech/a 

If you see '87 as a correction then that is fine by me - I don't have aproblem with that.  If you look back at the first line of my previous post you will see I said a lot depends on how people differentiate a correction from a crash. ......imo it's simply a case of you saying tomayto and me saying tomahto 

I just called it as I see it and to be honest, there are more important things going on atm than 'arguing' over whether a particular event(s) (which everyone can see on charts and judge for themselves) is technically a 'crash' or 'correction'

cheers

bullmarket


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## brerwallabi

Make the most of today it could be the best day of the year, I have 2 computers going and about 10 windows open on each, here we go, good trading to all.


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## tech/a

Bullmarket.

I was passing an opinion on the DJI not your post.

I dont give 2 hoots wether you or anyone else agrees with my opinion.
I also dont give a hoot if people agree with you and not with me.
Its not about you or your opinion its about the DJI and crashing.

By the way,Tomato.


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## bullmarket

no problem tech/a 

You quoted an extract from my earlier post and so your question was directed to me at least as well as anyone else you had in mind. 

I also specifically mentioned the weekly XJO chart in my post you quoted from and since *you did not mention the DJI or any other index at all in your reply * there is simply no reason why anyone should not think you included the XJO in your comments. 

*My original post wasn't even directed to you personally. It was directed to all who read this thread.*

If you want to be taken seriously then maybe consider being more specific in your posts and say what you mean and mean what you say. 

see you in the swamp 

bullmarket


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## wavepicker

bullmarket said:
			
		

> Hi tech/a
> 
> If you see '87 as a correction then that is fine by me - I don't have aproblem with that.  If you look back at the first line of my previous post you will see I said a lot depends on how people differentiate a correction from a crash. ......imo it's simply a case of you saying tomayto and me saying tomahto
> 
> I just called it as I see it and to be honest, there are more important things going on atm than 'arguing' over whether a particular event(s) (which everyone can see on charts and judge for themselves) is technically a 'crash' or 'correction'
> 
> cheers
> 
> bullmarket




Most professional analysts classify a correction of 15% or greater as a crash.

As for the market continuing to boom, in my opinion  at present would be a very good time to be very cautious rather than getting caught up in all the hype. With rates of change in price such as these, I beleive we should be looking for evidence to take contrarian positions (for reasons I will expalin in  later posts)  History has proven over and over again that exponential price patterns reverse violently when they are done. If people think we are going to have perpetual upward price movements then they are deluding themselves and others .


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## bullmarket

Hi wavepicker

Yes I agree with you re being cautious atm but as I mentioned earlier I see our market (XJO) atm as basically about fair value (for the reasons I gave earlier) and if I had to put either a cheap or expensive bias on our market's value I would have to say imo the market's value is biased towards looking a little pricey overall.....bu that doesn't mean there isn't possibly a little more upside to come in the short term.

Re differentiating corrections from crashes, for me it's largely irrelevant as people will interpret the same given event on a chart differently......ie...whether someone uses a 10% or 15% benchmark doesn't really mean much to me.....and imo you would also have to specify a time frame for the drop to occur within for the drop to be defined as a crash or correction.

Obviously a 10-15% drop in say 12 months is not a crash (for me at least) but the same drop in say a few days or 1-2 weeks could be seen as a crash by some.....but at the end of the day I don't see what it matters as 10-15% drop is still the same no matter what you call it 

cheers

bullmarket


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## happytrader

The difference between a stockmarket correction and a crash.

I remember reading this explanation in the Sydney Morning Herald after the 1987 crash complements of an institutional trader.

It went something like this

'A correction is when YOU lose money and a crash is when we all lose money'

Cheers
Happytrader


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## bullmarket

I like it happytrader 



			
				happytrader said:
			
		

> The difference between a stockmarket correction and a crash.
> 
> I remember reading this explanation in the Sydney Morning Herald after the 1987 crash complements of an institutional trader.
> 
> It went something like this
> 
> 'A correction is when YOU lose money and a crash is when we all lose money'
> 
> Cheers
> Happytrader




it's as good a definition as any   

cheers

bullmarket


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## clowboy

to anyone who was trading/investing in 87,

Did anything survive the "crash"

Ie petrol stocks, food retailers etc?



Thanx


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## wayneL

michael selway said:
			
		

> Btw wayneL u still a Bear?




Yes, but I'll clarify. That doesn't mean I think the the stock market will crash tommorrow. Markets are ruled by sentiment and will do what they will. I'm bearish on the future for a number of reasons.



> nizar said:
> 
> 
> 
> 
> Nice one.... good 2 c ur doing the right thing, its much easier to be a bull in a bullmarket
> 
> The trend is ur friend...
> 
> 
> 
> 
> 
> Yes indeed, only a &$%wit would trade against the trend. I see no conflict between being a bear and buying stocks that are moving up... I ain't investing, I'm trading.
> 
> 
> 
> 
> "tech/a" said:
> 
> 
> 
> 
> There is absolutely nothing I have seen that gives credible evidence to a pending crash.
> 
> Click to expand...
Click to expand...



Do I think there will be a crash? Not really. I often use the term crash, but not in the sense of '87. But at some time in the future we will have a bear market... could be tommorrow, could be whenever. 

But if you have eyes to see and ears to hear, you have to recognise the risks inherent in this world economy. Listen to Jim Puplavas show on the weekends and there is bags of credible evidence for future problems.

Now did I say the market is about to crash? NO! But I maintain my bearish stance, and at this stage, all that means to me is to ensure liquidity of my assets.



			
				 "tech/a" said:
			
		

> I see much which gives credence to a boom that will and can continue due to excessive demand.




That could be true too. But if so, bye bye earth. There are already scientists saying we are past the point of no return. Now thats bearish. 



			
				 "tech/a" said:
			
		

> Wayne do you really think that this bull market is being underpinned by "punters".




Absolutley! Sentiment is more important than anything. Insto's are not immune to exuberance... and perhaps lead the mug punters like us on this.

There is zero risk premium (to use the term liberally) in this market. Therefore buying at todays prices ia a punt...there is no value overall.


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## RichKid

tech/a said:
			
		

> Why Rich? (diversify)
> 
> Resourses are booming.
> 
> Thats like being in a property boom and buying caravans???!!!




Tech,

I'm actually overweight materials and energy atm, it just happened that the charts I followed were resources stocks, found low risk entries and just went for it. I did target gold and oil stocks a few weeks ago again (missed a couple of very low risk entries, due to my inexperience) and I'm still following them and pyramiding onto others- but note only some oil and gold stocks are booming (eg TAP had a big fall, ORG is going sideways, SSX has only just recovered and BSL and CSM are just picking up again). The market rarely runs  on all cylinders, some sectors lag as the crowd moves away from it, so I'm balancing it out. There will be a move out of resources again. I might buy more on the dips. I've can only handle so many positions at once.

If I have to pick two similar charts and one is a resources stock and one is not I'll go the latter as I want some stability in my running balance/equity curve, can't cope with huge drawdowns. Psychologically I'd rather cope with a few stocks going down from time to time than all going down at once (big resources stocks seem to run and fall together, in general).

Interesting what you keep saying though about putting all the proverbial eggs in one basket, I need to think abit more about it. As a discretionary trader it's more of an issue for me as I don't have figures to rely on like systems traders. I assume you didn't even look at sectors when you took signals in TechTrader, just the trend and the numbers (no funnymentals apart form the initial universe).


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## tech/a

> I assume you didn't even look at sectors when you took signals in TechTrader, just the trend and the numbers (no funnymentals apart form the initial universe).




Yes I did.
Of all the stocks triggered both ZYL and KZL were selected--specifically.


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## markrmau

tech/a said:
			
		

> ZYL



I think you mean ZFX ! 

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=au:zyl&sid=0&o_symb=au:zyl&x=11&y=13


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## brerwallabi

A lot of effort and boy it was a hot day too and at the end of the day I have pulled up just in front excluding previously held stocks. I thought today was going to be one of those once a year type days where everything you buy goes up well maybe its tomorrow. I spent hours this morning picking shares all the signals were right and some of the damn things went down - maybe it was the profit takers. Might just be another day before we have that little correction.


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## happytrader

Maybe the "I don't want to miss out'  and the 'I should have' crowd will brave it and come out tommorrow. Strong emotion that one.

Cheers
Happytrader


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## tech/a

markrmau said:
			
		

> I think you mean ZFX !
> 
> http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=au:zyl&sid=0&o_symb=au:zyl&x=11&y=13




Ooops Good thing Im not a typist!

Back on the crash topic.
At the time a 40%/37% fall would ofcourse be a crash or prolonged bear market. But over time they are nothing more than corrections within the economy.In years to come any fall be it sharp or prolonged will be veiwed in the same way.
But having part of your invstments in Stocks and other parts elsewhere means you can grab the gains in various areas without over exposure.

There are ofcourse times where you should be heavy into areas which are going gang busters.Now is that time for rescources.

Rich yours is a judgement call and everyone will make similar calls at different times---some--maybe me a little late.Id rather give some back than watch it pass by.


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## Broadside

resources stocks are not overvalued in my opinion based on current commodity prices BUT it is quite possible the underlying commodities are in a bubble....there is a lot if underlying demand but when copper for example rises 5% in a night things are getting overheated I reckon.  I am well overweight in resource stocks, esp MGX but I am wary.


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## wavepicker

bullmarket said:
			
		

> Hi wavepicker
> 
> Yes I agree with you re being cautious atm but as I mentioned earlier I see our market (XJO) atm as basically about fair value (for the reasons I gave earlier) and if I had to put either a cheap or expensive bias on our market's value I would have to say imo the market's value is biased towards looking a little pricey overall.....bu that doesn't mean there isn't possibly a little more upside to come in the short term.
> 
> Re differentiating corrections from crashes, for me it's largely irrelevant as people will interpret the same given event on a chart differently......ie...whether someone uses a 10% or 15% benchmark doesn't really mean much to me.....and imo you would also have to specify a time frame for the drop to occur within for the drop to be defined as a crash or correction.
> 
> Obviously a 10-15% drop in say 12 months is not a crash (for me at least) but the same drop in say a few days or 1-2 weeks could be seen as a crash by some.....but at the end of the day I don't see what it matters as 10-15% drop is still the same no matter what you call it
> 
> cheers
> 
> bullmarket




Hello Bullmarket,

I beleive it is very difficult to define a "fair value" or perhaps another word for it is "equilibrium" in the market.  The market is never in equilibrium. prices are always passing through equilibrium to an extreme either up or down. One thing is for sure however, that is that prices will always revert back to the mean, that is why a major correction/crash  is innevitable.

I guess everyone who gets into the market knows that a major correction will happen. The question is when?  Anyone can enter the market and make $$ when prices are rising. Where 95% of participants fail is recognizing that the trend is at risk, and devising a strategy/methodology for exiting the market. Their strategy is to keep buying the pullbacks, but at some time sooner or later the pullback will keep pulling back and they will catch a sharp falling knife instead. Buy and hold which Australians love will not work then.

The market is booming now which is great, but optimism is very very high which is a thumbs down in my opinion. All you have to do is pick up and look in the financial pages of any major newspaper which seem to be getting more print space by the week, and also where bulls permeate the pages saying how easy it is to make money in the market and that more and more Australians are now participating in the the market at levels never seen before. This is not the sort the of sentiment seen in the middle of a bull market.


Good trading to all.


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## bullmarket

Hi wavepicker 

yes I fully agree with you re using some sort of long term 'equilibrium' indicator as another measure of where the market is at any point in time.

I use average PER's for indexes to get a ball park feel for the overall 'value' in share prices based on forcast EPS numbers for the companies in an index.

For any newbies not sure what is meant by equilibrium I've attached a quick and dirty commsec chart showing the weekly XJO (ASX200 index) and its 65 week exponential moving average (red line) and the 200 week moving average (black line). These 2 MA's could be used as long term equilibrium indicators. But you could use any other long term MA's, Bollinger bands, linear regression lines through the closing prices or whatever long term indicator suits.

I like to use long term MA's as prices/indexes will cross above and below them in bull and bear markets.  One downside of long term indicators is that it then takes longer for the market action to be confirmed by the indicator.

Eventually the XJO weekly will cross below both the 65 and 200 week MA's but when that will happen is anybodys' guess atm.

The point I was making earlier re not expecting a crash based on the current prospective XJO PER is that when XJO eventually turns back towards whatever long term equilibrium indicator you choose it will imo be a gradual retrace (obviously barring any global geo-political/economic shock) because with a current prospective PER at ~17-18 it suggests to me the market is fundamentally about fair value with a slight bias overall to looking pricey.

But if the market keeps rising to the point where the average PER for XJO is say 20+ then any retrace is more likely imo to be sharper and faster because at PER of 20+ there is a lot of profit growth built into share prices and if that growth becomes unlikely for whatever reason then sellers will generally move in quickly and sharply.

Anyway, more food for thought 

cheers

bullmarket


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## BSD

Will be funny to see how the technical/mechanical trader's 'tight' stop losses work on leveraged positions when the physical stocks gap 5-10% down one day. 

No stops getting matched, margin calls on stock falling in a straight line. The assumption of continuous pricing has crushed more than one 'smarty'.

Ever heard of the black swan theory?

No matter how much you 'test' your 'systems' - a one-in-a-thousand day will rip you apart if you are excessively leveraged. 

The market is so chock-full of highly leveraged punters at the moment, the eventual pull-back will be ugly. A couple of 100-200 point negative days perhaps. 

Forget the following the index performance, it is a sham. 

40% banks, 20% RIO and Hills - much of the industrial sector is already smoked. I love the resources, but we are very due for a pullback and many no-growth industrials are hitting PEs over 16. 

Anyone prepared for 50 bps of interest rate rises in Aust?

Mugs on ACA saying they cant afford their 95% leveraged home loan. 

I have not seen so much confidence in a market.

 I am not saying I am switching to cash - just pulling in my horns. More hedge funds, more floating yields, more diversification and less big positions.


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## wayneL

Now that's a bear!!!!

FWIW, a black swan event seems likely in the current climate.  There are plenty of them flying around, depends whether one of them decides to land.

I still think a death by thousand cuts scenario is more likely.


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## bullmarket

Hi BSD

yep generally agree it could get nasty when the correction comes but barring any global shocks as I mentioned before I still think that while our market PER is below 20 any retrace should be gradual overall.  

_Sure, initially there could be a sudden 100+ point drop initially, just like there was over those 2-3 days back in October when many were then calling the start of the inevitable correction._

I still think that at market PER at ~17-18 there shouldn't be too much devastation but if the the market PER gets to 20+ then yes I agree the severity of the gloom you painted is much more likely when the correction comes.

cheers

bullmarket


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## bullmarket

ooooops   

the chart I posted a few posts back is a daily and not weekly chart and so those are 65 and 200 day and not weekly averages....sorry for any confusion.

*Joe/Wayne - any chance of increasing the current 20 minute editing time to something a little longer like say at least an hour? * 

thanks bullmarket


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## tech/a

BSD



> Will be funny to see how the technical/mechanical trader's 'tight' stop losses work on leveraged positions when the physical stocks gap 5-10% down one day.




Just as funny as fundamental traders doing the same thing with no stops. 



> No stops getting matched, margin calls on stock falling in a straight line. The assumption of continuous pricing has crushed more than one 'smarty'.




Sure and some "Smarty's" have been in the same stock for years leveraged and have seen 400% rises.Even if the same smarty had a 100% fall in his stock in a single day before he took a sell (highly unlikely) he'd still be 200% +



> No matter how much you 'test' your 'systems' - a one-in-a-thousand day will rip you apart if you are excessively leveraged.




True no need to be a one in a thousand year event if excessively leveraged.
But the issue here is leverage not a crash.
Even the 87 crash went from -41% to -25% in 3 mths.



> 40% banks, 20% RIO and Hills - much of the industrial sector is already smoked. I love the resources, but we are very due for a pullback and many no-growth industrials are hitting PEs over 16.




True consituents and weighting are an issue.If we take the S&P200 the 2000/03 Bear market corrected 22% not 37% 



> Anyone prepared for 50 bps of interest rate rises in Aust?




Yes in property I'm set to 9.5% not that I think it will get there.(Gearing and return)

Some will get caught and some will give back even huge chunks but some will also still be grinning from ear to ear before,during, and after a possible crash.
You know not everyone are complete mugs!

The guy that bought 10 houses through 2000 and sold 4 to now hold 6 3 of which are freehold--is he a mug?
The guy that bought 100000 ZFX at $3.90 leveraged on margin and still holds is he a mug?---Or BHP or etc etc.

If a crash comes then take action.
Nothing wrong with being defensive just that its not that profitable.


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## BSD

A couple of points regarding *market* PEs

1. What does the market PE look like ex-BHP,RIO, Banks and Insurers?

- bloody expensive when you consider the expected EPS growth ex-resources is very low

Hence my point regarding the uselessness of our index in making many investment decisions

2. The higher the risk free rate - the lower the PE must become. 

With growth ex-resources getting low and GDP growth tracking around the 2-3% levels a 6% earnings yield (16times) on equities is not sufficient

You can never pick the bottom or the top - but the leverage factor at the moment is enormous. 

Wayne, I am not really a bear, just VERY conscious of the amazing level of risk being taken by very ****sure punters who are leverage to the gills and havent experienced a good shakeout for many years. 

Inflation number on Tuesday will be interesting. Massive price rises in commodities both hard and soft will soon come through the numbers and a 1% quarter of CPI will have the RBA moving rates up smartly. 

50 bps will have a massive effect on the overleveraged 'Strayan. 

Imagine consumer confidence if new home buyers from the last 18 months are in 'negative equity'.


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## Joe Blow

bullmarket said:
			
		

> the chart I posted a few posts back is a daily and not weekly chart and so those are 65 and 200 day and not weekly averages....sorry for any confusion.
> 
> *Joe/Wayne - any chance of increasing the current 20 minute editing time to something a little longer like say at least an hour? *




Bullmarket,

I'm probably going to keep the time limit as it is as it is my experience that it is rare that there is a need to change a post after 20 minutes. And for those times where a change is required I will gladly do it for you. Simply send me an email at joeblow@aussiestockforums.com with instructions and an updated chart (if required).


----------



## bullmarket

ok no problem Joe 

please ignore the PM I just sent you at the same time you must have posted your reply.

I'll sack my proof reader and put out an ad for a new one   

cheers

bullmarket


----------



## Porper

tech/a said:
			
		

> Its like having a LARGER Profit and succumbing to the temptation to take profit,only to see the stock move up another 400%.




I did this last week.I have been exceptionally bullish on Gold for months and sold everything the day before the big push over $600.No logical reason, just a temptation to put good profits in the bank.

Emotion is hard to conquer alright.

The market certainly is booming, not a good time to be out now.So why did I do it


----------



## BSD

Tech - I am not making personal slights and I apologise if you get that feeling. 

On your points:

1.
Fundamental traders will get hurt. But they wont own the real garbage (TOE, NIA, SHN etc) that will be completely shaken out, that many buy (and profit from now) on the basis of a pretty chart and another crazier mug paying more. 

2.
Many of the sharpest system traders get hurt by both non-continuous prices AND prices of seemingly diverse positions becoming highly correlated. 

3.
Believe me, if some of my best profitable trades go from being 500% up to only 100% up - it is going to hurt like a beeatch. See posts on EQN

4. 

After '87 the index may have only been down 25% a couple of months later - but it took years for the index to recover to previous high and many who were punting rubbish never recovered. Helix Resources anyone?

Most punters couldnt give a fig re the index

5.
I dont bregrudge anyone who spun the wheel on property and owns a few free ones. 

Let alone ZFX or BHP punters - I am one of them. Margin lending is a suitsble strategy for those with cashflow and a long term horizon. 

Aside from property punters, the interest rate effect has NOT been accounted for in many people's equity portfolios yet. 

You may have prepared for 9.5% rates, but a massive proportion of everyday consumers have not. 


Relax mate, I am not taking the p!ss out of you!


----------



## tech/a

> Relax mate, I am not taking the p!ss out of you!




Didnt think you were.
Had you been you'd have done a better job of it than that.


----------



## Smurf1976

A question for those who have the necessary software / data.

How broadly based is this present advance in the market? How many of the top, say, 300 stocks are actually at or near all time highs?

In other words, is the ASX in the midst of a broad advance or is the index simply being pushed higher by a few star performers?


----------



## TraderPro

You guys might like to read this column by Alan Kohler today...

http://www.smh.com.au/articles/2006/04/18/1145344086511.html?page=fullpage#contentSwap1


----------



## tech/a

Smurf1976 said:
			
		

> A question for those who have the necessary software / data.
> 
> How broadly based is this present advance in the market? How many of the top, say, 300 stocks are actually at or near all time highs?
> 
> In other words, is the ASX in the midst of a broad advance or is the index simply being pushed higher by a few star performers?




Smurf.

Percentages that have reached their all time high close at sometime over the last month.


ASX 100 38%
BT Margin list (Closest I have to ASX 300) 28.5%
Full ASX 24%


----------



## tech/a

TraderPro said:
			
		

> You guys might like to read this column by Alan Kohler today...
> 
> http://www.smh.com.au/articles/2006/04/18/1145344086511.html?page=fullpage#contentSwap1




Although it was meant as a warning it certainly didnt look all that negative to me.

More positive points,Even comes with his own disclaimer.

Great Blog


----------



## wayneL

Wow!

Gold just topped 645, Silver @ 14.67 Crude @ > 72

Bonds making new lows and 10 year notes not far from doing the same.

I'm happy to take the money but apart from no negative reaction in share prices, this all feels a bit funny. The traditional correlations are breaking down.

Tech

Check this book out if you want a nice gentle counter to the bull arguement:

http://www.amazon.com/gp/product/15...0232-9606441?_encoding=UTF8&v=glance&n=283155


----------



## tech/a

Wayne 
Ill buy and read the book.
I respect the writer as six sigma is a good read for those in business.
But from a quick read of the summary it doesnt seem rounded.
In that consumer debt isnt balanced with Glodalisation,Global economic growth,and its US based.We have rescources,and even now can be seen as independant at times from the US.

Still Ill have a read while hugging my Teddy Bear.


----------



## tech/a

On the other hand 16 pages of 
Economic Boom till 2020.

http://www.wired.com/wired/archive/5.07/longboom.html

Peter Schwartz and Peter Leyden are no economic slouches either.


----------



## bullmarket

Hi BSD



			
				BSD said:
			
		

> A couple of points regarding *market* PEs
> 
> 1. What does the market PE look like ex-BHP,RIO, Banks and Insurers?
> 
> - bloody expensive when you consider the expected EPS growth ex-resources is very low
> 
> Hence my point regarding the uselessness of our index in making many investment decisions
> 
> 2. The higher the risk free rate - the lower the PE must become.
> 
> With growth ex-resources getting low and GDP growth tracking around the 2-3% levels a 6% earnings yield (16times) on equities is not sufficient




I've updated my spreadsheet that calculates average market PERs (as per spreadsheet I uploaded about 4 weeks ago in the 'tradingstrategies/systems' forum) with today's prices from commsec.

*The weighted average (by mkt cap) PER for the ASX200 (XJO) has jumped from 16.6 four weeks ago to 17.5 now.*

I took out BHP, RIO, WBC, ANZ, CBA, NAB and QBE (I haven't removed any other insurers) as you suggested and the weighted average PER jumps to 18.8 on todays prices.  

MY PER's are based on Forcast 2006 EPS numbers from http://investor.ninemsn.com.au/investor/shares/finder/default.asp 

Either way, I think our market is looking at best around 'fair' value assuming a fair PER of ~17 with a bias to looking a little pricey.  I still don't see our market as grossly expensive overall as I mentioned earlier.

cheers

bullmarket


----------



## noirua

tech/a said:
			
		

> *I think its very normal for so much bear sentiment.*
> 
> Its like having a LARGER Profit and succumbing to the temptation to take profit,only to see the stock move up another 400%.
> 
> There is absolutely nothing I have seen that gives credible evidence to a pending crash.
> I see much which gives credence to a boom that will and can continue due to excessive demand.




I lost a lot of money, in paper terms, in the 1987 crash. It was different to the 1973-75  great bear market, when gold shares doubled in price, in 1987 they fell at an unbelievable speed - St Barbara Mining ( Endeavor Resources ), crashed from 90 cents to 22 cents in one week, they finished at 3 cents - so take care my friends.


----------



## Smurf1976

Thanks for the info Tech. I'll have to think some more about the significance but suffice to say I'm glad to hear that it's more than 5 or 10% of stocks that are driving the market up. I'd be worried if it were that narrowly based.

...

As a general rule I'm bullish about commodity prices and in particular oil. But realistically I think we're at some sort of turning point here. The pace of price rises for gold, silver and oil has accelerated dramatically and, well, if gold keeps rising at $20 a day... So I see two basic outcomes. Either (1) the central banks get serious about maintaining value in their currencies and we see an interim top in gold (and possibly silver and oil although they do have physical considerations adding price pressure). Alternatively, (2) we are about to see the bears' long awaited gold boom and fiat currency collapse (or at least serious loss of value versus commodities).

Realistically and in view of the overall pattern of the gold / silver / oil bull to date, I think option 1 is more likely. I just don't think the bull has gone far enough to come to that end point at this time (if it ever happens). So I think Central banks will act to reign in inflation expectations - another way of saying that the interest rate rises aren't finished yet. If they go far enough then my guess is that gold / silver / oil are where stocks were at this time in 1987 or where gold was just before it's slump in the mid-1970's. The bull isn't over but a decent correction is in store IMO. Question is when.

All just my opinion of course so do your own research before making any decisions. Note that I'm commenting on the price of the physical commodities expressed in US Dollars and not AUD prices or mining stock prices.


----------



## BSD

bullmarket said:
			
		

> I took out BHP, RIO, WBC, ANZ, CBA, NAB and QBE (I haven't removed any other insurers) as you suggested and the weighted average PER jumps to 18.8 on todays prices.
> 
> Either way, I think our market is looking at best around 'fair' value assuming a fair PER of ~17 with a bias to looking a little pricey.  I still don't see our market as grossly expensive overall as I mentioned earlier.
> 
> cheers
> 
> bullmarket




Good Evening bullmarket. 

Not in violent disagreement and thanks for your attention to detail.  

 But if the risk free rate becomes 6%, an equities market with a PE at above 16 times needs good growth prospects to be a worthy play. 

Setting aside the resource sector - where is the growth coming from?

It isnt from the domestic economy that is for sure.

I remember in 2002 trying to get clients to buy stocks with PEs of 12 and EPS growth of 20%pa. 

How  a bullmarket changes the mindset. We switch from absolute to relative value. 

18 times is bloody expensive in my opinion.


----------



## wayneL

BSD said:
			
		

> Setting aside the resource sector - where is the growth coming from?
> 
> It isnt from the domestic economy that is for sure.
> 
> I remember in 2002 trying to get clients to buy stocks with PEs of 12 and EPS growth of 20%pa.
> 
> How  a bullmarket changes the mindset. We switch from absolute to relative value.
> 
> 18 times is bloody expensive in my opinion.




agree


----------



## wayneL

Silver down more than 11%

Gold down >$25

We might get our crash after all (just {half} joking  )


----------



## tech/a

wayneL said:
			
		

> Silver down more than 11%
> 
> Gold down >$25
> 
> We might get our crash after all (just {half} joking  )





Ahhhh

Buying opportunities!!


----------



## wayneL

tech/a said:
			
		

> Ahhhh
> 
> Buying opportunities!!




Not Yet!

Let's shake out the weak hands!

Let's let it run down a bit more, then, yes.


----------



## wayneL

Silver actually went limit down (explained in the article)

http://yahoo.reuters.com/news/artic...TFH05232_2006-04-20_17-45-43_N20489079&rpc=44

As it stands now:

June Gold 616.8 -3.05%
May Silver 11.935* -17.67%!!!!!!!!*

May Unleaded Gasoline down 6% BTW as well

Well we got a crash in something!!!


----------



## nizar

wayneL said:
			
		

> Silver actually went limit down (explained in the article)
> 
> http://yahoo.reuters.com/news/artic...TFH05232_2006-04-20_17-45-43_N20489079&rpc=44
> 
> As it stands now:
> 
> June Gold 616.8 -3.05%
> May Silver 11.935* -17.67%!!!!!!!!*
> 
> May Unleaded Gasoline down 6% BTW as well
> 
> Well we got a crash in something!!!




Yeh this morning gold at 612, where we were april 18th (US time) so not a major correction, but it still may go down more...

JUst like in december when gold went from 540 to 495 and then recently from 575 to 540...

All bull runs have corrections, they provide buying opportunities and chances to top up before the next leg up...


----------



## markrmau

Looking a bit sik   

Do you think the limit down halt really achieved anything? Seems the market continued it's trend down anyway.


----------



## bullmarket

Hi BSD



			
				BSD said:
			
		

> Good Evening bullmarket.
> 
> Not in violent disagreement and thanks for your attention to detail.
> 
> But if the risk free rate becomes 6%, an equities market with a PE at above 16 times needs good growth prospects to be a worthy play.
> 
> Setting aside the resource sector - where is the growth coming from?
> 
> It isnt from the domestic economy that is for sure.
> 
> I remember in 2002 trying to get clients to buy stocks with PEs of 12 and EPS growth of 20%pa.
> 
> How  a bullmarket changes the mindset. We switch from absolute to relative value.
> 
> 18 times is bloody expensive in my opinion.




no problem  - I think we are essentially in agreement.

Where we mainly differ is in the relative overall 'expensiveness' (if there's such a word   ) of the market atm and hence the likely severity of any correction when it occurs.

cheers

bullmarket


----------



## wayneL

US markets have had a shocking week with two big downs days.... us bears are salivating. The matador has sharpened his sword and the picadors have landed some spears in the bulls shoulder.

Meanwhile we've got the bond market by the throat... significant new lows today.

We live in interesting times.

Cheers

PS the t-bones are already on the barbie in the middle east.


----------



## tech/a

Gotta say Im pretty impressed with some of the calls from the Elliot Boys.

Radge Called a 5300 top months ago.
Seen a few others mention it.
Yogi the wonder trader mentioned something about time as well.
 The analysis at this point looks pretty good.


----------



## markrmau

spx trend doesn't look too bad in us$ terms.

Wouldn't like to see the chart compared to the DX currency basket though!


----------



## tech/a

A look at the DJIA


----------



## astroboydivx

tech/a said:
			
		

> On the other hand 16 pages of
> Economic Boom till 2020.
> 
> http://www.wired.com/wired/archive/5.07/longboom.html
> 
> Peter Schwartz and Peter Leyden are no economic slouches either.




I got up to page 3 before realising that article was from 1997!


----------



## tech/a

Hmmm Support/Resistance line at 11335

Todays low was 11333


----------



## websman

Interesting... It may be time to find some short setups.


----------



## ctp6360

tech/a I think we might have been right about yesterday being a golden buying opportunity!


----------



## professor_frink

ctp6360 said:
			
		

> tech/a I think we might have been right about yesterday being a golden buying opportunity!




futures were down about 50 points overnight. may be more selling to come.


----------



## Sean K

6-8% is technically a 'correction'. How much more is that to go? 4-6% I think.


----------



## tech/a

ctp6360

Hmm dont know about "golden"
I actually favor Web's outlook at this time.
Most corrections are in 3 waves or 5

The Elliot callers are saying 4800 for the wave 4 correction then followed by the last wave 5 which will take out the current high.

(I'm talking of the XAO not the DJIA).


----------



## bullmarket

I use the weekly XJO chart and so over the next few weeks I'll be watching to see if the ~5150 support in early April06 is retested.  If it is and fails to hold then the next level of support I'd be looking at is the Jan/Feb06 trading range of 4800-5000. 

Good to see the more defensive LPT sector (XPJ) is holding up well 

And remember, we have been in a roaring bull market since March 2003 

cheers

bullmarket


----------



## wayneL

US futures are in tankage mode prior to the open of the stock market.

... inflation , and therefore rising interest rates are the fear apparently  

A Bears delight


----------



## noirua

BHP fell 4.62%; Xstrata 5.28%; Anglo American 5.6%; Rio Tinto 5.8%; and Royal Dutch Shell 4.10% as the FTSE 100 fell and the NYSE continued down at the LSE close.


----------



## wayneL

@ stock market close:

Dow  *-207 points*

S&P500 *- 22 points*

SPI on SYCOM dipped its toe under 5100 ... *-99 points* ATM

June Gold @~686

Jun Crude < 69

:fan


----------



## wayneL

@ *futures* close:

Dow  *-234 points*

S&P500 *- 25.25 points*

SPI on SYCOM dipped its toe under 5100 ... *-105points* ATM

June Silver < $13

:fan


----------



## tech/a

Business today will not be profitable.
Business this week wont be either.
Generally business has been spectacularly profitable.

Perspective.


----------



## mit

ohh the pain, the pain  of it all    

Although I agree with tech, even if I am stopped out to cash today and over the next couple of days, it's been a very good year. 


but for today

ohh the pain the pain.

Michael


----------



## wayneL

Well what looked like being an inside day on the US exchanges turned into a late slide.

The bulls have been religiously buying dips before this weeks tankage and I was half expecting themto turn up late in the session. But instead we had another little bear party. 

I'm delta neutral at the moment so it doesn't worry me which way it goes, but boy is it looking sick  

Cheers


----------



## Mumbank

Mmmm its Friday and the news is not looking good.  I think I'll jut ignore it all, get some work done and take my son to lunch at the pub, finish early its almost the weekend.

Lets hope it all gets better next week.  Some positives would be good.


----------



## mit

Mumbank said:
			
		

> Mmmm its Friday and the news is not looking good.  I think I'll jut ignore it all, get some work done and take my son to lunch at the pub, finish early its almost the weekend.
> 
> Lets hope it all gets better next week.  Some positives would be good.




I think today will be a flat day rather than another drop

MIT


----------



## tech/a

The quick drop before close in the US has me thinking there is more downside to come.
Was there some late news?/figures?

4800 on the Aussie market is the tipped corrective value.


----------



## noirua

http://www.aireview.com.au/index.php?act=view&catid=8&id=3898&setSub=1

http://www.hargreaveslansdown.co.uk/news/expert_views/index.asp?code=2312


----------



## IGO4IT

Interesting read on gold stocks & how gold could go! Analysts say we could be as far as few days from an upwards reverse.

http://www.gold-eagle.com/editorials_05/hommelberg052006.html

cheers,


----------



## wayneL

Folks,

The SPI just ticked under 5000.

US futures are off 1/2 - 3/4% WELL before the open.

I don't follow the European indices, but they must be bathed in red, for the above to be occurring.

Ohh.... and June Gold is < $640

Looks like the bears have the bulls in a wristlock.


----------



## noirua

Mining stocks continue down on the LSE on Monday, between 2% and 6%. The decline is due to worry over metal prices and forecasts of further falls on the NYSE later. Gold fell to US$643.80 and other metals declined with it.


----------



## IGO4IT

noirua said:
			
		

> Mining stocks continue down on the LSE on Monday, between 2% and 6%. The decline is due to worry over metal prices and forecasts of further falls on the NYSE later. Gold fell to US$643.80 and other metals declined with it.




A HOT battle happening now in GOLD sales & it looks like bulls are having an attempt to gain control. (currently $645)

Gold was at $646 at ASX close today, if by tomorrow morning we're not at least $660 then we're having another misery on resources stocks to continue the misery we had today.


----------



## noirua

IGO4IT said:
			
		

> A HOT battle happening now in GOLD sales & it looks like bulls are having an attempt to gain control. (currently $645)
> 
> Gold was at $646 at ASX close today, if by tomorrow morning we're not at least $660 then we're having another misery on resources stocks to continue the misery we had today.




http://news.ft.com/cms/s/5de51fd0-e97a-11da-a33b-0000779e2340.html


----------



## nizar

tech/a said:
			
		

> 4800 on the Aussie market is the tipped corrective value.




Agree 4800-4900 is what i was thinking


----------



## tech/a

One last exhaustive move in it I feel.

The DJIA recovered from over 100 pts down to 18 pts down.
Showing some recovery.

Wayne and the Bears have been stampeding.
Bloody costly exercise--

Wonder how many of the predictive guys have shorted Commodities and indexes? From the get go.

Havent seen any posted live to follow.

Radges Elliot number of 5300 is pretty good now under 5000--- thats a good drink--


----------



## GreatPig

tech/a said:
			
		

> Radges Elliot number of 5300 is pretty good now under 5000--- thats a good drink



Especially if he still has that index short on.

GP


----------



## professor_frink

markets are similar to 87 crash reports sunday times


http://www.timesonline.co.uk/article/0,,2095-2189601,00.html



> A report by Barclays Capital says the run-up to the 1987 crash was characterised by a widening US current-account deficit, weak dollar, fears of rising inflation, a fading boom in American house prices, and the appointment of a new chairman of the Federal Reserve Board.






> Apart from the similarities in economic conditions, during the run-up to the 1987 crash there was a sharp rise in share prices worldwide and weakness in bond markets


----------



## noirua

" Sit tight and don't lose your mettle "

http://www.theaustralian.news.com.au/story/0,20867,19224297-643,00.html

London is up 2.30% ( FTSE 100 ) after 6 hours trading, gold at US$661.70. Xstrata up 8%, Anglo American up 6.5%, Merrill Lynch World Mining IT up 6.5%, Lonmin up 10%.


----------



## mit

US Market unfortunately took a dive just before the bell.

MIT


----------



## mit

professor_frink said:
			
		

> markets are similar to 87 crash reports sunday times
> 
> 
> http://www.timesonline.co.uk/article/0,,2095-2189601,00.html




The Aussie market has had a steep rise in price but the US Market has been largely flat for 5 years. Also what made the fall worse is in 1987 was the huge amount of portfolio insurance (with premiums based on Efficient Market theory  :swear: so way under priced) sold. These insurance companies panic sold their hedges and many went broke (Note that the correction was very short though deep and the DOW continued upward after this)

This is what annoys me about pundantry take 3 parallels between now and something in the past and write a story about history repeating itself.


----------



## IGO4IT

Gold is up ($665) & even that DOW closed 0.24% lower in last few minutes but traded higher whole session!! which is a sign of confidence. 

closing dive is expected at least for a week as no one trusts having their money in overnight!!! imo, we should also get the before the close dive in XJO as many will take less but leave before close as they're scared of another dive. 

cheers,


----------



## Broadside

there is a major tug of war at the moment in the US between bulls and bears: that slide near the close last night is not a good sign, the bulls are losing their grip despite strong rises in Europe.  If those inflation figures on Friday are bad it could be a turning point in the markets.  I think the risk is definitely on the downside.  There is so much volatility and hot money around the place it exacerbates the uncertainty.  Copper up 12% last night.  Gold down 10% the night before.  Not good at all.


----------



## Fab

Going nicely back up at the moment. I was not aware of inflation figure being released on friday but if that is the case I agree that will boost or burst this new uptrend


----------



## IGO4IT

even after a poor performance during the day today, Gold is higher tonight $2 to $668. Metals are all up again & I think atmosphere is getting ready for another nervous trading in the DOW tonight.

the dive of the DOW before close was defenitely "uncertainty" & worry that tomorrow may hold new surprises. we all have to wake up to the fact that the commodoties market now is very paranoid, everyone is ONLY willing to trust the "the last few hours trend" but defenitely over-night risk is too much to handle NOW! Perfectionists of catching the trend form line to line may now compromise for whatever profit they could get their hands on as long as their money is safe & in their hands before they go to sleep.

XJO done same thing today, everyone logically knew that we're recovering or at least in the way but no one could trust leaving their money over night. Proof: both DOW & ASX200 traded higher the whole day but closed lower in last 1-2 hours! it could be bears covering their sales during the drop party in the last 5 days or it could be that everyone realised that ..."hey...we could be really over-reacting here" 

it will be intresting to watch the DOW close today & Friday before weekend! I have no doubt that it will be stable tonight but I don't know if anyone will trust leaving their money in for another day. Gold price at close will be the judge!

cheers,


----------



## chromatic

SPI is -16 now, FTSE is well down and BHP and RIO are -2% and -1% in London, respectively. S&P 500 look pretty shakey too. Base metals are well down and copper has given up most of the overnight gains it made yesterday. I think the carnage isn't quite over yet and I wouldn't want to be long tonight.


----------



## wayneL

The gold and oil rebound could be in trouble too...both breaking intraday support.

Doesn't look good for the dip buyers.


----------



## IGO4IT

I find the realtionship between DOW & FTSE is very strange in last 2 days, it could be gold/metals prices at close of both but it seems to me that both FTSE & DOW are taking turns in closing in opposite direction, which somehow doesn't make sense unless both are becoming that sensitive to metals pricing that intraday trading is becoming the fact & longing is no longer an option!!

Am I imagining things?


----------



## brerwallabi

We may see a bit more downside as those in the US may pull some profit (those who haven't) over the next few days before their long weekend fearing a drop below 11000, remember US markets closed on Monday and Tuesday they release consumer onfidence data, an interesting few days ahead.


----------



## wayneL

http://business.timesonline.co.uk/article/0,,9063-2196025,00.html



> Share guru says slide could go on for months
> By Patrick Hosking and Gary Duncan
> BRITAIN’S most successful stockpicker yesterday told investors to brace themselves for months of falling share prices.
> 
> Anthony Bolton, who runs £6.5 billion of funds for Fidelity International, suggested that the jitters of the past two weeks could turn into a more prolonged bear phase as shares plunged again.
> 
> *
> Click here to find out more!
> In a rare public appearance, Mr Bolton said: “I think it could be the end of the bull market. The correction could be months, not days.”
> 
> His comments came as markets on both sides of the Channel suffered another battering that reversed much of Tuesday’s rebound. The FTSE 100 index lost a struggle to cling to its 2005 closing value and finished down 91.6 points, or 1.6 per cent, at 5,587.1.
> 
> In a sign of market nervousness, two initial public offerings were postponed yesterday: CMC Markets, which provides spread-betting and foreign exchange services, and Sigma Capital Investments, the Black Sea property group. Both said they planned to wait until the markets calmed.
> 
> Mr Bolton pointed to the steep rise in share prices over the past three years and the increasing difficulty in finding value in stocks, adding: “The bull market is old.”
> 
> However, a sharp slide could prevent a more protracted downturn, he said: “The faster it goes down, the shorter the consolidation phase is likely to be.” In March Mr Bolton is understood to have taken out a vast insurance policy against falling share prices, buying put options that give him the right to sell about £1.6 billion of blue-chip stocks at pre-slide prices.
> 
> The options, which expire next month, were bought on behalf of Fidelity’s flagship Special Situations fund and an investment trust, Fidelity Special Values.
> 
> After his speech to the Securities and Investment Institute, Mr Bolton said that a number of factors could lead to a protracted bear phase, including inflation fears, bird flu and the fizzling out of US consumption.
> 
> He also pointed to the warning from the US billionaire Warren Buffett of the dangers of a blow-up in the credit derivatives market. “When money is virtually free, that’s when people do silly things,” he told The Times.
> 
> Hopes that Tuesday’s bounceback in leading markets could end investors’ rush for the exits were dashed by another bout of heavy selling in Europe. In London, the FTSE’s losses were deepened by a continued retreat in shares in mining companies as key commodity prices tumbled again. Copper prices fell by as much as 7 per cent, with gold and silver also dropping sharply. In Paris, the CAC 40 dropped 1.3 per cent, while Germany’s DAX closed down 1.6 per cent. On Wall Street, shares slid into negative territory but then recovered.


----------



## tech/a

In the short term there are factors which are certainly going to pull the market into correction.

Barring Bird Flu epidemic or War.
In the longer term demand will outstrip supply and the bull will continue to run.

Time to move out of my short term positions and watch


----------



## professor_frink

looks like we might get a bit of a bounce today, which will give the jan high a bit more validity as a support area. I'm curious as to how long it will hold for.


----------



## Sean K

Wouldn't the Jan/Feb lows around 4800ish be the support area. 

I'm a jube at tech analysis so any explanation on that would be great.


----------



## professor_frink

that could be the next stop if we go lower than current levels. The green line on the chart I just posted is the trendline starting from the may05/oct05 levels, which is also in the 4800ish area at the moment, so we could find some fairly strong support in that area.


----------



## chromatic

Looks like strong resistance around 5040 on XJO and SPI. S&P futures are marginally lower and lots of data coming out tonight so perhaps the cat is just having another bounce?


----------



## powerkoala

I hate dead cat who keep bouncing....
better cat that climbs the highest tree


----------



## noirua

http://biz.yahoo.com/ap/060530/asian_markets.html? y=4


----------



## noirua

http://biz.yahoo.com/ap/060530/wall_street_futures.html?.v=2


----------



## wayneL

noirua said:
			
		

> http://biz.yahoo.com/ap/060530/asian_markets.html? y=4




We're having a nice little bear party on the US indexes too.


----------



## powerkoala

when we will have a good bull ?
gold up, oil up, yet basemetals down again
europe down and dow going south again...
what a pity ...


----------



## noirua

wayneL said:
			
		

> We're having a nice little bear party on the US indexes too.




Hope this very long link makes it, one error and it's doomed:  http://personalfinance.iii.co.uk/ar...0005&link=tips0005_Sellwelleverything_259_100


----------



## nizar

professor_frink said:
			
		

> markets are similar to 87 crash reports sunday times
> 
> 
> http://www.timesonline.co.uk/article/0,,2095-2189601,00.html




Ahead of the Curve

86-ing the '87 Theory


By Donald Luskin   Published: May 26, 2006 


THE S&P 500 HAS lost 3.9% since the high achieved on May 5. And already the bears who have gotten it wrong ever since the bottom in October 2002 have proclaimed "I told you so." 

That's right. A measly 3.9% drop ”” following a 70.6% gain from the 2002 bottom. Couldn't it just be an orderly correction? No! The bears are calling it the precursor of a global recession and some are even warning that it will lead to a stock market crash like the one in 1987. 

The bears claim that all the conditions are right for a crash. Rising interest rates. Rising inflation. Falling dollar. Rising trade deficit. Brand new Federal Reserve chairman. All these things, they say, are just the same today as they were in 1987, before the biggest stock-market crash of all time. The bears are saying it's a case of "ominous parallels." 

I'll admit that there are some similarities between now and 1987. But the bears aren't telling you about the differences ”” and in this case, the differences make all the difference. 

For those of you too young to know about 1987 (or too old to remember), let me tell you the most important thing about it. On Monday, Oct. 19, the S&P 500 fell a stomach-curdling 20.5% in a single, horrific day. 

That's one for the history books, to be sure. But the history books tend to ignore the environment in which the crash occurred. The crash was a reaction to a sudden and unjustified speculative run-up in stock prices. You can't understand the crash unless you understand the run-up that preceded it. 

In 1986, the forward earnings consensus for the S&P 500 fell by 3.5% ”” yet the S&P 500 itself grew 14.6%. 

By Aug. 25, 1987, the high-water mark of that year, S&P 500 forward earnings had picked up strongly, rising 12.5% year-to-date. But stocks returned an astonishing 39% over the same period of less than eight months. 

Stocks got way out ahead of fundamentals. Compare that with today. 

Remember how I started out saying that the S&P 500 had gained 70.6% from the October 2002 bottom? It's taken 42 months to do that ”” and over that period, forward earnings have grown by 62.5%. In this bull market, stocks have grown pretty proportionately to earnings. 

In other words, stocks in 1987 were riding for a fall because they weren't supported by earnings growth. Today, stocks are on firm footing. 

Another big difference between 1987 and today is the bond market, which has an important impact on stock valuations. Stocks and bonds have to compete for investors' dollars. So when bond yields rise, all else equal, stocks become less valuable because their earnings and dividends become relatively unattractive. 

In 1987, bond yields soared. By the day of the crash in October, yields had risen 300 basis points year-to-date. Considering that stocks had risen more than three times as much as forward earnings, this move in interest rates left stocks very nearly as overvalued as they were at the very top of the "bubble" market in 1999 and 2000. 

Yes, bond yields have risen this year, too. And that's the cornerstone of the bear case that we're heading for a crash. 

But put away your crash helmet. Yields have only risen about 100 basis points from the lows of last year. And even at that, the 10-year Treasury yield is still a low 5%, compared with more than 10% the day of the crash in 1987. 

With bond yields as low as they still are today, and earnings having grown so much, stocks now are quite undervalued by historical norms. Barring some unforeseen catastrophe like a massive terrorist attack, a stock-market crash from these levels is simply not possible. I'm still bullish, friends. 

What about all the other "ominous parallels"? Frankly, I don't see what all the fuss is about. Other than the stock-market crash, whatever else was going on in 1987 must not have been that bad, because economic growth that year ”” and for the two years following ”” was very strong. 

Annualized quarterly real gross domestic product growth in 1987 averaged 4.5%. The market crash in the fourth quarter seems to have had even less impact on subsequent economic performance than Hurricanes Katrina and Rita have had recently. Quarterly annualized growth in 1988 averaged 3.7%. Over the nine quarters following 1987, growth averaged a respectable 3.3%. 

If a crash is out of the question, and if we can look forward to that kind of growth, then my question for the bears is this: Wouldn't it be a good thing if today really was like 1987? 

http://www.smartmoney.com/aheadofthecurve/index.cfm?story=20060526


----------



## wayneL

nizar said:
			
		

> Ahead of the Curve
> 
> 86-ing the '87 Theory
> 
> 
> By Donald Luskin   Published: May 26, 2006
> 
> 
> THE S&P 500 HAS lost 3.9% since the high...




I agree with the article that a '87 style crash is not on the cards. The mechanisms for that sort of panic are just not in place. 

However the mechanisms for recession/depression definately are in place. I'm thinking more along the lines of a '70's style bear.

When? Wouldn't have a clue. The printing presses are running full bore in a desperate attempt to stave it off. Ultimately, such attempts are futile. It would have been better to let it go after 9/11 like it wanted to. Much healthier in the long term.


----------



## Nick Radge

There are now 22 seperate countires who's market is current > 10% off their highs. The largest of which is Dubai which has fallen 64%, but 6 of which are strong western countries. 9 of these are off > 20%. Every time the US lifts interest rates to 6% the market drops and has done so without failure. Rates hit 6% earlier this month. Also consider that the Hedge Funds and large speculators now have the largest long position in S&P futures and the hedgers have the largest short positions. Take a read at www.bullishreview.com


----------



## nizar

Nick Radge said:
			
		

> Every time the US lifts interest rates to 6% the market drops and has done so without failure. Rates hit 6% earlier this month.




The US is still some way off 6%
It rose its rates earlier this month to 4.75% and another possibly on the cards for June and then maybe stop?

What do u mean by the market drops?
YOu mean it begins the start of a bear market?


----------



## Nick Radge

Apologies. The Discount Rate hit 6% on May 10.

There is a correlation between the 6% level and downturns in the US indices. I will find the reference for you and post.


----------



## michael_selway

nizar said:
			
		

> Ahead of the Curve
> 
> 86-ing the '87 Theory
> 
> 
> By Donald Luskin   Published: May 26, 2006
> 
> 
> THE S&P 500 HAS lost 3.9% since the high achieved on May 5. And already the bears who have gotten it wrong ever since the bottom in October 2002 have proclaimed "I told you so."
> 
> That's right. A measly 3.9% drop ”” following a 70.6% gain from the 2002 bottom. Couldn't it just be an orderly correction? No! The bears are calling it the precursor of a global recession and some are even warning that it will lead to a stock market crash like the one in 1987.
> 
> The bears claim that all the conditions are right for a crash. Rising interest rates. Rising inflation. Falling dollar. Rising trade deficit. Brand new Federal Reserve chairman. All these things, they say, are just the same today as they were in 1987, before the biggest stock-market crash of all time. The bears are saying it's a case of "ominous parallels."
> 
> I'll admit that there are some similarities between now and 1987. But the bears aren't telling you about the differences ”” and in this case, the differences make all the difference.
> 
> For those of you too young to know about 1987 (or too old to remember), let me tell you the most important thing about it. On Monday, Oct. 19, the S&P 500 fell a stomach-curdling 20.5% in a single, horrific day.
> 
> That's one for the history books, to be sure. But the history books tend to ignore the environment in which the crash occurred. The crash was a reaction to a sudden and unjustified speculative run-up in stock prices. You can't understand the crash unless you understand the run-up that preceded it.
> 
> In 1986, the forward earnings consensus for the S&P 500 fell by 3.5% ”” yet the S&P 500 itself grew 14.6%.
> 
> By Aug. 25, 1987, the high-water mark of that year, S&P 500 forward earnings had picked up strongly, rising 12.5% year-to-date. But stocks returned an astonishing 39% over the same period of less than eight months.
> 
> Stocks got way out ahead of fundamentals. Compare that with today.
> 
> Remember how I started out saying that the S&P 500 had gained 70.6% from the October 2002 bottom? It's taken 42 months to do that ”” and over that period, forward earnings have grown by 62.5%. In this bull market, stocks have grown pretty proportionately to earnings.
> 
> In other words, stocks in 1987 were riding for a fall because they weren't supported by earnings growth. Today, stocks are on firm footing.
> 
> Another big difference between 1987 and today is the bond market, which has an important impact on stock valuations. Stocks and bonds have to compete for investors' dollars. So when bond yields rise, all else equal, stocks become less valuable because their earnings and dividends become relatively unattractive.
> 
> In 1987, bond yields soared. By the day of the crash in October, yields had risen 300 basis points year-to-date. Considering that stocks had risen more than three times as much as forward earnings, this move in interest rates left stocks very nearly as overvalued as they were at the very top of the "bubble" market in 1999 and 2000.
> 
> Yes, bond yields have risen this year, too. And that's the cornerstone of the bear case that we're heading for a crash.
> 
> But put away your crash helmet. Yields have only risen about 100 basis points from the lows of last year. And even at that, the 10-year Treasury yield is still a low 5%, compared with more than 10% the day of the crash in 1987.
> 
> With bond yields as low as they still are today, and earnings having grown so much, stocks now are quite undervalued by historical norms. Barring some unforeseen catastrophe like a massive terrorist attack, a stock-market crash from these levels is simply not possible. I'm still bullish, friends.
> 
> What about all the other "ominous parallels"? Frankly, I don't see what all the fuss is about. Other than the stock-market crash, whatever else was going on in 1987 must not have been that bad, because economic growth that year ”” and for the two years following ”” was very strong.
> 
> Annualized quarterly real gross domestic product growth in 1987 averaged 4.5%. The market crash in the fourth quarter seems to have had even less impact on subsequent economic performance than Hurricanes Katrina and Rita have had recently. Quarterly annualized growth in 1988 averaged 3.7%. Over the nine quarters following 1987, growth averaged a respectable 3.3%.
> 
> If a crash is out of the question, and if we can look forward to that kind of growth, then my question for the bears is this: Wouldn't it be a good thing if today really was like 1987?
> 
> http://www.smartmoney.com/aheadofthecurve/index.cfm?story=20060526




2007 or 2008 latest (after Beijing Olympics) thats when the crash will occur, All Ords Terminal Value 6000+, will drop to 4000+ over a few months. DOW Terminal Value 12000+ drop to 10000+ over a few months. Commodity prices will also crash, especially metals. Oil and Uranium may fall but not crash

Then a very slow rise to stable from there for a 1-2 yrs at least

thx

MS


----------



## wayneL

nizar said:
			
		

> The US is still some way off 6%
> It rose its rates earlier this month to 4.75% and another possibly on the cards for June and then maybe stop?
> 
> What do u mean by the market drops?
> YOu mean it begins the start of a bear market?




Nizar

The base rate and the discount rate are different,

See this fed press releases of May 10 http://www.federalreserve.gov/boarddocs/press/monetary/2006/20060510/default.htm

Last paragraph

Cheers


----------



## Ageo

michael_selway said:
			
		

> 2007 or 2008 latest (after Beijing Olympics) thats when the crash will occur, All Ords Terminal Value 6000+, will drop to 4000+ over a few months. DOW Terminal Value 12000+ drop to 10000+ over a few months. Commodity prices will also crash, especially metals. Oil and Uranium may fall but not crash
> 
> Then a very slow rise to stable from there for a 1-2 yrs at least
> 
> thx
> 
> MS






Did Jesus tell you that?


----------



## Sean K

It was in todays stars for Taurus in the Fin, Ageo.


----------



## Ageo

kennas said:
			
		

> It was in todays stars for Taurus in the Fin, Ageo.




oh how did i miss it!
 



 That explains it thow as im a skorpio


----------



## bullmarket

Ageo said:
			
		

> oh how did i miss it!
> 
> 
> 
> 
> That explains it thow as im a skorpio




I've consulted my tea-leaves and crystal ball and they again don't agree   so I went and asked my gut    and it says that XJO will probably settle somewhere in the 4800-5000 range in the forseeable future, which is what my gut posted a few weeks ago.

cheers

bullmarket


----------



## wayneL

Well my screen is telling me the SPI is < 5000 again... 4984 to be precise.

...round and round and round she goes, where she stops, nobody knows!


----------



## Knobby22

bullmarket said:
			
		

> I've consulted my tea-leaves and crystal ball and they again don't agree   so I went and asked my gut    and it says that XJO will probably settle somewhere in the 4800-5000 range in the forseeable future, which is what my gut posted a few weeks ago.
> 
> cheers
> 
> bullmarket




Love to see your gut typing  

Seriously, I am getting more bearish every day. The status quo seldom remains and the world stockmarkets feel fragile and will not handle well a nasty shock from somewhere be it oil, bird virus, inflation, Iran moving into Iraq, Bush resigning, who knows?


----------



## nizar

IMO... data to be released later this week will be key to the FED making their decision to lift rates or keep them the same, and it will be key to figuring out if this correction has come to an end or not... if the data comes out good ie. indicating that the FED may not lift rates (eg. economy is slowing), and DOW/s&p500 reaction is good, than possibly correction for us is over, as dollar would decline and gold up also...   

but if the other way around, then this correction still has a while to go...


----------



## Ageo

nizar said:
			
		

> IMO... data to be released later this week will be key to the FED making their decision to lift rates or keep them the same, and it will be key to figuring out if this correction has come to an end or not... if the data comes out good ie. indicating that the FED may not lift rates (eg. economy is slowing), and DOW/s&p500 reaction is good, than possibly correction for us is over, as dollar would decline and gold up also...
> 
> but if the other way around, then this correction still has a while to go...





I hope this correction continues as this hasnt brought prices down enough.   

1 more month will be nice and then let the bulls take over


----------



## wayneL

Ageo said:
			
		

> I hope this correction continues as this hasnt brought prices down enough.




I agree!

Lets take it down to 3300 for some real value


----------



## michael_selway

Ageo said:
			
		

> Did Jesus tell you that?




I wish though, but just my gut

http://www.depression2007.com

if u read that, u can see theres soem thruth to what he is saying

thx

MS


----------



## Sean K

There may be some interesting ideas in depression2007, but I'm not sure about 'truth'.   It may be _his _ truth, but truth is soley the perception of the perceiver. Perception is reality, which then supports his idea about believing what you hear and being _conditioned_. So, in fact, if _his_ argument is true, he is only stating _his_ perception of _his _ reality, not the actual truth. 

His statement about the period 84-87 being a massive growth period when the US became a debting nation actually supports the present concern about the US economy. Wasn't there a crash in 87? Although, the reasons for the crash are unclear to me. Perhaps it was just perception that caused it. Or automatic stop losses...

Fundamentals play _no_ part in the financial markets? What the?   While market psychology is an factor, I think PE ratios, amongst other tangible things, have some part to play as well. Some listed companies actually make money and when they don't they go bankrupt, are suspended, and are no longer businesses.    

No taxes? What?   How do we pay for the Queen to visit every 20 years and wave to us? He lost me there. That's reality! 

But that's just my perception of his article.


----------



## professor_frink

my perception of that article was that it was an advertisement for his book and newsletter. 
Michael, if you are looking for some information that discusses this type of thing, and doesn't involve a book or paid subscription then try this one-

http://www.financialsense.com

Heaps of good info to be had


----------



## Sean K

I think your right professor. I did like how he retrospectively predicted all those other events through history though. Very talented man. I predicted the Great Flood, but you'll have to read my book to see how I did it.


----------



## Ageo

kennas said:
			
		

> I predicted the Great Flood, but you'll have to read my book to see how I did it.




Really??? where can i buy your book!!!!    


I would love to see his financial statements (bank balance).


Because if he stuck by what he has spoken about then surely he should be at least a bllionaire?

Anyone else who would like to see his bank balance?


----------



## Nick Radge

Very strange. This guy is mimicking EWI almost word for word. I wonder if they know? I wonder if he's like some agent for them?


----------



## nizar

ANything forecasted can should never be considered as "truth"


----------



## wayneL

wayneL said:
			
		

> ...in Saudi Arabia
> 
> http://www.zawya.com/equities/sa/
> 
> hmmmmmm.... what, if anything, is this telling us?




Update on the saudi stock market crash..

Down *50%*


----------



## Sean K

I hadn't even realised this had occurred. Must get out of my Dow Jones, ASX bubble. 

I couldn't find a reason why Wayne. What goin on? Strange it hasn't effected other markets so much, or has it? 

Think there'll eventually be a flow on to the West, or contained to the Middle East?


----------



## Ageo

Its been down trending since April which didnt seem to have an impact on the US till much later.

I hope it moves over here   If it does all i can say is "short, short, short!"


----------



## wayneL

kennas said:
			
		

> I hadn't even realised this had occurred. Must get out of my Dow Jones, ASX bubble.
> 
> I couldn't find a reason why Wayne. What goin on? Strange it hasn't effected other markets so much, or has it?
> 
> Think there'll eventually be a flow on to the West, or contained to the Middle East?




Well they did have quite a huge run up, leading up to this. But I do think it is foreboding.

I'm on record as a bear, but I don't think there will be a calamatous crash in the west... more like a 70's style bear across most asset classes (excluding certain resources). But that's just a guess.


----------



## GreatPig

wayneL said:
			
		

> Well they did have quite a huge run up, leading up to this.



Like nearly 80% gain in around 7 months!

Makes our 20% pa look miserly indeed.

GP


----------



## hissho

2007?

interestingly some who follow W.D.Gann religiously also claim we gonna have a big correction in 2007 coz all "7" years have been bad, with 1907 as the only exception...


----------



## tech/a

The chart for the last 106 years is here http://www.asx.com.au/research/market_info/history/all_ords.htm

Open the PDF file.

While some years ending in 7 were average the larger majority went without a hitch.

Other than May the most dangerous months to trade in are.
June
July
August
September
October
November
December
January
February
March
and
April.


----------



## michael_selway

michael_selway said:
			
		

> 2007 or 2008 latest (after Beijing Olympics) thats when the crash will occur, All Ords Terminal Value 6000+, will drop to 4000+ over a few months. DOW Terminal Value 12000+ drop to 10000+ over a few months. Commodity prices will also crash, especially metals. Oil and Uranium may fall but not crash
> 
> Then a very slow rise to stable from there for a 1-2 yrs at least
> 
> thx
> 
> MS




http://metalsplace.com/metalsnews/?a=5353

*Commodity strategists: Commodity 'bubble' to burst, SocGen says
Source: Bloomberg*

 Metals Board
Metals CatalogA commodity-price "bubble" may not burst until the fourth quarter, when higher interest rates slow economic growth and demand for crude oil, copper and other raw materials, Societe Generale said.

Commodities including zinc and platinum have reached records in the last several months. Prices may rise further in the third quarter because of speculation about supply disruptions and declining inventory, Frederic Lasserre, Paris-based head of commodities research at France's third-largest bank, said in three reports between May 26 and May 31.

"The idea of a bubble is starting to gain popularity among investors," Lasserre said in a telephone interview yesterday. "But the bubble cannot burst until there is a consensus that it exists in the first place. We are not there yet."

Commodity prices, as measured by the Reuters/Jefferies CRB index, have gained for four consecutive years, the longest winning streak since the early 1970s. In the third quarter, industrial metals will outpace precious metals, which in turn will outperform energy, Societe General predicts.

The index dropped 6.4 percent in the week to May 19, the biggest decline since 1980.

"We believe that this correction does not yet mark the end of the bull run and that performance should remain spectacular until the fourth quarter," Lasserre, 40, said in the reports.

Investors are divided on whether the bull market in commodities is over. Stephen Roach, chief economist at New York- based Morgan Stanley, the second-biggest U.S. investment bank, said May 15 the bubble will burst when China's economic growth slows. Jim Rogers, the former investment partner of George Soros, said on May 12 that record prices for raw materials will keep rising as demand outpaces supplies.

Metals gain
Copper has more than doubled in the past year, silver has gained 65 percent and gold has gained 52 percent. Oil climbed to a record $75.35 a barrel on April 21. Lasserre compared the commodity bubble with the surge in technology stocks in the late 1990s. Such bubbles tend to last an average of between nine and 12 months, he said.

Oil prices in New York, at $70.93 a barrel today, may average $67.50 in the fourth quarter and $58 next year, Societe Generale said. Prices may rise to an average of $76.50 in the third quarter, reaching as higher $80 in the period.

For copper, prices may rise to an average $9,500 a metric ton in the third quarter, before falling to an average of $7,650 in the last three months of the year. Prices, which are at $7,930 today, may fall to an average of $6,300 in 2007, the bank said.

Zinc may average $4,250 a ton in the third quarter before falling to an average of $3,100 in the fourth. Aluminium may average $3,350 a ton in the third quarter and $2,850 in the last quarter, the bank said.

Gold surges
For gold, prices may rise to an average of $770 an ounce in the third quarter before falling to an average of $650 in the fourth quarter. Prices, which were at $633.20 today, may average $573 next year.

Investors are diversifying from stocks and bonds and investing in so-called alternative investments such as commodities, real estate and hedge funds. Fund investments in commodity indexes and other products may exceed $120 billion by 2008, compared with $80 billion last year, according to estimates from Barclays Plc.

"The massive injection of capital in markets, which do not have the capacity to absorb it in such a short time, quite logically created unusual price behavior," Lasserre said.

Lasserre has worked for Societe Generale for the past 10 years after teaching economics and finance at the Bordeaux Business School in France


----------



## jet-r

omg..!!

the base metal spot prices are dropping like stones...!!

Copper is down 4.65%
Nickel is down 13%
Alumium down 3%
Zinc down 8%  and
Lead down 3.80%

not looking forward to tomorrow's opening


----------



## Ageo

jet-r said:
			
		

> omg..!!
> 
> the base metal spot prices are dropping like stones...!!
> 
> Copper is down 4.65%
> Nickel is down 13%
> Alumium down 3%
> Zinc down 8%  and
> Lead down 3.80%
> 
> not looking forward to tomorrow's opening






I am definately looking forward to tommorrow. If you hold stock that is ETO tradeable then why not write covered calls against it? at least it will minimize the downside loss?

Makes more sense to me instead of just holding and praying.


----------



## tech/a

Could you give us an example of say,

How far out you'd write the call and strike price?
How you'd determine both?

Lets say Im trading BHP.


----------



## ducati916

Unless the MM is nursing a hangover, suffering double-vision drowning in coffee, when the market tanks, Call premium evaporates, but, any bounce can play havoc with your escape clause.

jog on
d998


----------



## Ageo

Tech,

once i have access to premiums later on i will explain.


----------



## daaussie

And my 2 bobs worth is....

the rumour and talk of a crash around the market i believe is non-sense. everyone tries to make predictions, but the truth is that trading and stocks is the hot thing of today's time.

everyone from kids, teenages and up are doing it because it is becoming increasing easy with the internet speeds and online broking etc.

I doubt whether there will be a crash and in my opinion this rumour has been started by some key very rich and prominent people who have sold out and are looking to bring the market down so they can re-invest more profitably. 

And now for my example of the past where this has happened. The property market in Aus exploded and yes i invested in 2001 where it had done a significant jump of 30-40%. people told me (and this was all the property experts and general public followed) that the market may crash and it was the boom. I bought anyhow. Since then, my property went up a further 110% in 1-2 years. Bust my ass... 
I increased the portfolio in 2003 and yes I still got some bargains. now property prices have steadied and will remain steady (with a possible chance to increase 2-3% per annum) IN MY OPINION.

So yes I am an iindependent thinker on my own feet.

that's my 2 bobs worth..

hope someone benefits..


----------



## tech/a

Aussi

I did the same. Friends constantly through 2000 chastised me in particular when we bought multiple properties gearing to the max as properties increased in equity.

Last properties were bought in 2002. Have sold 3 with another 2 on contract for after 30/6 leaving most holdings then freehold.
Equity will then be channelled elsewhere--increasing my stock portfolio's will be one place.

As a property developer some will be going toward community title high density developements.This is where the demand is in Adelaide.


----------



## powerkoala

Is this really the doomsday for metal ?
cant figure out what to do next....


----------



## Sean K

Chindiapanaiwan did not stop develping overnight! 

The fundamentals are still there. Hold on and be prepared to buy when you see a good opportunity.


----------



## powerkoala

copper may revive as strike in Mexico

0459 GMT [Dow Jones] LME 3-month copper at $7,625/ton, down $75 on London PM
kerb, but off intraday low of $7,595 hit in early Asian trade. Support coming
from news that workers at Grupo Mexico's Cananea copper mine on strike - workers
commemorating 100th anniversary of 1906 walkout that ended in violence; Grupo
says full effect of walkout wouldn't be clear until today. Good news for copper
bulls if strike prolonged, says Shanghai-based analyst; overnight Grupo
announced its Mexican copper output expected to fall in 2006 as result of
ongoing strike at its La Caridad mine.

-------
hope this is true


----------



## Ageo

tech/a said:
			
		

> Could you give us an example of say,
> 
> How far out you'd write the call and strike price?
> How you'd determine both?
> 
> Lets say Im trading BHP.





Sorry it took so long,

ok this would be one way i would look at minimising my downside exposure.

Lets say i bought BHP @ $28.50 

BHP moves down to $28.14 (36c down).

I write a covered call with a $30 strike ($1.50 away from your bought price) for a premium of 43c (asx qoute) June Expiry. Now if it continues to down trend for this month (or stays below your purchase price) and your praying that it comes up well at least you can offset your loss.

Obviously i would have a stop loss in place (money management) to cap my loss for a worst case scenario. So lets say i was happy to place my stop at $26.00. So my worst case loss would be $2.07

If it stayed above $26 but below even say $28.50 then i have reduce my loss (by 43c).

If its above $28.50 but below $29.50 (you can either buy back your position  but your still in profit because of the capital gain) or let it expire worthless and receive 43c as a credit.

If it starts to move above $29.50 then you can simply buy your call back and have a capital gain profit. Even if it costs you a tad more to buy it back you will still be better off.

Now i would only do this if in a correction phase or even a stagnate position. But in a bull run i would just move my stop loss up and lock the profits in.


Adrian

(This is my personal view)


----------



## wayneL

ducati916 said:
			
		

> Unless the MM is nursing a hangover, suffering double-vision drowning in coffee, when the market tanks, Call premium evaporates, but, any bounce can play havoc with your escape clause.
> 
> jog on
> d998




After the caffeine kicks in though, he/she will sell puts, buy calls and short the stock for a risk free arbitrage profit, forcing the restoration of parity.

If the puts are exercized (presumably at a much lower stock price) he/she ends up with crystallized profit and a lottery ticket long call.

But the bounce for CC players certainly would be unwanted, thats for sure.


----------



## Sean K

Oooh, It's going to be ugly for equities today. DJIA in the red 1.7%. Ouch! Bernanke standing on his todger again, ramping up the prospect of higher rates. Perhaps there's a plan there. Somewhere.   

Gold up. Maybe the yellow metal will be back in favour for a little bit.


----------



## noirua

kennas said:
			
		

> Oooh, It's going to be ugly for equities today. DJIA in the red 1.7%. Ouch! Bernanke standing on his todger again, ramping up the prospect of higher rates. Perhaps there's a plan there. Somewhere.
> 
> Gold up. Maybe the yellow metal will be back in favour for a little bit.




Yes indeed, and Doctor Doom ( Dr Marc Faber ) has been on Bloomberg to add to the depression; He favours US bonds and the US Dollar for the 3 - 6 month period, on a view that there will be a flight to quality. His long term view is bearish on the US Dollar. He will state further views on Bloomberg after the ASX opens.


----------



## RichKid

noirua said:
			
		

> Yes indeed, and Doctor Doom ( Dr Marc Faber ) has been on Bloomberg to add to the depression; He favours US bonds and the US Dollar for the 3 - 6 month period, on a view that there will be a flight to quality. His long term view is bearish on the US Dollar. He will state further views on Bloomberg after the ASX opens.




Do you have the links to the interviews please? I couldn't find them.


----------



## mit

kennas said:
			
		

> Oooh, It's going to be ugly for equities today. DJIA in the red 1.7%. Ouch! Bernanke standing on his todger again, ramping up the prospect of higher rates. Perhaps there's a plan there. Somewhere.
> 
> Gold up. Maybe the yellow metal will be back in favour for a little bit.




I wouldn't be surprised if he retracts some of his statements again. The American markets are still used to Greenspans very measured and understated style.

MIT


----------



## wayneL

mit said:
			
		

> I wouldn't be surprised if he retracts some of his statements again. The American markets are still used to Greenspans very measured and understated style.
> 
> MIT




I think if he does that again, he'll really tank it. It will spotlight the fact he doesn't know what he's doing.

Historically, the economy usually tanks soon after a new fed chairman, apparently.


----------



## powerkoala

Another south for tomorrow...
This is too much....
I lose hope that the market will ever bounce back...
Any ideas ?


----------



## nizar

powerkoala said:
			
		

> Another south for tomorrow...
> This is too much....
> I lose hope that the market will ever bounce back...
> Any ideas ?




my original target still remains: 4800-4900 for asx200

there will be increased volatility i think at least until the fed meeting 28/29 june


----------



## wayneL

From the people economist:



> Talking with broker Robin Landry, one of the best technicians I know, during the final minutes of yesterday's nose bleed, he made a very interesting observation:  "George, I think one of the big hedge funds might be in trouble..."  Naturally, I asked the obvious follow up question - "How can you tell, Robin?"
> 
> "George, when the price of oil is up like it is (was yesterday) and you see the big energy stocks dropping, it might be telling us that someone is in trouble."
> 
> Could be.  But, as Landry notes, the market looked short-term oversold yesterday, so maybe we will bounce this morning - the futures point that way. The bigger question: How long can we tread water when Ben Bernanke is admitting he's worried about inflation?




Jack be nimble


----------



## Nick Radge

Here is the DJIA which has been the strongest of the US indices. I've been stating for awhile that this market was due and last night (not shown below) cracks the DJIA open. The Nasdaq, which contains a little over 3000 stocks,  was the first to confirm the down move awhile back. Next the S&P 500, which has 500 stocks, followed suit. Last night the DJIA, with just 30 stocks has confirmed. We've been seeing a trickling effect up from the broader market to the major's. I've been showing how using the patterns within the S&P 500 on its own, then converting into DJIA points and then into XJO points how all the charts correlate with the same targets to the downside. 

The S&P is showing a minimum decline of approxiamately 50-points basis an Elliott Wave count. This converts to roughly 550 DJIA points. If we look at the DJIA chart below, the measured move out of the head & shoulders top is exactly 550-points below. In the XJO in converts to roughy 250 points. The _maximum_ wave-4 corrective move in the XJO is 4680, but the current price minus the 250 equates to 4780 which sits nicely above the wave-iv maximum move.

For the fibonacci doubters, the recent corrective retracement was exactly 0.382%, although slightly shallow for my liking. A shallow retracement on light volume is not a good sign.


----------



## coyotte

Probably scare tactics by the US Feds

How can they increase interest rates next time when their housing industy gone bust ?

this has worked perfectly ? --- took the specs out of all markets --- so by the time of next round of rates review this have settleled


----------



## Sean K

Once the Fed actually provides the decision one way or the other the markets will settle. It's the uncertainty that has most people rattled I reakon and contributed to the volitility. 

I still think the 50% fib retracement line at 4800 for our market is where the true support will be found and that will be a good entry point back into the general market.


----------



## professor_frink

nick mentions 4780 as a possible target- It looks like we could find some support around that area from the lows made in feb.


----------



## noirua

Washington Post - Ben Bernanke:Tough Guy

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/06/AR2006060601324.html


----------



## bowser

noirua said:
			
		

> Washington Post - Ben Bernanke:Tough Guy
> 
> http://www.washingtonpost.com/wp-dyn/content/article/2006/06/06/AR200606060601324.html
> 
> Checking link at the moment.




Page no longer available, do you have another link?


----------



## noirua

bowser said:
			
		

> Page no longer available, do you have another link?




I was checking the link, you will find it OK now.


----------



## noirua

RichKid said:
			
		

> Do you have the links to the interviews please? I couldn't find them.




The only link I can find is the following, not quite the same as the Bloomberg TV interview in the US, Hong Kong and UK: http://www.gloomboomdoom.com/marketcoms/mcdownloads/060605.pdf


----------



## visual

so much for the experts and their considered opinion re bull market having years to run,doesnt look like it ,why the hell do I even listen to these experts. :swear:


----------



## GreatPig

I think the XAO can go down to around 4600 and we'd still be in the bull market that started in early 2003.

GP


----------



## visual

GP,honestly how can it still be a bullmarket,if it takes everything back,to me that sounds like crazy talk. :


----------



## Sean K

I don't think anyone has said the market was going up another 30% this year! In fact, I think the average call was about 10% which is good after 3 years of 25%ish growth. The ASX pe is now below the long term average, so it must eventually go up!

I think the bears are dominating discussion at the moment. It will only take a few days of good news and recovery and the bulls will be out in force. 

This is just a correction and I am still tipping the turn around will occur at the end of the month.


----------



## mit

visual said:
			
		

> GP,honestly how can it still be a bullmarket,if it takes everything back,to me that sounds like crazy talk. :




By Dow Theory it is a correction until the Market takes out the last significant Low before the market peak.


----------



## visual

Kennas,not in the mood   of course I dint expect 30%rise as you put it but expert after expert was convincing in their claim that this was only a temporary correction the market just dropped 20 or more points in a heartbeat,geesh  
even the banks are going troppo.Wheres safe.

Kennas nothing personal I just dont really know what i`m doing but by the looks of things neither do the experts.So now I`ll have to stick it out longer than I intended.oh well


----------



## powerkoala

Correction suppose to stop in a month?
But this is wiping all the gain since Dec last year.
Too much for correction, do you agree?


----------



## wayneL

Whoa!

If this keeps up I'll have to turn bullish (just to be contrarian  )


----------



## powerkoala

Nice one Wayne.... LOL


----------



## GreatPig

visual said:
			
		

> honestly how can it still be a bullmarket



To me, above the bottom trend line is still in the current bullmarket.

Cheers,
GP


----------



## mit

Does anybody know what caused the move over the last hour and a half? I assume that it is coming from overseas as CMC is showing the S&P500 as dropping as well. I can't see any news anywhere that would have caused it.

MIT


----------



## visual

see GP,this is the problem I have with charts
they seem to read the past flawlessly,why cant they say the same thing before it happens not after,cant be that difficult can it,
yep i`m raving


----------



## Sean K

0534 GMT [Dow Jones] S&P/ASX 200 down 1.9% at 3-month low of 4932.5. "This is obviously the capitulation day," says Charlie Aitken at Southern Cross. "There's some panicky action in the trading." Patrick Crabb at Goldman Sachs JBWere concurs. "There's stop-lossing and panic selling because we couldn't hold 5000, the market thinks the next stop is 4800. There's been redemptions in Asian equity funds causing forced selling of the Japanese market." Says surprise rate hike from South Korea also shook confidence in the region. Volume will be decent US$5 billion plus by the close. (DWR)


----------



## mit

Thanks Kennas.


----------



## wayneL

kennas said:
			
		

> 0534 GMT [Dow Jones] S&P/ASX 200 down 1.9% at 3-month low of 4932.5. "This is obviously the capitulation day," says Charlie Aitken at Southern Cross. "There's some panicky action in the trading." Patrick Crabb at Goldman Sachs JBWere concurs. "There's stop-lossing and panic selling because we couldn't hold 5000, the market thinks the next stop is 4800. There's been redemptions in Asian equity funds causing forced selling of the Japanese market." Says surprise rate hike from South Korea also shook confidence in the region. Volume will be decent US$5 billion plus by the close. (DWR)




Hah!

That guy has obviously never seen a real capitulation.


----------



## wayneL

wayneL said:
			
		

> Hah!
> 
> That guy has obviously never seen a real capitulation.




Hope that didn't come across wrong kennas.

That was not meant to reflect on you in any way, and thanks for posting it  

Cheers


----------



## Sean K

No dramas, I didn't think it was referred to me.

I personally haven't really experienced a 'capitulation' save for the dot com crash where I lost a bit. I had most of my money in managed funds then.   

Fundamentals for the Aussie market are still solid across the board imo. There will be no 'crash'. This is an opportunity.


----------



## visual

Kennas,this is an opportunity as long as you have money,well thats the thing thats really annoying me,I had the money miscalculated and now ,well what can you do.

I know you cant pick the bottom but I didnt pick at all well   :swear:


----------



## RichKid

GreatPig said:
			
		

> To me, above the bottom trend line is still in the current bullmarket.
> 
> Cheers,
> GP




The problem with going only by trendlines is that it's much more of an art than a science.


----------



## IGO4IT

Hi guys,

I think US$ may get some support, this is on the CNN headlines now:

*Terror leader al-Zarqawi dead, Iraqi officials say*

http://www.cnn.com/2006/WORLD/meast/06/08/iraq.al.zarqawi/index.html


----------



## wavepicker

GreatPig said:
			
		

> To me, above the bottom trend line is still in the current bullmarket.
> 
> Cheers,
> GP




Good point, but there is only one problem. If you draw a trendline originating from the Jan 1991 low, we can hit 3750-3900 and technically still be in a long term bullmarket. Take your pick?

I reckon this "correction" will last much longer than most pundits expect with plenty of suckers rallies on the way down just to really frutrate most. When resource stock traders are utterly disgusted with their stoxxx and ultimately resign to the fact that their stocks will not go up in a hurry, that is when we will resume the resource bullmarket.


----------



## dodgers

Interesting that yogi-in-oz mentioned 7/8 June as a stand-out period sometime ago (and also mid-May)...I'm hoping we're approaching bottom now...good buying opportunity for all...unfortunately I did my buying 2 weeks ago   

Question is I can never decipher from his postings what happens after that..!

Either way - a bear or a bull market, we should see a rally short-term giving investors the exit if they've lost their nerve. 

A good report (attached) by Macquarie today showing how metal prices lag OECD indicator (i.e the US) by 6 months...

Thoughts?


----------



## bunyip

About three days before the market starting caving in recently I heard an address by Brian Costello, director of The National Institute Of Financial Studies. 
Brian expressed the opinion that the bull market is finished, the commodity boom is finished (except for Gold which he says will have another run), the Dow will fall to the mid 4000 level, and Australia will be in recession next year.
As I said, he expressed these views BEFORE the market started falling apart.

I don't know or care whether his views will be proven accurate, nor do I have an opinion either way.
I've always maintained that traders have the opportunity of profiting in both bull and bear makets, and therefore don't need to be concerned about the possibility of this market plunging much further.

Bunyip


----------



## mit

Well it looks like Zarqawi has been captured. I wonder if this will give the US a boost overnight. The original invasion of Iraq started this Bullmarket off so it is not as stupid as it sounds. Market's going up or down is driven by emotion. The Reserve Bank moves interest rates to affect our behaviour not because their is a correct interest rate.

Even though the market has had a terrible end today, I feel that we may be near the correction bottom. I have noticed that the market drops over the last week have been very unevenly spread. Even with today's 105 point drop, it was only 2 or 3 of my stocks that dropped a lot, most just dropped a cent of two.

MIT

ps I know I may end up eating my words.


----------



## wayneL

mit said:
			
		

> Well it looks like Zarqawi has been captured. I wonder if this will give the US a boost overnight. The original invasion of Iraq started this Bullmarket off so it is not as stupid as it sounds. Market's going up or down is driven by emotion. The Reserve Bank moves interest rates to affect our behaviour not because their is a correct interest rate.
> 
> Even though the market has had a terrible end today, I feel that we may be near the correction bottom. I have noticed that the market drops over the last week have been very unevenly spread. Even with today's 105 point drop, it was only 2 or 3 of my stocks that dropped a lot, most just dropped a cent of two.
> 
> MIT
> 
> ps I know I may end up eating my words.




No reaction on the futures so far.


----------



## ctp6360

wayneL, where can I watch the futures index for free or a modest fee?


----------



## mit

wayneL said:
			
		

> No reaction on the futures so far.




Yeh, I have been watching the CMC's version of the S&P and it has been pretty flat since the close of our Market (Predicting a 10 point drop in the cash market). I can't remember March 2003. Did the overnight S&P predict the big rise? I was thinking that the futures traders were too cool headed, that the emotional response would come with the cash market. 

MIT


----------



## mit

ctp6360 said:
			
		

> wayneL, where can I watch the futures index for free or a modest fee?




Once place is to use this link

http://money.cnn.com/data/premarket/. There are probably other sites that will give nice graphs.

MIT


----------



## ctp6360

thanks Mit much appreciated!


----------



## pacer

Put your head between your legs and kiss your money good bye.......I went short on friday on RIO hehe  lolo hehe........CU at the pub!!!!!


----------



## wayneL

Here is a dynamic chart (i.e. it will update everytime you load this page) of the S&P







and here is the link if you want to save it

http://charts.futuresource.com/cis/...1,221,221)&showextendednames=true&random=2920

Otherwise -  for charts www.futuresource.com

That CNN link is a good one too, thanks mit.

cheers

<edit> oops the image doen't show... just click on the link


----------



## visual

zarquawi is dead channel 2 news


----------



## wayneL

visual said:
			
		

> zarquawi is dead channel 2 news




SHEESH! Last year the market would have gone bananas with such news.

The lack of reaction is truly bearish IMO... but the day is not over yet.


----------



## IGO4IT

The DOW will have to respond to Zarqawi's news positivily. this guy's death may mean a possible earlier pull out of Iraq!!

I think I'm just hoping for a reversal for whatever reason 

cheers,


----------



## mit

I first saw it as a news break timed around 5:30(EST). There was a little spike in the S&P around about this time. I don't know if it was connected.



> The DOW will have to respond to Zarqawi's news positivily. this guy's death may mean a possible earlier pull out of Iraq!!
> 
> I think I'm just hoping for a reversal for whatever reason




That's why I never trade my gut feeling, it's hard to separate from wishful thinking. Although, my connection was more about assurance of oil supplies rather than soldiers coming home, but that's a good one as well.

MIT


----------



## serp

What time does the DOW open trading AEST?


----------



## Would Be Trader

I believe the Dow starts trading at 11.30pm


----------



## nizar

mit said:
			
		

> That's why I never trade my gut feeling, it's hard to separate from wishful thinking.





soo true

everything seems to be collapsing; nikkei down by 500pts, ftse down by 100pts, hang seng 350pts, dow futures looking grim, korea rates up, european central bank rates up, oil down, gold down

i thought u had to die before u go 2 hell


----------



## mit

Futures are heading up CMC has S&P at 1253. Still below yesterdays close but it was around 1245 at our market close and the DOW currently at 10930.

Time for bed.

MIT


----------



## IGO4IT

Look at this one guys, THIS IS A CLASSIC.

Bush is saying that he's considering killing of zarqawy a success in Iraq & also getting out of Iraq soon & 1 hour before markets open 

http://news.yahoo.com/s/nm/20060608/pl_nm/iraq_zarqawi_bush_dc_2

Petrol is already down on news 

I knew they had to pull out a couple of tricks from their sleeves


----------



## coyotte

visual said:
			
		

> see GP,this is the problem I have with charts
> they seem to read the past flawlessly,why cant they say the same thing before it happens not after,cant be that difficult can it,
> yep i`m raving





Very simple lesson in the chart posted just prier to your post ,by GreatPig

Notice the bubble in price above the top tread line 
this is telling you that this is unsubstaniable and predicting a fall back between the two lines (normal trading range )

You must learn to hold your own counsol & not relly on others -- otherwise you are just following the sheep


this is a tremendouse learning oppurtunity -- learn from this so as to profit when the REAL bear hits !


----------



## powerkoala

Here we go
Another RED tomorrow
Let's celebrate 
To our BEAR,...  :swear: 
--Shoot in the head--
Bang Bang Bang....


----------



## serp

The DOW is up at the moment, I don't see all the big fuss.


----------



## coyotte

serp said:
			
		

> The DOW is up at the moment, I don't see all the big fuss.



It a'nt now


----------



## noirua

As of posting: FTSE 100 is down 107.4 ( 1.88% ) at 5599; Dow Jones 40 is down 21.13 at 10,909.47; Euro interest rates rise to 2.75%; UK interest rates kept at 4.50%; Oil price falls on death of Abu Musab al-Zarqawi in Iraq, UK Brent US$68.35 and US sweet crude at US$69.54; and UK manufacturing output fell 0.2%.

BP down 3%, Lonmin down 7%, Xstrata down 6.5%, Tesco up 1.5%,  Merrill Lynch World Mining IT down 4%, BHP down 6%, Templeton Emerging Market IT down 4% and Anglo-American down 6%.


----------



## brerwallabi

noirua said:
			
		

> As of posting: FTSE 100 is down 107.4 ( 1.88% ) at 5599; Dow Jones 40 is down 21.13 at 10,909.47; Euro interest rates rise to 2.75%; UK interest rates kept at 4.50%; Oil price falls on death of Abu Musab al-Zarqawi in Iraq, UK Brent US$68.35 and US sweet crude at US$69.54; and UK manufacturing output fell 0.2%.




And the great thing is we are in bull market - rock on.


----------



## wayneL

noirua said:
			
		

> As of posting: FTSE 100 is down 107.4 ( 1.88% ) at 5599; Dow Jones 40 is down 21.13 at 10,909.47; Euro interest rates rise to 2.75%; UK interest rates kept at 4.50%; Oil price falls on death of Abu Musab al-Zarqawi in Iraq, UK Brent US$68.35 and US sweet crude at US$69.54; and UK manufacturing output fell 0.2%.
> 
> BP down 3%, Lonmin down 7%, Merrill Lynch World Mining down 4%, BHP down 6% and Anglo-American down 6%.




....and I've run out of cartoons. Damn, I'll just have to recycle old ones!  

Hang on! Have I done this one?\/


----------



## noirua

Gold PM fix in London at US$614, FTSE 100 reverses further down 2% and DOW 40 declines further -44.03, US Dollar strengthens.

Consolidated Minerals declines further at 73.5p, down 2.5p.


----------



## wayneL

Yo! Getting Fugly!!


----------



## BentRod

LMAO Wayne....where do you get this stuff from?

Very funny mate.

Should be a good day for the bears tomorrow.

where do I get a badge??


----------



## wayneL

BentRod said:
			
		

> LMAO Wayne....where do you get this stuff from?
> 
> Very funny mate.
> 
> Should be a good day for the bears tomorrow.
> 
> where do I get a badge??




I grab them when I see them   

Would you like the Uberbear badge or the regular Grizzly Bear badge?


----------



## BentRod

I'll take the Uber 1337 Fanx :


----------



## mit

A bit of a wild ride back to where it started DOW closed +8 after being down -179 during the night. Is this the bottom of the correction? or is it a little breather before then next big drop. Stay tuned for more excitement.

MIT


----------



## bullmarket

mit said:
			
		

> A bit of a wild ride back to where it started DOW closed +8 after being down -179 during the night. Is this the bottom of the correction? or is it a little breather before then next big drop. Stay tuned for more excitement.
> 
> MIT




could be a dead cat bounce...  

cheers

bullmarket


----------



## nizar

Correction finished?

"The heavy trading volume today was a good indication that we were nearing the end of this decline," said Peter Cardillo, chief strategist at SW Bach & Co.

"I think the market is probably going to begin to stabilise over the next couple of days."

http://afr.com/articles/2006/06/09/1149359913899.html


----------



## bullmarket

Hi nizar

my gut feeling is that there could be a dead cat bounce within the next few days but imo the trend on the daily XJO chart is now clearly down since early May.

I'm sticking to my posts and thoughts of the last few weeks that XJO will settle in the 4800-5000 range for the forseeble future.  I think that a retesting of ~4800 is definitely on the cards now in the short term.

cheers

bullmarket


----------



## Sean K

The dead cat was 5000 back to 5100, now correction, consolidation. PEs must be looking very good now. No company downdgrades that I have seen. Should be all record reports again this year.


----------



## bullmarket

Hi kennas



			
				kennas said:
			
		

> The dead cat was 5000 back to 5100, now correction, consolidation. PEs must be looking very good now. No company downdgrades that I have seen. Should be all record reports again this year.




I still don't see the average market PER's as 'very good' yet.

I posted my average market PER's spreadsheet a few months back.  Imo the PER's are now at the very best 'fair value' but I still think there is more downside than upside risk for at least the short term.  Imo there will probably be another dead cat bounce during the next week or so as part of the downtrend from early May (ref: XJO daily chart) but a retesting of ~4800 is likely in the forseeable future the way I see it.

cheers

bullmarket


----------



## Sean K

Bull, I saw a chart a couple of days ago that had the pe plotted and it was well under the average. Market's gone down a couple of % since then so I'm just ass u me ing that it's even more under the average.


----------



## bullmarket

ok no problem kennas 

the reason I created my own spreadsheet is because I got sick and tired of seeing different 'market PER's' quoted in various parts of the media.  

The differences are probably due to some analysts using current EPS numbers, some using forcast EPS numbers and some using a prorated number of both.  I also don't know if they use current share prices (which means I don't know how old the chart is) or whether they use some sort of weekly, monthly or whatever average share price.  I also don't know if the company constituents of 'media PER's' is up to date (S&P update their indexes every 3 months)...._hence I created my own spreadsheet which calculates the average weighted and unweighted PER for the ASX50,100,200,300 indexes based on the current constituents of each index sourced from the S&P website, 12 month forcast EPS figures and the current share price._

Now I only use my spreadsheet when looking at PER's because at least I know how the PER is calculated.

cheers

bullmarket


----------



## nizar

kennas said:
			
		

> The dead cat was 5000 back to 5100, now correction, consolidation. PEs must be looking very good now. No company downdgrades that I have seen. Should be all record reports again this year.




Agree

Actually OXR earnings was upgraded about 2 weeks ago and theres also been a few outperform calls since them, one from Goldmans and another from Citigroup

Zinc supplies are still running out, copper also very tight, fundamentals have not changed, and companies are still very profitable


----------



## Sean K

I wish I had time to create all those spreadsheets! 

Unfortunately, I am just another follower, reliant on the media to give me the news that I want to hear so I keep going back to improve their ratings....

I'm not sure if a finance editor for the Fin would keep his job for very long though if they published out of date or incorrect data.


----------



## bullmarket

Hi kennas, nizar
re:



> Should be all record reports again this year.




I'm not convinced that will be the case, but imo what is just as important if not more important than a company result is the company's stated outlook for the follwing 12 months.....remember markets are generally looking forward 6-12 months at any given time   

re:



> I'm not sure if a finance editor for the Fin would keep his job for very long though if they published out of date or incorrect data.




I'm not saying anybody's data is wrong.  I'm just saying that I have seen different PER's quoted in the media and by 'analysts' in TV interviews etc and so it boils down to how each of them calculate and interpret their results.  I haven't seen anyone of them disclose how they calculate their PER's and what data they use and so I decided to calculate my own using a spreadsheet and I posted it on this site a few months ago for anyone to play with if they liked 

cheers

bullmarket


----------



## professor_frink

Frinky is switching into cash folks! Making my weekend as long as possible- the sun is out, I'm off to play golf after lunch  

RSI on the xjo indicating we could have a bounce soon and I ain't gunna hold long option premium through this weekend, so to quote my favuorite(not!) television 'personality' gretel killeen- it's time to go..... professor.

Have a good weekend all


----------



## bullmarket

Looks like XJO is 'stuck' in the 4800 - 5000 range for the forseeable future 

cheers

bullmarket


----------



## nizar

Bullmarket

Looks like we'll never know until we reach the "forseeable future"


----------



## bullmarket

Hi nizar 

I suppose so, but back on the 19th April I posted :



> I suppose a lot depends on how people differentiate a correction from a crash.
> 
> About 4 weeks ago I uploaded a spreadsheet that calculates the average PER for various market indexes. Back then the average prospective weighted PERs (by mkt cap) for the ASX50 to ASX300 indexes were all in the ~16-17 range. I haven't updated the spreadsheet with the latest prices but obviously the PERs would be a little higher now.
> 
> There used to be a ball park rule of thumb that said a fair PER was 20 minus the inflation rate. With inflation at ~3% then I see a fair market PER as ~17 atm.
> 
> Blind Freddy can see that overall our market is not cheap but I don't see it as grossly expensive either. Therefore I'm not expecting a 'crash' atm, especially based on company fundamentals. But having said that, looking at the weekly XJO chart I think it would only take a reasonably credible hint from somewhere that inflation was looming (due to high oil prices or whatever) and that will take a lot of steam out of the market.
> 
> Imo, a retrace back to the ~4800 (~9% drop) January support levels would be a 'healthy correction' and not a crash if looking at the overall long term scheme of things of the bull market that started after the '87 crash (now '87 was a crash  )
> 
> A continued fall below 4800 then obviously all bets are off as that would be a pretty strong signal for me that we are starting a much more likely sustainable bear market.
> 
> Finally, all of the above should be taken in context depending on what time frames you invest/trade in.
> 
> Anyway, just food for thought




In subsequent posts in other threads I said that I felt XJO will settle in the 4800 - 5000 range and I still think XJO will remain there 'for a little while' yet   

Below is the weekly XJO chart fwiw.

cheers

bullmarket


----------



## NettAssets

"The stock market is crashing"
Sure looks like it today  
Glad I loosend off a couple of my stop losses last night in case we take a bit of an early swing cause it sure wont last long
John


----------



## TraderPro

NettAssets said:
			
		

> "The stock market is crashing"
> Sure looks like it today
> Glad I loosend off a couple of my stop losses last night in case we take a bit of an early swing cause it sure wont last long
> John





Was the "loosening" a part of your trading plan or just a "gut" feeling?   

Good Luck!


----------



## NettAssets

TraderPro said:
			
		

> Was the "loosening" a part of your trading plan or just a "gut" feeling?
> 
> Good Luck!



Part of my Trading Plan
although definitely a discretionary part.
I check the OS markets before our pre-open and if I have anything that is on my trailing stop list with a fairly tight stop and it looks like the market will head straight up I back out a bit so I don't get caught out early. My feeling is the low to midcaps I trade tend to take a while to catch up with the market sentiment.
John


----------



## bullmarket

XPJ is doing its best trying to retest the previous all time high....and many LPT's go ex-distribution on Monday 

cheers

bullmarket


----------



## wavepicker

DJI looking to be on skaky ground at present,
looking for a possible resumption in the downtrend in world indices next week


----------



## Sean K

I'm feeling nervous about the Fed announcement tonight. I'm expecting the 25 basis point rise, but I'm worried Mr B is going to say that there could be another interest rate rise in August. This will send a shiver through the market, especially PMs. Gold will be smashed. 

What's your guess?


----------



## wayneL

kennas said:
			
		

> I'm feeling nervous about the Fed announcement tonight. I'm expecting the 25 basis point rise, but I'm worried Mr B is going to say that there could be another interest rate rise in August. This will send a shiver through the market, especially PMs. Gold will be smashed.
> 
> What's your guess?




There is even speculation of a .5% hike. 

Now THAT would be interesting! Let's see if they have the cojones to do it!


----------



## kgee

With all the arm waving going on a .5% hike would'nt surprise me at all


----------



## Smurf1976

With Japan, a major source of global cheap money, "removing excess liquidity" the trend is very much towards tightening so it's hard to see why ANY financial asset class (apart from cash) would boom.


----------



## GreatPig

So what time exactly does the world end?

GP


----------



## wayneL

GreatPig said:
			
		

> So what time exactly does the world end?
> 
> GP




At 2:15PM New York time, it's all over :


----------



## GreatPig

Obviously no one's told the Poms. The FTSE is up 1.2% at the moment.

GP


----------



## Bobby

As for me _____ going long for tomorrow   

Bob.


----------



## wayneL

GreatPig said:
			
		

> Obviously no one's told the Poms. The FTSE is up 1.2% at the moment.
> 
> GP




Well with the end of the world imminent, oil is bound to go up... allegedly this is driving the FTSE today.... and I doubt that the Helicopter boy will go .5 anyway.

This will allow Crash Gordon and Mervs merry band of sycophants, to deny reality for just a bit longer.


----------



## YOUNG_TRADER

wayneL said:
			
		

> Well with the end of the world imminent, oil is bound to go up... allegedly this is driving the FTSE today.... and I doubt that the Helicopter boy will go .5 anyway.
> 
> This will allow Crash Gordon and Mervs merry band of sycophants, to deny reality for just a bit longer.





'Helicopter boy', 'Crash Gordon' and 'Mervs merry band of sycophants'


----------



## GreatPig

Well by some accounts, a 0.5% hike could incite a stock market rise even more than a 0.25% hike.



> The stock market might stage a huge rally in the next few months if investors see a half-point increase and conclude that the Fed's rate-raising campaign is finally over



GP


----------



## GreatPig

So far so good...

From US Yahoo market overview:



> 09:00 am : S&P futures vs fair value: +6.6. Nasdaq futures vs fair value: +6.5.  The stage is set for stocks to open sharply higher as futures indications continue to trade comfortably above fair value. Broad-based gains in overseas markets, many of which have gained more than 1.0%, are lending some support.



Dow, Nasdaq, and S&P500 all up 0.6% to 0.9% at the moment (or rather 20 minutes ago...).

Can Big Bad Ben kill it though?

GP


----------



## wayneL

GreatPig said:
			
		

> Well by some accounts, a 0.5% hike could incite a stock market rise even more than a 0.25% hike.
> 
> 
> GP




Interesting view. One I'm struggling with BWTFDIK!


----------



## kgee

wayneL said:
			
		

> Interesting view. One I'm struggling with BWTFDIK!




To right talk about putting a silver lining on everything  
I mean to a layman like myself a 50 pt rise would imply that inflation is getting away and that theyr'e trying to put the brakes on
just goes to show....everyones got there


----------



## NettAssets

Well .. I hope our Bears didn't go short on the nasdaq just for the news

John


----------



## wayneL

NettAssets said:
			
		

> Well .. I hope our Bears didn't go short on the nasdaq just for the news
> 
> John




hehe
Bear survival rule #11 Don't be a silly bear! Never underestimate the influence of the Wall Street Cheerleading Squad.
Bear survival rule #12 Get flat prior to announcements
Bear survival rule #13 When the bulls charge, pretend to be a bull!

This is quite extrordinary BTW


----------



## NettAssets

Not showing much sign of slowing down


----------



## wayneL

NettAssets said:
			
		

> Not showing much sign of slowing down




Well that was either one helluva bullish day or one helluva short squeeze.

The overall pattern looks bullish to me 

The risk reward ratio for my index option trades have shifted dramatically after that.... metamorphosis in order.


----------



## ctp6360

What a great day to be standing outside the NYSE  

Up *217.24* points or *+1.98%*

This is me and my fiancee Donya outside the NYSE today at about 1pm! I was suprised at the lack of scolling prices and big flashing signs, I only saw one of them and it wasn't exactly detailed. The ones in times square have a lot more detail!


----------



## Sean K

You must have a fast car to score a girlfriend like that ctp!


----------



## MichaelD

wayneL said:
			
		

> Well that was either one helluva bullish day or one helluva short squeeze.



Seems to me that the market had made up its mind to be bullish a while ago and this was just the excuse it needed to go nuts again. You wonder what would have happened if the rate hike was 0.5% - My  is that the market would have gone up regardless of what the Fed did - it's just the "vibe" of the thing, man.

Now that the doom and gloom merchants have been silenced and the permabull mindset is being restored...the next bear party will come sooner than expected, probably as soon as all those that bought at the last top and sold at the last bottom re-enter the market.


----------



## bullmarket

Well....looks like our market is seeing out this financial year with a BAAAAAAAAAaaaaaaaaannnnnnnnggggggggggg.......................... 

This financial year has been a good one   so let's hope (and pray    ) next year is just as good  .....but I'm not convinced yet that it will be  : 

Happy New Year and cheers everyone..........

bullmarket


----------



## noirua

With every stock, except Telstra, in negative territory on the ASX 50 this morning, the gloom is returning.


----------



## Sean K

More buying opportunities arrise.


----------



## Realist

My shares look decidedly red today.


----------



## Kipp

noirua said:
			
		

> With every stock, except Telstra, in negative territory on the ASX 50 this morning, the gloom is returning.



I never thought I'd see the day where TLS outperformed the market....


----------



## wavepicker

Kipp said:
			
		

> I never thought I'd see the day where TLS outperformed the market....





I did, 2 months ago., at the height of the commodities boom,
that's why I bought it. Although if the broader market goes into a bear trend I don't expect it outperform, but rather base and struggle up until better time return for the market as a whole. 

As a wise man once said, always buy the companies that no one else wants!!!


----------



## blinkybill

I still reckon our market's XJO will stay in the approx 4800 to 5000 range for a while yet and I don't think the US DJIA will break out of its trading range anytime soon either.

I'm changing ip address next week and I'm getting tired of this nic so I will change to another one as well 

They say a change is as good as a holiday...don't they?


----------



## 3 veiws of a secret

If I was a pathological liar ,would you beleive that my shares  had a sensational day on the market.  :swear:


----------



## mit

WIth the DOW virtually flat overnight it will be interesting to see what today will bring in the Aussie market. The XJO has a floor of 4900 at the moment I wonder if it will hold today.

MIT


----------



## michael_selway

mit said:
			
		

> WIth the DOW virtually flat overnight it will be interesting to see what today will bring in the Aussie market. The XJO has a floor of 4900 at the moment I wonder if it will hold today.
> 
> MIT




amazing, it turned out to be exactly opposite to what you said for the All Ords   

thx

MS


----------



## Freeballinginawetsuit

Stockmarket Crashing! a few obsevations anyone else agree?

Many analysts are saying that the materials boom has gone to far and they are only expecting single digit growth this year. They said this last december after the exceptional growth in 2005.They said that the year before as well!. What happened it boomed again until the May spike. It is self evident that traders woud take their profitts at this point and what profits they were. I have no doubt new highs in materials will be reached and purhasing stocks now at the end of the correction is sound.

I only trade in the material sector and my reason for this is simple.
History, Japan boomed in the late sixties. BHP AND RIO set up thier Hematite ore bodies in WA and we bought the Japanese cars and electronics.

We are know buying Chinese electronics and will soon buy thier cars. 1.5 billion Chinese are having washing machines, steel framed buildings using energy etc. It is ridiculous to think that this will end after 3 years and the resource sector is over extended. I firmly believe it is just the start with the Chinese investing in our Mangenite ore deposits and securing there supply's, BHP and RIO have the Hematite locked up.

I consider the last 3 months a correction that has extended with the various hypes around. We have already seen the lows and upward we will soon go, or the rest of the Chinese without washing machines will invade and get the ore themselves.

Take ZFX, they have no debt (holding bulk cash), have invested in exploration, Zinc reserves are at alltime lows and the Zinc price is on the way up. They will go past $13.00 again, as sure as Chinese cars will be on the OZ market in 4 years. History repeats itself and this time its China, not Japan with a billion more customers to boot.

Too all the pesimits take note that after every Stockmarket crash, THE INDICES HAVE REACHED ALL TIME HIGHS! (dot com excluded as that was a bubble sure to burst).

Happy trading and stick with the materials sector, I will be


----------



## noirua

A fall by the Dow Industrial of over 200 points today raises the crash question once again.


----------



## nirama

Do not be a sheep............HOLD HOLD HOLD

All is well....


----------



## wayneL

nirama said:
			
		

> Do not be a sheep............HOLD HOLD HOLD



All is well....


----------



## Broadway

Every time australia has a bad day, the rest of the world just crumbles apart. I swear we are the centre of the financial universe lately!


----------



## petervan

For such a so called stockmarket crash commodities are holding up remarkably well.Me thinks a reource bounce after this correction.I live in hope..


----------



## wayneL

Broadway said:
			
		

> Every time australia has a bad day, the rest of the world just crumbles apart. I swear we are the centre of the financial universe lately!



The Yen is the centre of the financial universe ATM. OZ is in the same time zone so it appears we are leading. 

The Yen is leading. (in inverse relationship of course... yen up, SM down)


----------



## Uncle Festivus

petervan said:
			
		

> For such a so called stockmarket crash commodities are holding up remarkably well.Me thinks a reource bounce after this correction.I live in hope..




I think this one is the real deal comrades. This is the real correction. All the fence sitters not knowing what to do or hoping for the rebound are going to cut their losses or take their profits. History shows you don't get 2 bites at the apple. 

Could be the first chink in the superannuation armour too. Be prepared for switches out of super into cash, forcing redemptions in the equity market.

The reports still to come out of the US this week will confirm the severity of this crash.

Market controls will be put into action (tick- already happening)

Banks have been signaling this correction for a few days now & will probably  lead the crash.


----------



## Sean K

Uncle Festivus said:
			
		

> I think this one is the real deal comrades. This is the real correction. All the fence sitters not knowing what to do or hoping for the rebound are going to cut their losses or take their profits. History shows you don't get 2 bites at the apple.
> 
> Could be the first chink in the superannuation armour too. Be prepared for switches out of super into cash, forcing redemptions in the equity market.
> 
> The reports still to come out of the US this week will confirm the severity of this crash.
> 
> Market controls will be put into action (tick- already happening)
> 
> Banks have been signaling this correction for a few days now & will probably  lead the crash.



I don't think so. This is part of the 'healthy correction we had to have'. Going back to 5400 ish is not a 'crash' it's just a pause IMO. A crash is 30% Uncle F. That would take us back to 4200. Not sure about that one.


----------



## nizar

kennas said:
			
		

> I don't think so. This is part of the 'healthy correction we had to have'. Going back to 5400 ish is not a 'crash' it's just a pause IMO. A crash is 30% Uncle F. That would take us back to 4200. Not sure about that one.




Agree with Kennas.
We will find support at the 200dma, just like in mar05, oct05, may06.
No dramas.


----------



## Uncle Festivus

That's a pretty strong faith in a set of lines on a chart.

I'm not sure TA is going to be much help here. The fundamentals are changing. If you look deeper into the 'system' there are deep seated imbalances that a 'correction' is not going to correct. It's all about paying for risk, and the risk of the past years that has been discounted by easy liquidity is now having to be paid for, only now because of derivitiives and margin the risk is many more times the ability to pay for it. 

It's a simple case of dominoes, once the first starts to fall the rest follow, willing or not.

Are you going to wait to see if your TA figures don't hold for a resumption of the bull?. Unless you have covered your long positions, you are exposing your bare ars* to the whim of the market if you get it wrong. 

Just be prepared if it's not the same as 'normal' corrections, but a secular change in sentiment.


----------



## noirua

The fall in the USA is all about defaults and likely defaults in the property sector. This may, by the end of 2007, turn out to be a good thing for the Industrial Sector and bread-and-butter stocks, because interest rates will be reduced in the USA more quickly.

Watch Bernanke panic and lower rates to restore confidence. 

The Aussie sector, the property market, has some parallels with the US and hopefully we will see rates in Australia down by 1% or so by the end of the year. 

I agree with Uncle Festivus on the need to be in cash and the likely flight to cash.


----------



## CanOz

Uncle Festivus said:
			
		

> That's a pretty strong faith in a set of lines on a chart.
> 
> I'm not sure TA is going to be much help here. The fundamentals are changing. If you look deeper into the 'system' there are deep seated imbalances that a 'correction' is not going to correct. It's all about paying for risk, and the risk of the past years that has been discounted by easy liquidity is now having to be paid for, only now because of derivitiives and margin the risk is many more times the ability to pay for it.
> 
> It's a simple case of dominoes, once the first starts to fall the rest follow, willing or not.
> 
> Are you going to wait to see if your TA figures don't hold for a resumption of the bull?. Unless you have covered your long positions, you are exposing your bare ars* to the whim of the market if you get it wrong.
> 
> Just be prepared if it's not the same as 'normal' corrections, but a secular change in sentiment.




I agree with your bearish sentiment, but even bear markets have waves up. Thats what these guys are saying, there will be another bounce.

Its uncanny how the EWers have picked this, some are right on the point.

I'm very impressed.

Cheers,


----------



## nizar

Bernanke lowers rates ---> US dollar crashes ---> Gold rockets ---> Maybe gold the place to be?


----------



## CanOz

nizar said:
			
		

> Bernanke lowers rates ---> US dollar crashes ---> Gold rockets ---> Maybe gold the place to be?




Watch gold taking a hammering short term as more carry trades unwind. Love to be trading futures right now. Agree though that it should come back as a flight to safety.

You shorting anything Nizar?

Cheers,


----------



## nizar

CanOz said:
			
		

> Watch gold taking a hammering short term as more carry trades unwind. Love to be trading futures right now. Agree though that it should come back as a flight to safety.
> 
> You shorting anything Nizar?
> 
> Cheers,





No but im being really tempted by CFD Indices.
Been kinda paper trading it for a while now and maybe its time 4 me to go to the next level.


----------



## CanOz

nizar said:
			
		

> No but im being really tempted by CFD Indices.
> Been kinda paper trading it for a while now and maybe its time 4 me to go to the next level.




Hmmm, wish i had the time to do that....this next wave down, it should be more complex?

Cheers,


----------



## the barry

Broadway said:
			
		

> Every time australia has a bad day, the rest of the world just crumbles apart. I swear we are the centre of the financial universe lately!




That is so far from the truth it isn't funny. Every correction we have had of late is in response to a correction os.


----------



## Mousie

You guys realise something?

Was expecting Comsec to be down intermittently at least, but nothing of that sort happened. 

Don't think they'll be that efficient to upgrade the system in just a few days given what happened beginning of March, so it can only mean fewer people are selling this time, and you know what that means...


----------



## mrWoodo

Mousie said:
			
		

> Don't think they'll be that efficient to upgrade the system in just a few days given what happened beginning of March, so it can only mean fewer people are selling this time, and you know what that means...




  Was thinking exactly the same thing this morning on NAB Online. Having said that tho, technically if their system is built right, it's a simple matter of adding more web/app/database servers to their 'farm' to take the load.


----------



## Kauri

Mousie said:
			
		

> You guys realise something?
> 
> Was expecting Comsec to be down intermittently at least, but nothing of that sort happened.
> 
> Don't think they'll be that efficient to upgrade the system in just a few days given what happened beginning of March,* so it can only mean fewer people are selling this time, and you know what that means... *




   The first hour of trading... note yesterdays XJO total vol was 583,000,000... so we did 33% of that in 1 hour.


----------



## Atomic5

Are we seeing 2 dead cat bounces???!? You normally only get one before the market capitulates ???

The Nikkei is currently down 500 points, and tommorrow General Motors release their $data regarding their exposure to the subprimes. They are supposedly down US$1bn there. 



Just MHO - Please DYOR


----------



## Sean K

Atomic5 said:
			
		

> Are we seeing 2 dead cat bounces???!? You normally only get one before the market capitulates ???



2 dead cats?? What do you mean? We've had the bounce to 6850 ish. Now it's going down....


----------



## noirua

No need to worry, the ASX 200 is only due for a fall to the 5,000 to 5,200 range...


----------



## Atomic5

kennas said:
			
		

> 2 dead cats?? What do you mean? We've had the bounce to 6850 ish. Now it's going down....




None of the small cap stocks that I am watching are selling off. They dipped just after open and then regained and are holding.

Nikkei went to almost -500 just after open and the ASX didnt blink. 
Hang Seng in 15 minutes. ?

My point is that there is usually only 1 dead cat bounce, but I'm getting the feeling we're going to see a lot of dead cats before any Chinese rates rise really kills this.   

Just MHO   - Please DYOR


----------



## noirua

Australian Consumer Confidence rose to a 19 Month High, reported on Bloomberg.


----------



## Kauri

Atomic5 said:
			
		

> None of the small cap stocks that I am watching are selling off. They dipped just after open and then regained and are holding.




  Maybe a lot of the recent perma-bull punters are ignoring the drop, reasoning that it has just dropped and recovered once already, also having possibly bought/topped up at *bargain prices*. If we have another day or three going south..... the crowd may move???


----------



## noirua

Hang Seng down 2.86%, ASX 200 down 2.00% and Nikkei down 2.98%


----------



## nomore4s

Kauri said:
			
		

> Maybe a lot of the recent perma-bull punters are ignoring the drop, reasoning that it has just dropped and recovered once already, also having possibly bought/topped up at *bargain prices*. If we have another day or three going south..... the crowd may move???




I think maybe alot of people are more prepared for this drop (ABC correction), has been on the cards for awhile.


----------



## Atomic5

noirua said:
			
		

> Australian Consumer Confidence rose to a 19 Month High, reported on Bloomberg.




I don't doubt it. Comes from living on an island maybe. No-one else feels this brave right now.    

Can't see Australia floating through this alone long-term though.

Just my   humble opinion


Edit: just saw it on Bloomberg; high confidence, low inflation, investors coming back to the real estate market, and they expect rain!


----------



## professor_frink

Atomic5 said:
			
		

> None of the small cap stocks that I am watching are selling off. They dipped just after open and then regained and are holding.
> 
> *Nikkei went to almost -500 just after open and the ASX didnt blink.
> Hang Seng in 15 minutes. ?
> *
> My point is that there is usually only 1 dead cat bounce, but I'm getting the feeling we're going to see a lot of dead cats before any Chinese rates rise really kills this.
> 
> Just MHO   - Please DYOR



The opening gap on the nikkei rarely has an impact on our market-it was obviously going to gap down this morning, no surprises there. However, when the nikkei turns intraday, we've been following of recent times. It was pointed out in the spi thread recently. This morning was no exception- the nikkei futs found resistance at 16775, then started heading lower, 10 minutes later, the spi went south with it, and lost 25 pts.


----------



## noirua

Another sea of red.
Markets are generally gloomy across the board. The London FTSE closed at a low point down 2.6%, down 160.5 points, and the Dow followed the same path, down 92.29. 
Difficult to give an ASX 200 forecast as the Dow closes in about 4 hours. 

Major Mining stocks fell 4% to 7% as the sector turned decidedly bearish. Financial stocks fell heavily in Europe as markets turned bearish towards the close after an early recovery.


----------



## nirama

what rubbish are you talking about

at close of trade DOW Jones up 57 points......!!!!

The screen could be GREEN today.....

good luck to all...


----------



## Rob_ee

nirama said:
			
		

> what rubbish are you talking about
> 
> at close of trade DOW Jones up 57 points......!!!!
> 
> The screen could be GREEN today.....
> 
> good luck to all...




Don't blame noirua to much
A wild 200 pt swing from its lows ... seems like someone is playing with the markets over there... never can tell what the yanks will do from day to day.

It seems that all the factors that caused the 250 drop yesterday have been fixed overnight and its bussines as usual.

Watch and learn   

Rob


----------

