# How Far Will The Market Fall?



## IFocus (10 March 2020)

I know there are many members that have seen this type of market before so worth a thread on thoughts on where to from here and why.

This is of course accepting no one knows what will happen next just like any other day in the markets and probability becomes a problem in such volatile conditions.

But lets not stop that from us speculating after all isn't that what we are all here for to accept risk and speculate.

My own thoughts on the current market are this is just the 1st leg down bringing out value investors and a bit of FOMO, 2nd leg normally brings doubt and a bit of disbelief 3rd or 4th leg down brings capitulation which is a buy signal. 

Note nothing wrong with buying now its a market each position has a different reason behind it.

Whats a measurement that can be applied to the unknown?

Markets are meant to look out many months or more so besides uncertainty whats this one pricing in?

A couple of obvious issues come to mind

Recession usually 15 to 20% fall
Supply / demand shock 5 to 15%
Confidance 10%
Delays to recovery (virus lock downs) 10%
Secondary shocks 10% (unknown at this stage)

Arbitrary numbers and most would merge together, I don't have a number yet as its only the 1st leg *if* there is a 2nd leg then the target will become a little clearer.

Interested in others thoughts particularly contra


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## UMike (10 March 2020)

This is possibly the most emotive and (irrational) fear based set of circumstances I have ever seen.

Find a vaccine and it is over tomorrow.
Until then sensible precautions and outright panic are going to do real damage to industry and economies.


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## sptrawler (10 March 2020)

I agree with most of what you say below IFocus, but I think there will be a much more dramatic effect on mining this time, as opposed to the GFC which was more financial sector focused.
With regard when to buy in that will be on everyones mind, it depends how cashed up one is and the time frame one is working on. Also whether one is a trader or a sit and hold, there is a lot of opportunities to dollar cost average, for the sit and holds.
As an elderly mate said on the phone today, thank god for franking credits, funny thing is he was against them before the election.
His situation has gone from sunshine and lollypops, to seeing his nest egg decimated.
I think we are near the bottom, if not the bottom, not far off. There is no other game in Town, people have to invest somewhere.
Be selective, no penny dreadfulls IMO.


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## peter2 (10 March 2020)

I'm contra; in that we've already hit the bottom. The ASX is up >10% overnight. I wouldn't expect much more. I think we may test the recent low as the virus spreads throughout the US. The March qtr results will outline the economic cost and growth will stagnate for a another qtr, possibly taking us into a technical recession. In 3 - 4 mths time the sentiment will change and be more positive as the virus numbers decline. Newspaper headlines may actually be positive for a change. I'll be buying all the reversal setups. Life goes on, while the idiots out there will wonder what to do with all their toilet paper.


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## Dona Ferentes (10 March 2020)

where was that graph of _market peak GFC _and _recent peak sell-off_? I think it was reddit?

updated version would be good


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## macca (10 March 2020)

I was expecting 6384 XAO to hold and bounce, dead cat ?

If closes down through there for 2 days then 5875 comes into play


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## basilio (10 March 2020)

As far as I can see  the economic consequences  of the corona virus have yet to be recognised. There is lots of noise and China has certainly had a crashing stop to its industrial production.

But where are the figures ?  What have been the production and sales losses in China.? How has that impacted  businesses, families, tax systems ? How is the banking system holding up ? What is keeping it afloat ?

Now across Italy, Sth Korea Japan Europe wherever we are seeing the knock on effects of reduced travel and tourism, breakdowns in supply chains, mass closure of public events, cancellation of conferances, concerts, sporting events. Collapse of many hospitality industries. Again how will this  manifest itself in employment, sales targets, paying rent and paying  loans?

Unfortuately I can't see any clear light until the virus has played itself out. I think the next few months should be basically survival mode around the world and doing what has to be done to save the house. 

We may well have to burn a lot furniture on the way The figures on a stock exchange should be rather irrelevant IMV.


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## IFocus (10 March 2020)

peter2 said:


> I'm contra; in that we've already hit the bottom. The ASX is up >10% overnight. I wouldn't expect much more. I think we may test the recent low as the virus spreads throughout the US. The March qtr results will outline the economic cost and growth will stagnate for a another qtr, possibly taking us into a technical recession. In 3 - 4 mths time the sentiment will change and be more positive as the virus numbers decline. Newspaper headlines may actually be positive for a change. I'll be buying all the reversal setups. Life goes on, while the idiots out there will wonder what to do with all their toilet paper.




Thanks Peter hope you are right


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## qldfrog (10 March 2020)

IFocus said:


> Thanks Peter hope you are right



So do I : I think you are wrong but I hope you are right
I find the crowd on ASF quite optimistic considering it is biased toward an age group likely to see substantial losses..and I am not talking $ or portfolio....


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## CBerg (10 March 2020)

basilio said:


> As far as I can see  the economic consequences  of the corona virus have yet to be recognised. There is lots of noise and China has certainly had a crashing stop to its industrial production.
> 
> But where are the figures ?  What have been the production and sales losses in China.? How has that impacted  businesses, families, tax systems ? How is the banking system holding up ? What is keeping it afloat ?
> 
> ...



I believe you are being very, very negative basilio. It's echo chamber at the moment. You should take a walk, read a good book.

Take these numbers with a grain of salt because it's the Chinese but I would rather not bet against a political system which has the will power to make 5, 10, 15 year plans and try to execute said plans.
http://www.stats.gov.cn/english/PressRelease/202003/t20200302_1729254.html
_"Affected by novel coronavirus pneumonia in February 2020, the Purchasing Managers Index (PMI) of China has dropped significantly. But with the overall promotion of epidemic prevention and control and economic and social development by the CPC Central Committee and State Council, the recovery rate of enterprises was picking up rapidly, and production and operation activities were recovering in an orderly manner. *As of February 25, 78.9 percent of the enterprises surveyed by purchasing managers in China had returned to work, of which 85.6 percent were large and medium-sized manufacturing enterprises.*"_
For over 2 weeks now China has been returning to work & ramping up their economy back to steady state. Februaries numbers are bad but we knew that. March doesn't have a write off if people don't want it to be. The economy will tick over provided people don't turn negative just shut them selves off. Most people aren't which is a good thing so far. I've got a NRL game to go to on Friday, I sure as hell will be f*cked right off royally if they cancel at this point.

As far as health systems go, the smart option at this point is to stop the pretence that it will stop spreading if people lock themselves up & deal with the fact it's already here & spread further than news/social media fathom.


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## wayneL (10 March 2020)

I think Peter is right, for now, but wrong longer term. The flood of fiat will prop it up, but other economic shoes to drop will take it out at some stage.

I give it a few months.


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## sptrawler (10 March 2020)

qldfrog said:


> So do I : I think you are wrong but I hope you are right
> I find the crowd on ASF quite optimistic considering it is biased toward an age group likely to see substantial losses..and I am not talking $ or portfolio....



That is a different issue, we are talking the market, not the collateral damage.


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## CBerg (10 March 2020)

sptrawler said:


> I agree with most of what you say below IFocus, but I think there will be a much more dramatic effect on mining this time, as opposed to the GFC which was more financial sector focused.
> With regard when to buy in that will be on everyones mind, it depends how cashed up one is and the time frame one is working on. Also whether one is a trader or a sit and hold, there is a lot of opportunities to dollar cost average, for the sit and holds.
> As an elderly mate said on the phone today, thank god for franking credits, funny thing is he was against them before the election.
> His situation has gone from sunshine and lollypops, to seeing his nest egg decimated.
> ...



I think it will be materials again that saves the day for Australia again. I cannot see a situation where even in 12 months time there isn't more people joining the middle class in China, India & Africa. The last 2 will only grow their consumption more dramatically as time plods along.

I don't have the numbers on this handy but I believe almost all commodities are being used at a greater rate than ever before, demand won't stop suddenly either as more people get lifted from poverty into better situations.


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## InsvestoBoy (10 March 2020)

I dunno how far the market will fall, but I think it could fall up to 50-60% from the high without me feeling very surprised.

Global equity indices tend to move together, especially as passive investing grows, even if not in perfect correlation due to sector breakdown of the indices and currency fluctuations.

Globally, valuations are lofty, even after this little speedbump we've had.

If there are to be further rises, it will come from expansion of valuations as it doesn't seem like there are indicators of strong economic growth on the horizon. Call it stimulus or whatever you like.

Valuation expansion is really just another way of saying an expansion of market implied growth in the future to "justify" those lofty valuations.

So if the bond market/Eurodollar market/commodity market/inflation markets are all pricing in these poor fundamental scenarios at the coalface of where finance meets reality, 

either those markets are wrong and "market implied growth" is right, or stocks are going to feel pain as the numbers come out showing their earnings are slowing, profit margins contracting, etc.

If valuations globally start to reset lower, I doubt the ASX will be spared. Hence, no surprise at a 50-60% drop.

That is all to judge, without even thinking about coronavirus.


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## IFocus (10 March 2020)

CBerg said:


> I believe you are being very, very negative basilio. It's echo chamber at the moment. You should take a walk, read a good book.
> 
> Take these numbers with a grain of salt because it's the Chinese but I would rather not bet against a political system which has the will power to make 5, 10, 15 year plans and try to execute said plans.
> http://www.stats.gov.cn/english/PressRelease/202003/t20200302_1729254.html
> ...




Pollution levels don't show that yet not to say the numbers are wrong





https://www.cnbc.com/2020/03/02/nas...tion-decreased-amid-coronavirus-measures.html

edit tried to post BBC link but wouldn't let me try the above haven't read the article


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## sptrawler (10 March 2020)

CBerg said:


> I think it will be materials again that saves the day for Australia again. I cannot see a situation where even in 12 months time there isn't more people joining the middle class in China, India & Africa. The last 2 will only grow their consumption more dramatically as time plods along.
> 
> I don't have the numbers on this handy but I believe almost all commodities are being used at a greater rate than ever before, demand won't stop suddenly either as more people get lifted from poverty into better situations.



I agree with that, what I was referring to was in the next 6-12 months, which refers to this current correction.
I am expecting a slowdown in manufacturing and demand, due to the virus fallout, which i think will lead to glut in materials.
When things return to normal, it will be business as usual, as you say.
There is no way that China and India are not going to keep industrialising, which in turn will increase their affluence and consumption.
As I said, I was more talking about the current market correction only.


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## Garpal Gumnut (10 March 2020)

I believe we are looking at a drop to 4000 on the XAO.

Look at the length of the ranges over the last 6 weeks.

And nobody I know has a sniffle yet, China as @IFocus notes is moribund and the world has no strong leadership outside of China.

My bet is that the XAO will shilly shally between 5- 6000 for a while, then drop to 5000 for a lesser time and the fall through that and 4000 to stabilise below there.

A monthly chart below over 10 years.

gg


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## CBerg (10 March 2020)

IFocus said:


> Pollution levels don't show that yet not to say the numbers are wrong
> 
> 
> 
> ...



Look I definitely think a big grain of salt is warranted with taking the figures of the Chinese government, no question there. Your picture is at this point 15 days outdated too however. I would expect activity is still only _returning_ to normal but I would not think it's far from normal either at this point.


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## InsvestoBoy (10 March 2020)

peter2 said:


> I'm contra; in that we've already hit the bottom. The ASX is up >10% overnight. I wouldn't expect much more. I think we may test the recent low as the virus spreads throughout the US. The March qtr results will outline the economic cost and growth will stagnate for a another qtr, possibly taking us into a technical recession. In 3 - 4 mths time the sentiment will change and be more positive as the virus numbers decline. Newspaper headlines may actually be positive for a change. I'll be buying all the reversal setups. Life goes on, while the idiots out there will wonder what to do with all their toilet paper.




Sorry I am confused by this post can you clarify?

Are you saying we hit the low, but you think there will be a re-test followed by new highs?


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## sptrawler (10 March 2020)

Garpal Gumnut said:


> I believe we are looking at a drop to 4000 on the XAO.
> 
> Look at the length of the ranges over the last 6 weeks.
> 
> ...



I can't wait to see the chart and the lines that explain that one GG.


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## InsvestoBoy (10 March 2020)

sptrawler said:


> I can't wait to see the chart and the lines that explain that one GG.




Using the co-ordinates of the peak=>trough and high of todays retracement (7202, 5350, 6037) as inputs to a Fibonacci extension gets you 4582 as the 0.786 extension and 4185 as the 1.0 extension.

A bit hard to see because I had to zoom the chart quite a bit out to show the extensions while the coordinates are all within a short timeframe.




Not that I am necessarily agreeing with the forecast, just showing some lines and numbers. Think of them as potential stopping points of the C move in an A-B-C pattern where the A and B moves have completed.


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## Garpal Gumnut (10 March 2020)

sptrawler said:


> I can't wait to see the chart and the lines that explain that one GG.



Too many charts open.!!

I will reply tomorrow eve with a better eye.

btw The BBC are tipping Korea Air is going bust.

https://www.bbc.com/news/business-51799142

Avoid QAN as it is a very sharp knife in this fall.

gg


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## sptrawler (10 March 2020)

Garpal Gumnut said:


> Too many charts open.!!
> 
> I will reply tomorrow eve with a better eye.
> 
> ...



On the subject of airlines I wonder how Cathay Pacific is managing, having their hub in Hong Kong must be problematic.


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## Garpal Gumnut (10 March 2020)

sptrawler said:


> On the subject of airlines I wonder how Cathay Pacific is managing, having their hub in Hong Kong must be problematic.



Cathay would be suffering.

Virgin must be quaking as their major shareholders are Chinese and their planes in my experience were not as full as Qantas even before the corona virus. 

gg


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## qldfrog (10 March 2020)

CBerg said:


> I think it will be materials again that saves the day for Australia again. I cannot see a situation where even in 12 months time there isn't more people joining the middle class in China, India & Africa. The last 2 will only grow their consumption more dramatically as time plods along.
> 
> I don't have the numbers on this handy but I believe almost all commodities are being used at a greater rate than ever before, demand won't stop suddenly either as more people get lifted from poverty into better situations.



True long term but we could have a couple years of carnage, takeover by sovereign funds, even sabre rattling..
20% fall is just back last year level


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## IFocus (10 March 2020)

CBerg said:


> Look I definitely think a big grain of salt is warranted with taking the figures of the Chinese government, no question there. Your picture is at this point 15 days outdated too however. I would expect activity is still only _returning_ to normal but I would not think it's far from normal either at this point.





Yes hopefully there is a lag and 15 days make a difference anecdotally its been said that local officials are cooking the books still who to believe also estimates of 40 to 50% of migrant workers have still not returned to work.


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## peter2 (10 March 2020)

One of many possibilities. This classic will give us a "U" reversal.


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## sptrawler (10 March 2020)

Great graphic representation peter, that is the way I think it will play out, but it is anyones guess nothing seems to go to plan.


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## So_Cynical (11 March 2020)

Garpal Gumnut said:


> btw The BBC are tipping Korea Air is going bust.




2 or 3 of them have to go under, Virgin must be very vulnerable, Air Asia? all the non govt airlines must be super sus.


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## aus_trader (11 March 2020)

So_Cynical said:


> 2 or 3 of them have to go under, Virgin must be very vulnerable, Air Asia? all the non govt airlines must be super sus.




I think most will be saved. The savior came out just-in-time from above that may save the airlines. Actually came out from Saudi/Russia deal-break:




Cheapest Jet Fuel costs in decades !

You/we'll all get to see $1 or lower petrol at the pump soon... not seen in decades 

I think the Korean case was a extreme thin margin, heavily indebted business that was treading on thin ice before the Corona hit 

Then again I hope there aren't other airlines with similar situations as the virus spreads around the world  So not suggesting to go out and buy the airlines right now as GG said, but I think they'll survive after the fallout.


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## kid hustlr (11 March 2020)

I think short term we have bottomed, that looked climactic yesterday. Longer term I feel we've gone half way but the Longer term view can change over time.

Surprises how many apparent perms bulls there on this forum in general (not saying you are wrong)


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## kid hustlr (11 March 2020)

kid hustlr said:


> I think short term we have bottomed, that looked climactic yesterday. Longer term I feel we've gone half way but the Longer term view can change over time.
> 
> Surprises how many apparent perms bulls there on this forum in general (not saying you are wrong)




Just to add a technical lense, the price action of cba and csl yesterday was incredible and further support my views of a short term low.

Technically long term on the s&p you could argue we can go all the way back 1600, that to me is my worst case scenario, not my base case at this point but definitely feasible.


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## Garpal Gumnut (11 March 2020)

peter2 said:


> One of many possibilities. This classic will give us a "U" reversal.
> 
> View attachment 101190



Thanks @peter2

I will refresh my rusty knowledge of Wyckoff now that I have seen your post.

A very, very good reminder.

gg


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## Logique (11 March 2020)

Don't know how far it will fall.
I do think that following a period of high volatility and uncertainty, traders will be wary of potential bull traps, and look for a classical reversal pattern, of which there are different varieties,
 e.g. https://www.babypips.com/learn/forex/how-to-trade-chart-patterns


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## hja (11 March 2020)

peter2 said:


> One of many possibilities. This classic will give us a "U" reversal.
> 
> View attachment 101190



Hi Peter
Are you calling yesterday's rally of the XAO the AR? It's hard to see it on the daily! You'd want to see it clear the previous bar (9/3) on lighter volume according to Wyckoff


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## moXJO (11 March 2020)

kid hustlr said:


> I think short term we have bottomed, that looked climactic yesterday. Longer term I feel we've gone half way but the Longer term view can change over time.
> 
> Surprises how many apparent perms bulls there on this forum in general (not saying you are wrong)



I'm bearish/bullish on the size of stimulus.
So we may whipsaw a bit till money actually filters through. If US, China and Australia all start pumping dough, then it will be off again. 
So stimulus response is the first hurdle.

We then have this virus.
Probably a year and a bit till we see vaccinations. So the government needs to show a very capable hand, or confidence will drop and fear will reign.
 Unfortunately China and US responses will also need to be watched. US has virus and elections. If Bernie wins nominations then kiss the market goodbye.
China just needs someone to sell to and we should be good if we kiss ass.

I also worry about Aus economy. Stimulus will kick the can down the road a bit.

These kinds of markets always test people's mettle. Were your emotions in check when everyone else was losing it. Did the fear take over when the market slipped. 
"Buy when there is blood on the streets" always stuck in my brain. Get out when you hear "sky is the limit".

If talking lows on another run down. I'd  pick 5000 xjo(sorry always trade the xjo not xao) I'm always off about 200 points so 4800.


I'm a guesstimator and a gambler, the worse kind of trader(If you could call me that) though.


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## jbocker (11 March 2020)

peter2 said:


> ... Life goes on, while the idiots out there will wonder what to do with all their toilet paper



I think these people are justified in hording large amounts, they are obviously proven to be huge ar$eholes!


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## Dona Ferentes (11 March 2020)

moXJO said:


> I'm a guesstimator and a gambler, the worse kind of trader(If you could call me that) though.



it's better to be roughly right than exactly wrong.


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## aus_trader (11 March 2020)

jbocker said:


> I think these people are justified in hording large amounts, they are obviously proven to be huge ar$eholes!




Love the comment, yes everyone suffers as these few hoarders have it all for themselves.


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## Smurf1976 (11 March 2020)

kid hustlr said:


> I think short term we have bottomed, that looked climactic yesterday. Longer term I feel we've gone half way but the Longer term view can change over time.




When you say short term or long term, what sort of time frame do you have in mind?

Days? Weeks? Months?

I’m not disagreeing, just trying to understand.


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## Garpal Gumnut (11 March 2020)

Logique said:


> Don't know how far it will fall.
> I do think that following a period of high volatility and uncertainty, traders will be wary of potential bull traps, and look for a classical reversal pattern, of which there are different varieties,
> e.g. https://www.babypips.com/learn/forex/how-to-trade-chart-patterns
> View attachment 101192



Good post from a Pompey lad. 

gg


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## Sdajii (11 March 2020)

A lot further to fall yet. It's just starting up, early days. Impossible to say how far, but a lot further than this.


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## Dona Ferentes (11 March 2020)

solid action today. keep this up and its got 30 days


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## J1eyed (11 March 2020)

I'm interested to understand why people don't see this playing out like the GFC?

Back in Nov 2007, the XJO was at 6874, interest rates were 6.75%, government debt was $58m, and household debt was approximately $109m. The AUDUSD was 97c. By the time the GFC was over (14 - 15 months) the XJO had fallen to 3120, interest rates were 3.4%, and the AUDUSD had dropped to around 60c

Now in Feb 2020, the XJO was at 7197, interest rates were 0.75%, government debt is 10x $541m, household debt is 20% higher $120m, and the AUDUSD is already at 65c. We can't lower interest rates like in the GFC, the AUDUSD is already at record lows, and China isn't growing near as much as it was back in 2007.

I can't see how this doesn't end up much much worse than 2007/09.


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## InsvestoBoy (11 March 2020)

J1eyed said:


> I'm interested to understand why people don't see this playing out like the GFC?




People are saying one (or more) of:
1. Stimulus is coming, i.e. print money, which devalues the AUD and makes stocks worth more (nominally).
2. Stocks will go up because they "always" went up.
3. Crisis and therefore risk premium will subside so we will revert to highs not to lows.

Not that I agree or disagree, just providing you a summary for your understanding.


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## aus_trader (11 March 2020)

J1eyed said:


> Now in Feb 2020, the XJO was at 7197, interest rates were 0.75%, government debt is 10x $541m, household debt is 20% higher $120m, and the AUDUSD is already at 65c. We can't lower interest rates like in the GFC, the AUDUSD is already at record lows, and China isn't growing near as much as it was back in 2007.




Yes, one big advantage we had prior to GFC was that the Interest Rates lever had a lot of gears to move down and China was going at full pace supporting higher and higher Aussie Iron Ore and other commodity prices.

It is a little worrying what you said, as Interest Rate lever is pulled to almost Neutral which means only the -ve gear is left to shift into and China seems to be experiencing a slow down


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## kid hustlr (11 March 2020)

Smurf1976 said:


> When you say short term or long term, what sort of time frame do you have in mind?
> 
> Days? Weeks? Months?
> 
> I’m not disagreeing, just trying to understand.




Honestly if you'd asked me 24 hours ago I would have said the low in CBA and CSL might not get breached but then cba lost 6% today lol. I'll revise the short term comment to 'days to weeks'

We should change this thread to 'why do people think buying 10 year + bonds at negative real rates is a good idea'


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## Dona Ferentes (11 March 2020)

J1eyed said:


> ... and China isn't growing near as much as it was back in 2007.



was growing at 8% a year 12 years ago. And did for a decade. Now, let's say its growing at 6, or 4, or whatever. In absolute terms, more than happy to sell iron ore to them now.


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## CBerg (11 March 2020)

J1eyed said:


> I'm interested to understand why people don't see this playing out like the GFC?
> 
> Back in Nov 2007, the XJO was at 6874, interest rates were 6.75%, government debt was $58m, and household debt was approximately $109m. The AUDUSD was 97c. By the time the GFC was over (14 - 15 months) the XJO had fallen to 3120, interest rates were 3.4%, and the AUDUSD had dropped to around 60c
> 
> ...



I really get the feeling since the GFC(which was a pretty uncommon event, big 50-60% declines don't happen that often in peoples lifetimes) people have just been waiting for the proverbial other shoe to drop so to speak.

I have a question then if this is going to be like the GFC, 50-60% decline and a couple(or more you choose) of years to recover. Do you plan to take advantage of it? When & how exactly do you plan to do that? This being an investment forum and all.

I don't profess to know what will happen but I know that at the end of January when I made multiple sizeable purchases I liked the prices then. I bought more again last week at lower prices. I plan on averaging down the whole way if prices keep dropping.


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## Smurf1976 (11 March 2020)

kid hustlr said:


> Honestly if you'd asked me 24 hours ago I would have said the low in CBA and CSL might not get breached but then cba lost 6% today lol. I'll revise the short term comment to 'days to weeks'




I'm thinking that we'll get a second "shock" when one of three things happens (in random order):

1. There's a collective realisation that in the service sector most of what is being lost in terms of activity is being lost outright, it is not in practice simply being postponed. 

People who aren't eating at restaurants, aren't taking holidays, aren't going to concerts or whatever. Some of that will be rescheduled but a lot is gone for good. Nobody's going to go to a restaurant and order 5 meals because they didn't go there the previous 4 weeks. With personal finances taking a hit they're just not going to be booking that cancelled trip again at least not for anytime soon. The artist will do a concert tour sometime in the future but they'd have done that anyway, the one that was cancelled is gone for good. We're not going to have a cancelled 2 week festival in 2020 run as a 4 week festival in 2021 with twice as many artists and twice as many people attending. Etc. What's gone is gone largely when it comes to the service sector and that's where the major impact is.

2. The US passes a major milestone with infections - 10,000 or 100,000 would be the likely trigger simply because it's a big round number. 

3. Someone "important" in the eyes of financial markets is diagnosed with the virus. President of the US or governor of the Fed would be the most obvious but it would probably give the markets a bit of a shake if it was anyone well known and wealthy.

If Warren Buffet, Elon Musk or the Queen can't avoid it with $ billions or being actual Royalty well then that sends a very clear message that nobody's safe. 

Timing is hard to say but I'm thinking before Easter.


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## basilio (11 March 2020)

I agree with Smurfs  second shock triggers but would add major collapses in financial sectors triggering problems in our banking systems. If the banking systems fail it is very hard to see how other economic activity can easily continue.

Also I think important people need to actually die from the virus to have an impact. For example if Mars a Largo social club had infections and half a dozen people died and the club had to close down - THAT would have a monumental impact. Similarly if politicians in the Senate or Congress fell sick and died.

And that is not an unrealistic scenario given the age of people in these institutions.


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## Smurf1976 (12 March 2020)

basilio said:


> I agree with Smurfs  second shock triggers but would add major collapses in financial sectors triggering problems in our banking systems



Agreed and I think it's really a case of saying there will be a "shock" and it will be in the not too distant future, the only question being about the detail of what and precisely when it occurs.


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## So_Cynical (12 March 2020)

basilio said:


> . Similarly if politicians in the Senate or Congress fell sick and died.



I was thinking today that one or 2 celebrities dying, or politicians, anyone high profile will be a shock, a negative quarter, rise in unemployment, rise in credit defaults, rise in bankruptcies, a few high profile bankruptcies, airlines, travel companies, hotels chains, casinos...so many triggers.

------

VFC - perfect.


----------



## Smurf1976 (12 March 2020)

To lighten the mood a bit, all the talk about a "dead cat bounce" has caused considerable concern and ultimately exhaustion:



Rest assured she's alive and well.


----------



## aus_trader (12 March 2020)

CBerg said:


> I really get the feeling since the GFC(which was a pretty uncommon event, big 50-60% declines don't happen that often in peoples lifetimes) people have just been waiting for the proverbial other shoe to drop so to speak.
> 
> I have a question then if this is going to be like the GFC, 50-60% decline and a couple(or more you choose) of years to recover. Do you plan to take advantage of it? When & how exactly do you plan to do that? This being an investment forum and all.
> 
> I don't profess to know what will happen but I know that at the end of January when I made multiple sizeable purchases I liked the prices then. I bought more again last week at lower prices. I plan on averaging down the whole way if prices keep dropping.




Depends on what you are buying I suppose, quality companies may come out alive maybe slightly bruised on the other side but crap may get stress tested during this downturn.

From personal experience I got pretty badly wiped by averaging down into all sorts of mining companies and other rubbish that eventually collapsed or got de-listed thanks to the GFC. Those lessons are hard to forget, still fresh in memory.


----------



## InsvestoBoy (12 March 2020)

kid hustlr said:


> We should change this thread to 'why do people think buying 10 year + bonds at negative real rates is a good idea'




If you know the rate of change in growth and inflation will continue to slow then you duration is the place to be.

Level is unimportant, RoC is important.

Worth getting a Hedgeye subscription to learn about this. I used to pay for the full package but now I just get “Market Edges” for a couple of hundred USD per year.

If you read Jeffrey Sniders blog, you know sovereign bonds, especially US, are “pristine collateral” in the Eurodollar system, and always in demand as that system slowly collapses, especially during liquidity/balance sheet squeezes like the one which has been unfolding since mid 2018. Listen to all the “Eurodollar University” podcasts on MacroVoices along with every other appearance he has made on the show.

Both of those things are why GSBE47 looks like this

and TLT looks like this


----------



## Struzball (12 March 2020)

CBerg said:


> I have a question then if this is going to be like the GFC, 50-60% decline and a couple(or more you choose) of years to recover. Do you plan to take advantage of it? When & how exactly do you plan to do that? This being an investment forum and all.
> .




Since January 2019 I've been putting regular money into a savings account.
Since 28th Feb I've been using those savings to put into the market gradually.
When those savings run out, instead of putting money into a savings account it will be going straight into the market (if it's low enough).
I don't really care when the bottom is.  If it's today.. then I won't put any more money in.
If it's a year from now, I guess I'll have accumulated a fair few more shares.


----------



## kid hustlr (12 March 2020)

InsvestoBoy said:


> If you know the rate of change in growth and inflation will continue to slow then you duration is the place to be.
> 
> Level is unimportant, RoC is important.
> 
> ...




I used to follow hedge eye on Twitter bit he's a bit much. The rate of change concept he spoke to did appeal to me though.

Surprises by TLT price action last 3 days??


----------



## basilio (12 March 2020)

How far will the market fall ? That assumes there is a table on which to gamble and the capacity to take your winnings home.

I would be seriously concerned about  considering the US as any sort of safe harbour financially as this crisis unfolds.

Why ?  The widespread increase in cases is already exponential. The  criminal denial of the danger of the disease by the comic genius Donald Trump has blunted any effective protection measures. 
The destruction of  testing capacity and  hamstringing of the CDC has also fatally undermined the capacity to treat people. The poor and working class  with no health insurance or savings will fall sick and spread the virus across the country.  The USA will not have the capacity to effectively undertake the very strict isolation and support activities required to control the spread of this virus.

The super rich are already  fleeing to their bunkers.  The financial vultures will be  stripping value out of all financial institutions as quickly as possible before it all falls over. This will happen "legally" or far more likely illegally.  Don't be surprised if/when financial markets are frozen-closed-disappear.  All the charting in the world won't make a dollar if the table is upended.

Be nice to offer a more measured view  to the situation and for what its worth I will  do that on other threads. However I think there is a very real risk that the US could collapse as an economic superpower and in fact leave a ruthless, effective China as head of the pack. 

And even worse scenario or course is a break out/escalation of wars if the situation deteriorates as quickly as it seems to going now.


----------



## InsvestoBoy (12 March 2020)

kid hustlr said:


> Surprises by TLT price action last 3 days??




Nah not really, I was more surprised by the action in the week before that, just complete and utter deflation panic pricing. Pullback on a capitulation move like that is to be expected.

Even the market makers on GSBE47 pulled out of the market a couple of times, Tuesday they were gone for 2-3 hours and Monday they just gave up after about 1PM. This is while they were still providing liquidity on shorter durations like 10Y.

Word on fintwit is liquidity sucks and people are selling whatever they can to meet redemptions and margin calls, 

You can see it on the board too, last night looked like everything was down except for vols.


----------



## Dona Ferentes (12 March 2020)

Dona Ferentes said:


> solid (sell) action.
> 
> View attachment 101202



will today be like yesterday? Scalpers got scalped. Falling knives lacerated. The open is looking ominous


----------



## IFocus (12 March 2020)

To state the obvious its very early days.

Although the falls are rapid bear markets do take time to unflod and the main story is rarely what the trigger is.

Note the virus is also very early days countries have locked down in efforts to contain / slow down the rate of infection.

What happens when those containment strategies get relaxed......the virus wont go away and lockdowns cannot last for ever or even to when a vaccine is produced.

What is of concern is the range of the bars in the impulsive move down they are large more worrisome is that yesterday looked like buyer exhaustion (lack of buyers) still its a bit earlier for that.


----------



## basilio (12 March 2020)

Another view on the role of the stock market in warping our view of what really matters.

*Coronavirus Matters, the Stock Market Doesn’t, and Thinking It Does May Literally Kill Us*

If you’ve been spending any time online or watching cable TV, you’ve gotten the message that humanity now faces two grave threats — a novel coronavirus and the crashing stock market — of roughly equal importance.

Yesterday CNBC’s Rick Santelli went further, staking out the position that stocks losing value is actually more terrifying than millions of deaths. “Maybe we’d be just better off if we gave it to everybody,” Santelli sagely explained. That way, lots of people would expire quickly, thereby removing the uncertainty that’s been plaguing investors.

It’s easy to criticize Santelli, but he was just taking the logic of America’s obsession with the stock market a few steps further than normal. For decades, whenever we’ve faced a choice between the reality of human beings and little numbers on a screen, we’ve always gone with the little numbers.
*https://theintercept.com/2020/03/06/coronavirus-covid-19-stock-market-economy/*


----------



## basilio (12 March 2020)

What happens when no one wants to buy (except total bottom feeders) and the exit doors are crowded?


----------



## Dona Ferentes (12 March 2020)

basilio said:


> What happens when no one wants to buy (except total bottom feeders) and the exit doors are crowded?



ah yes. There'll always be a market. Find comfort and fear in equal measure from this commentator (3am this morning:


> One more quick thing, many of you have been asking, “when is it time to buy?”
> 
> I must admit I much prefer that question to, “Is it too late to sell?”
> 
> Each of you have different risk appetites, guidelines, mandates et al.





> As I said a few days ago I am less bearish than I was 3 weeks ago, as the markets are down 20% plus, hence I have to be...don’t I?
> 
> My fear is that a lot of major global investment institutions haven’t, as yet, done much selling. I sense that they have been truly shocked by the severity and the speed of the decline.
> It worries me that the majority of them bought into the “this is just a hiccup” story and the SARS 2003 precedent/playbook.


----------



## sptrawler (12 March 2020)

basilio said:


> What happens when no one wants to buy (except total bottom feeders) and the exit doors are crowded?



When no one wants to buy there isn't a market, so no one sells, then people watch their savings slide at 1% interest rates.
Then they see that shares are paying 10-20% on the current share price, as it will be so low, then the little green monster on their shoulder says "what is wrong with you? you need a piece of that" and off the market flies again, then FOMO kicks in. Woosh.


----------



## CBerg (12 March 2020)

sptrawler said:


> When no one wants to buy there isn't a market, so no one sells, then people watch their savings slide at 1% interest rates.
> Then they see that shares are paying 10-20% on the current share price, as it will be so low, then the little green monster on their shoulder says "what is wrong with you? you need a piece of that" and off the market flies again, then FOMO kicks in. Woosh.



Yep, there's not many places for investors to park their money.
If you're 50/60/70 you still have optimistically(for the 70yo's) another 20 years ahead easy, sitting in cash is not an option when the banks are offering you almost zero.

Bonds/credit is an obvious one to me and even though the bond market has been on a decades long bull market, most Aussie investors really do not like them. It is the only holding in my super that has not lost money so far.

Leaves property & alternatives, yields look bad in Sydney & Melbourne for rentals, if you think a recession is coming then rental vacancies might jump BUT cause interest is so low the prices on housing will probably go up!

Real conundrum if you don't have a good personal balance sheet.


----------



## So_Cynical (12 March 2020)

IFocus said:


> To state the obvious its very early days.
> 
> Note the virus is also very early days countries have locked down in efforts to contain / slow down the rate of infection.
> 
> What happens when those containment strategies get relaxed......the virus wont go away and lockdowns cannot last for ever or even to when a vaccine is produced.




Spanish flu had 3 peaks over 2 and a half years, with no vaccine in sight there is every possibility that the current virus could last just as long, with the spanish flu shutdowns worked well to restrict the spread and there is good evidence that cities and states that acted late had significantly more infections and deaths. We may well be in for a winter shutdown of sorts, the panic supermarket buyers may have got it right.
~


----------



## Smurf1976 (12 March 2020)

IFocus said:


> To state the obvious its very early days.
> 
> Although the falls are rapid bear markets do take time to unflod and the main story is rarely what the trigger is.




That's a main reason why I'm thinking there must be further to fall.

Markets don't go straight down from top to bottom but this one has thus far done pretty much that, suggesting that we haven't really seen the bottom. 

Even the 1987 crash, whilst substantially a single day event, still took 37 trading days after the high to get to the bottom. Thus far this decline is only 15 days.


----------



## Klogg (12 March 2020)

So_Cynical said:


> Spanish flu had 3 peaks over 2 and a half years, with no vaccine in sight there is every possibility that the current virus could last just as long, with the spanish flu shutdowns worked well to restrict the spread and there is good evidence that cities and states that acted late had significantly more infections and deaths. We may well be in for a winter shutdown of sorts, the panic supermarket buyers may have got it right.
> ~
> View attachment 101226




Doubtful. They're trialing vaccines come April in China - on humans.

I wouldn't be surprised to see a vaccine by mid 2021. If this continues to be a pandemic, they'll push things through much quicker than normal.
Further, there are three promising antivirals. 


On a personal level - I'm 33, no underlying conditions, no elderly people in my household. One would be tempted to contract the virus, deal with a week or two of feeling crappy, then build some form of immunity.

Sounds ridiculous given all the hype, but death rates for those under 60 are miniscule - comparable to influenza.


As for the market bottom - I'm guessing once reserve banks start printing (more), we're there.


----------



## gartley (12 March 2020)

How far will it fall? On this leg down or how far will a bear campaign run?  I don't use EW ( and much thanks to another ASF member for his views on this, he nailed it from years back) much any more but given that to 2009 to 2020 move was rather sluggish compared to other world bourses I would count it as wave B. Wave A down being the the GFC low. As wave B exceeded the 2007 high it is more than likely an irregular flat which means a re test of the 2009 lows ultimately in the years ahead


----------



## satanoperca (12 March 2020)

CBerg said:


> If you're 50/60/70 you still have optimistically(for the 70yo's) another 20 years ahead easy, sitting in cash is not an option when the banks are offering you almost zero.




Why is this not an option, play it out:
Banks 0%
Share market +20% -40%, just depends on when you buy and sell
Property - who knows, but buying now might present some problems if you need to exit fast.

If I was >70+, cash looks the safest, but be aware the Govnuts deposit guarantee with the banks is not all what it seems


----------



## MrChow (12 March 2020)

1918, 1957, 1968 virus deaths all peaked at the start of the northern hemisphere flu season October-December.  2009 was heading that way too before the vaccine was given out that October.

Big market falls tend to need to elongate time and history suggests it'll get it.  Theory being people accumulate latency for 6 months then flu season hits and there's another wave.


----------



## Dona Ferentes (12 March 2020)

a pretty poor day again down more than 7%, and awful finish


----------



## CBerg (12 March 2020)

satanoperca said:


> Why is this not an option, play it out:
> Banks 0%
> Share market +20% -40%, just depends on when you buy and sell
> Property - who knows, but buying now might present some problems if you need to exit fast.
> ...



Because even though cash in the bank is not going to lose it's value in dollars terms like the share market might.
I'm yet to ever see rates, insurances, just the day to day cost of living fall in price.

If your cash pile is large enough that's it is not an issue for another 2 decades, I'd say you've managed to do pretty well for yourself.


----------



## mcgrath111 (12 March 2020)

Had an order for some ETFs. I'm expecting to get more bang for my buck in a few weeks time/ likely to go lower - but what life has taught me is, I know very little about stocks; or the economy - and so I will continue to average down. 

I imagine the ramifications on the economy will be brutal.


----------



## qldfrog (12 March 2020)

an image is worth a 1000 words
woooohhhh


----------



## aus_trader (12 March 2020)

CBerg said:


> Because even though cash in the bank is not going to lose it's value in dollars terms like the share market might.
> I'm yet to ever see rates, insurances, just the day to day cost of living fall in price.
> 
> If your cash pile is large enough that's it is not an issue for another 2 decades, I'd say you've managed to do pretty well for yourself.



I do have to agree that the buying power of cash is decreasing for just about everything, except maybe fuel due to the huge drop in oil price at the moment.

Maybe a little exposure to stocks may be the way to go even if you are at retirement age, even a little bit of Gold exposure as insurance against inflation and devaluing currency IMO.


----------



## MrChow (12 March 2020)

Current Drawdown:
XAO -26.5%
S&P500 -20.2%

Coronavirus deaths:
3 Australia
38 U.S


----------



## Dona Ferentes (12 March 2020)

MrChow said:


> Current Drawdown:
> XAO -26.5%
> S&P500 -20.2%
> 
> ...



More relevant but as uncorrelated:-
Tests for Covid-19:
10000+ ...  Australia
9000  ..... USA

(changing every day)


----------



## IFocus (12 March 2020)

Dona Ferentes said:


> More relevant but as uncorrelated:-
> Tests for Covid-19:
> 10000+ ...  Australia
> 9000  ..... USA
> ...





You have to wonder about the US infection rate with such low testing numbers and so many people coming out of the US with the virus.


----------



## bluekelah (12 March 2020)

Smurf1976 said:


> That's a main reason why I'm thinking there must be further to fall.
> 
> Markets don't go straight down from top to bottom but this one has thus far done pretty much that, suggesting that we haven't really seen the bottom.
> 
> Even the 1987 crash, whilst substantially a single day event, still took 37 trading days after the high to get to the bottom. Thus far this decline is only 15 days.




Good observation, thats why i am just gonna wait till late April at least to hunt for bargains. By then ASX should be nicely in the sub 4000 point range.


----------



## joeno (12 March 2020)

Why wait when you can load up on Puts.


----------



## wayneL (12 March 2020)

joeno said:


> Why wait when you can load up on Puts.



Because there are still risks. You will be paying an absolute crapper load of extrinsic value. If it goes against you, premium sag will be a pipe dream, it will be more like premium apocalypse.

You won't get much gamma so you are taking just about a pure volatility bet with a little bit of directional bias.


----------



## tinhat (12 March 2020)

As far as I am concerned the market can drop a gazillion percent more from here because when I was a kid and I was prop forward in a scrum the world was already over and then I would go mud crabbing in the mangroves. Nothing will kill me until I am dead.


----------



## gartley (12 March 2020)

So Scumo in his address to the nation says economy will bounce back quickly.  Not so taking  this long term Delta chart which has stood the test of time at face value!! Disregarding the y axis and focusing only on time, 20 year cycle point low ( point 14) not due till 2022


----------



## tinhat (12 March 2020)

gartley said:


> So Scumo in his address to the nation says economy will bounce back quickly.  Not so taking  this long term Delta chart which has stood the test of time at face value!! Disregarding the y axis and focusing only on time, 20 year cycle point low ( point 14) not due till 2022



Have you met scumbag? I have. Bounce will take longer but will be swift on ASX. Chose you stocks. PNV for the win.


----------



## gartley (12 March 2020)

tinhat said:


> Have you met scumbag? I have. Bounce will take longer but will be swift on ASX. Chose you stocks. PNV for the win.



Timing will be and always is the issue with s bear bounce. Not unless you like red hands


----------



## joeno (13 March 2020)

wayneL said:


> Because there are still risks. You will be paying an absolute crapper load of extrinsic value. If it goes against you, premium sag will be a pipe dream, it will be more like premium apocalypse.
> 
> You won't get much gamma so you are taking just about a pure volatility bet with a little bit of directional bias.




That's the premise of options anyways. You buy and either you make a factor or lose it all.
Yes options are more expensive because of volatility. But it's very fair.


----------



## wayneL (13 March 2020)

joeno said:


> That's the premise of options anyways. You buy and either you make a factor or lose it all.
> Yes options are more expensive because of volatility. But it's very fair.



 It's only fair if you get the direction right.

But, it looks like put buyers are doing very well.


----------



## bluekelah (13 March 2020)

wayneL said:


> It's only fair if you get the direction right.
> 
> But, it looks like put buyers are doing very well.



American markets got absolutely crushed last night off 10percent. Its terrifying thursday. Asx will crash to day limits at open


----------



## gartley (13 March 2020)

Absolutely relentless selling. A wave C in EW terms is akin to a wave 3. That is exactly what we are seeing. Would not be surprised to see S&P 500 up to 37% off the ATH on this first leg down before a major counter rally. Quick economic turnaround, yeah right......


----------



## qldfrog (13 March 2020)

Yes so should i ieave my low ball buy on the market?probably not
Too late to sell whatever is left at risk.put warrant will be too dear
I  simplified my US portfolio last night so ok there
as someone stated here, a push down by the super funds needing  to act on members move to cash could trigger full capitulation and market closure


----------



## moXJO (13 March 2020)

I think things will get cheap enough to buy for me today. Honestly it all still looked expensive up till now. Hopefully I see cheap today. I wasn't in any rush, still not really. But if it looks cheap I'll start buying.

I think the first wave of stimulus will be to slow. I wasn't that impressed with it either. Govt will panic and introduce a bigger package.

I'd feel more comfortable buying under or around 5k Xjo


----------



## gartley (13 March 2020)

Someone( who will remain nameless)  once told me on this forum you never short the banks.... Given the banking index has been hammered to this extent thus far, how much lower?
I noticed last night Deutche Bank has collapsed. Could be time to run for the hills....


----------



## moXJO (13 March 2020)

Do superfunds switch to protect members assets?


----------



## dutchie (13 March 2020)

XJO could go below 3000.


----------



## qldfrog (13 March 2020)

moXJO said:


> Do superfunds switch to protect members assets?



Many member will change their allocation from balanced agressive etc to cash capital garanteed etc probably this week end with effect next Tuesday.
Funds themselves might change their own allocation for the balanced fund.. usually the biggest of all funds.
we will see learn after the facts....


----------



## IFocus (13 March 2020)

So DOW down 10% over night was hoping this would come later but here we are, white knuckle ride but remember this is only the start early days yet only at around the disbelief stage still some way to the sky is falling panic.

Capitulation is the buy signal during the GFC that was CBA around $24 if I remember.

Some have been asking how do you make money out of this.

Opportunities like this can be a once a lifetime opportunity to buy the low but remember its low because of expectations the sky is falling and there is real risk that this time will be different.

Still early days IMHO.


----------



## moXJO (13 March 2020)

dutchie said:


> View attachment 101280
> 
> XJO could go below 3000.



I was thinking  4000,  maybe between  3000-4000. If it looks like the world is slowing up to much and I revise down

For now it's 5000-4800 and I'll look at prices to buy.
If it still looks pricey (and I'm a tight arse) I might wait to see. At this stage I highly doubt we are getting an immediate reversal.


----------



## joeno (13 March 2020)

qldfrog said:


> put warrant will be too dear




People said that 2 weeks ago. If you bought puts 2 weeks ago you would've made a fortune.


----------



## Dona Ferentes (13 March 2020)

today's _cattus mortuus ?_


----------



## lusk (13 March 2020)

joeno said:


> People said that 2 weeks ago. If you bought puts 2 weeks ago you would've made a fortune.




That's rear mirror vision trading.
Heaps of traders will be getting burnt now trying to pick the bottom.
Capital preservation should be the goal not making profits. Best position is to stand aside.


----------



## aus_trader (13 March 2020)

dutchie said:


> View attachment 101280
> 
> XJO could go below 3000.



That's a big call, time will tell...

In the meantime market looks to be frozen, too much volume to handle maybe


----------



## Sharkman (13 March 2020)

joeno said:


> That's the premise of options anyways. You buy and either you make a factor or lose it all.
> Yes options are more expensive because of volatility. But it's very fair.




don't know about it being particularly fair at the moment.

i took one look at the options market yesterday and concluded that options are virtually untradeable at the moment. for me at least anyway. haven't bothered checking the market today as i know i'm not going to be making any trades.

i saw some ATM options were trading at a 72 IV. basically saying that the 1 SD variance for a month is about +/- 20%. but at the bid, the IV was around 50. at the offer, it was close to 100. and those were ATM options - buying OTM puts would be even more expensive in IV terms as the delta skew always gets really steep when this sort of thing happens.

i didn't put any order in as i wasn't actually interested in trading them, was just curious what the IVs were like, so i don't know for sure, but at a guess i would say that in an environment such as this, the MM will make you cross most of that spread regardless of whether you're buying or selling. so unless you can chance upon another retail trader wanting to take the opposite side, good luck getting a decent fill.

and what were those options on? well, it wasn't some small stock that hardly anyone's heard of, owns or trades. it was CBA. one of the most liquid options on the ASX, and along with TLS probably amongst the least volatile historically.


----------



## greggles (13 March 2020)

It's interesting to compare the GFC with this week's market collapse.

*Global Financial Crisis November 2007 - March 2009*




*Coronavirus Market Crash March 2020*




Two completely different beasts. The GFC was a slow, measured transformation from a bull market to a bear market, while this week's correction was a short, sharp, brutal market collapse.

The question is, are we going to have a V-shaped snap back recovery... or will the after-effects of the coronavirus persist and linger for months or even longer?


----------



## moXJO (13 March 2020)

I've picked up a few shares today. Still looks just a tad bit high on a few things. Still room for movement down for us tightwads.

I'd expect a strong response from world governments or financial markets are going to lock. The response may be the sugar rush the market needs. But I don't see recovery back to 7000.
For all we know markets might be choppy till US elections are over.


----------



## Dona Ferentes (13 March 2020)

moXJO said:


> For all we know markets might be choppy till US elections are over.



 Both major party candidates in their 70's..... eight months to go.


----------



## moXJO (13 March 2020)

Dona Ferentes said:


> Both major party candidates in their 70's..... eight months to go.



I'm sure trump  has it, or was standing with people that had it.


----------



## Sharkman (13 March 2020)

couldn't resist taking a quick peek at the CBA options today, again out of curiosity more than anything else, there is no way i'm going to be dealing any options at this point.

some narrowing of the spread near the money, about 92/108 (in IV terms) at the nearest strike, so it's vaguely tradeable if one sees those IVs as representing good value from one side or the other.

completely untradeable at the wings though. at 25'ish delta, the spread is about 76/210 on the puts and 42/120 on the calls. *nobody *wants to sell OTM puts in this climate and even if you could somehow get the mids, you'd have to pay nearly 2% of the stock price just for a ~2 week 25 delta collar.


----------



## Smurf1976 (13 March 2020)

greggles said:


> Two completely different beasts. The GFC was a slow, measured transformation from a bull market to a bear market, while this week's correction was a short, sharp, brutal market collapse.



Looking at past declines, this one looks more like 1929 than anything recent based on charts of indices that were around back then (eg the Dow was).


----------



## Smurf1976 (13 March 2020)

Not based on any proper T/A but I'll say it here that the market does look as though we could be about to get the bounce.

Yes there's been a plunge last night in the US and today in Australia but there are divergences eg oil.

Don't take my observation too seriously - it's really just gut feel looking at an assortment of charts and the news. Looks rather like the sort of thing for a short term bottom and I'm thinking we'll see a major move up tonight overseas. Proceed with extreme caution.....


----------



## moXJO (13 March 2020)

That was some quick profits. Was there some news released?


----------



## basilio (13 March 2020)

Wow!! Talk about the giant sling shot of stock exchanges.

XAO starts the day at 5304.  Drops  360 points in the first 10 minutes of trading. Frankly on the past few days that now looks "normal"

Meanders up and down (more down actually) until it hits 4884 at 12.40.  That was a 420 point drop or about 8% 

Three hours later at 15.40 the market is at 5433.  *It has jumped  550 points.*

But we can stop counting our chickens because in a scant 10 minutes   it has fallen 130  points*.

This reminds of the last hours of late night poker games when people are making drunk, crazy bets

*


----------



## gartley (13 March 2020)

Got a buy signal for this bounce off the 3hr chart and took it. Hit my take profit before I even had time to blink!!


----------



## basilio (13 March 2020)

Does this all mean the Corona Virus is now dealt with and we can get back to normal ?
(Or was it just some desperate  crap shooters (and shorters.) getting onto a roll ?)


----------



## Dona Ferentes (13 March 2020)

And does the old maxim _*"Amateurs open markets, professionals close them"*_ have implications for Monday?


----------



## UMike (13 March 2020)

Yea I bought ANZ, STO (well under half of what I sold it a month ago) and QBE.

I'm a bit long term so lets hope the worst is over and we recover in volatility.


----------



## MrChow (13 March 2020)

From Peak:
1987 Crash -33% in 5 weeks
2020 Crash -32% in 4 weeks

China and Korea GDP Q2 is predicted to be positive in a V shape recovery.  If other countries do the same for Q3 history books might look at this as a stock market crash outlier like 1987 rather than a typical recession.


----------



## wayneL (13 March 2020)

RBA's 8.5 billion might have something to do with it..... (and guess who's going to eventually have to stump up for that?)


----------



## gartley (13 March 2020)

basilio said:


> Does this all mean the Corona Virus is now dealt with and we can get back to normal ?
> (Or was it just some desperate  crap shooters (and shorters.) getting onto a roll ?)



Normal market or normal life? Strange thing about it is that more people may go bankrupt than actually die from this virus...


----------



## wayneL (13 March 2020)

gartley said:


> Normal market or normal life? Strange thing about it is that more people may go bankrupt than actually die from this virus...



"Bail in" anyone?

Or.... How about having your deposits confiscated plus being in ICU as well?

Fun times ahead.


----------



## hja (13 March 2020)

Smurf1976 said:


> Looking at past declines, this one looks more like 1929 than anything recent based on charts of indices that were around back then (eg the Dow was).



You've got a good memory, young fella! hehe
We haven't seen a small range day since the XAO was > 7000s... I can't find a 1929 chart to compare.


----------



## Smurf1976 (13 March 2020)

Smurf1976 said:


> Not based on any proper T/A but I'll say it here that the market does look as though we could be about to get the bounce.



I should clarify that I'm referring to the situation globally there since obviously we did get a bounce later today in Australia.

So global stock indices, bond markets, commodities - all a bounce away from the recent trend is my thinking.


----------



## Smurf1976 (13 March 2020)

hja said:


> You've got a good memory, young fella! hehe
> We haven't seen a small range day since the XAO was > 7000s... I can't find a 1929 chart to compare.



https://thegreatrecession.info/blog/wp-content/uploads/1929-Stock-Market-Crash-Daily-Chart.jpg


----------



## macca (13 March 2020)

Smurf1976 said:


> https://thegreatrecession.info/blog/wp-content/uploads/1929-Stock-Market-Crash-Daily-Chart.jpg




The books I have read all suggested that it was those who were over leveraged that suffered the most. 

Perfectly logical, nothing has changed, just the rule of mathematics and margin calls, all part of the challenge.

The thing I find unusual is that "some people" carry on about punters and gambling yet it seems it is OK to bet the house on the stock market.

This forum is without doubt, the most sensible market forum that I have ever found ( well apart from its predecessors where much the same posters were members)


----------



## InsvestoBoy (13 March 2020)

InsvestoBoy said:


> Using the co-ordinates of the peak=>trough and high of todays retracement (7202, 5350, 6037) as inputs to a Fibonacci extension gets you 4582 as the 0.786 extension and 4185 as the 1.0 extension.




Who knew at the time that 7202, 5350, 6037 would actually be the valid swing?

Anyway, looks like 4895, the 0.618 extension was tapped and closed for the bounce:



Who knows whether we'll hit the 0.786 or 1.0 extensions?


----------



## hja (13 March 2020)

Smurf1976 said:


> https://thegreatrecession.info/blog/wp-content/uploads/1929-Stock-Market-Crash-Daily-Chart.jpg



Yeah I meant it's hard to find a daily showing the size of the daily bars to compare with the chart InvestoBoy posted above, he shows how different the bars look from the start of his dashed swing. 
edit: Oops it is. They're just such squashed together so it looks like a line graph.


----------



## DaveK (13 March 2020)

Some graphical representations of this compared with 87.. also today’s bounce so far on the next graph.  Source Twitter @GrogsGamut


----------



## aus_trader (13 March 2020)

Sharkman said:


> so unless you can chance upon another retail trader wanting to take the opposite side, good luck getting a decent fill.




I have probably said this before, but will say it again in case there are innovative little companies like Selfwealth Ltd (SWF) and maybe the dinosaur brokerage firms that want to re-invent themselves are listening in...

The reason why there are hardly any retail traders in the ASX option market is it's freakin' expensive to trade options on the ASX. No local broker offers Options trading brokerage below $34.95 which is ridiculous compared to other developed countries such as the US that offer options trading at around US$5 per trade.

First hurdle in trading the ASX options market was broken thanks to the ASX that removed the contract size from 1000 shares to 100 shares a while back, so even I can buy/sell CBA(even the ridiculously high priced CSL) options if 2nd hurdle was removed. The 2nd hurdle of bringing down the options brokerage cost still remains. When it comes to brokerage, I think disruptive innovators like Selfwealth that offer CHESS sponsored share trading at Australia's lowest price at A$9.50 may eventually offer similar brokerage for ASX ETO (Exchange Traded Options) one day... Till then don't expect to find dumb clueless retail mum & dad investors/traders to offer cheap options on the market (to take the opposite side as you said).


----------



## aus_trader (14 March 2020)

gartley said:


> Got a buy signal for this bounce off the 3hr chart and took it. Hit my take profit before I even had time to blink!!



Are you a day-trader? Or a very short term trader?
From your previous posts I thought you were looking at the long term picture and charts.


----------



## aus_trader (14 March 2020)

wayneL said:


> RBA's 8.5 billion might have something to do with it..... (and guess who's going to eventually have to stump up for that?)



Er… Tax Payers ?


----------



## dutchie (14 March 2020)

aus_trader said:


> I have probably said this before, but will say it again in case there are innovative little companies like Selfwealth Ltd (SWF) and maybe the dinosaur brokerage firms that want to re-invent themselves are listening in...
> 
> The reason why there are hardly any retail traders in the ASX option market is it's freakin' expensive to trade options on the ASX. No local broker offers Options trading brokerage below $34.95 which is ridiculous compared to other developed countries such as the US that offer options trading at around US$5 per trade.
> 
> First hurdle in trading the ASX options market was broken thanks to the ASX that removed the contract size from 1000 shares to 100 shares a while back, so even I can buy/sell CBA(even the ridiculously high priced CSL) options if 2nd hurdle was removed. The 2nd hurdle of bringing down the options brokerage cost still remains. When it comes to brokerage, I think disruptive innovators like Selfwealth that offer CHESS sponsored share trading at Australia's lowest price at A$9.50 may eventually offer similar brokerage for ASX ETO (Exchange Traded Options) one day... Till then don't expect to find dumb clueless retail mum & dad investors/traders to offer cheap options on the market (to take the opposite side as you said).



Nice post aus_trader.

The main problem, as you have pointed out, with option trading is the cost to trade (absolutely ridiculous). The second problem is liquidity. Our option market is just not big enough.
At the moment the only place to trade options is the US market. The only people making money out of options, in Australia, are overpriced market makers and brokers.
The other problem you mentioned is the cost to trade shares. This again is price gouging, especially by CommSec (Commonwealth Bank). The cost of the paperwork etc that brokers perform is nowhere near $20, so its a nice little profit margin that they have. And don't start me on charging a brokerage fee as a percentage of the trade value!


----------



## InsvestoBoy (14 March 2020)

If you want to "trade" ASX options, good luck.

If you want to use ASX options as hedging instruments, get an Interactive Brokers account, you can trade options for 1AUD commission. I bought puts on STW in Nov last year and Feb this year with no problems to hedge my VAS longs.


----------



## Sharkman (14 March 2020)

aus_trader said:


> First hurdle in trading the ASX options market was broken thanks to the ASX that removed the contract size from 1000 shares to 100 shares a while back




this change happened in 2011 but without the improvement in liquidity, volume and participation that it was hoped would follow on from this, it has been more of a nuisance than a help. on several occasions i'd be trying to work the spread and have an open order for something like 100 BHP or NAB contracts, only to have someone come along, take out 2 or 3 of my order, then the market moves and i have to adjust my order for the remaining contracts. not only does that incur another lot of brokerage as it counts as a separate order, but it's annoying from a record keeping point of view as now it's 2 (or more) separate parcels.

this has happened on numerous other occasions too, but what i've usually done is wait a few minutes to see if i can get the rest of my order filled at the same price to avoid the multiple parcels, only to wind up paying for it instead by seeing it slip a few too many ticks to their side of the spread and then it gets filled.

this sort of thing never happened back when it was a 1000 lot size.

100 lot size makes sense in the US as the prices of their stocks are huge, stock prices in the hundreds or even thousands of dollars are fairly common. whereas here off the top of my head it's just CSL, COH and MQG, and none of those 3 are particularly liquid as far as options go.

this wouldn't be an issue if there were better spreads and liquidity, but there isn't, necessitating having to "work" the spread to get decent fills (ie. start on your side of the spread, move it in a tick or two gradually until you get filled or you reach a price where you say forget it, this is not good value, i'll move on/come back later) and as a result you open yourself up to getting nibbled like above.

i can understand the rationale behind it, but it has been in place for years now and the envisioned improvements in spreads and liquidity do not seem to have materialised, in fact if anything they have grown worse than in 2011, with the exit of some MMs since then resulting in reduced competition. so in my view this has been a failed experiment.

i'd rather they go back to 1000 lot sizes to cut out the sort of irritating nibbling that i described above. they could introduce 100 lot size mini-options over selected dollar expensive stocks (CSL, COH, MQG, CBA, RIO) like in the US where they have 10 lot size contracts over things like Amazon and Google. but i really don't think 100 lot size works well for lower priced stocks like ANZ, QBE, WBC and especially TLS - what's really needed there is lower *tick* size, not lower lot size. 0.1c tick size on TLS options would make them much more tradeable than they are now.


----------



## aus_trader (14 March 2020)

InsvestoBoy said:


> If you want to "trade" ASX options, good luck.
> 
> If you want to use ASX options as hedging instruments, get an Interactive Brokers account, you can trade options for 1AUD commission. I bought puts on STW in Nov last year and Feb this year with no problems to hedge my VAS longs.




Interesting, and that would have served you well especially the Feb puts. As for myself I would like a local brokerage firm to take the lead to offer lower options trading brokerage. Especially in the current market where Aud/Usd is trading below $62, I am not going to deposit A$16,000+ to get a US$10,000 minimum requirement to open an Interactive Brokers account. If Aud/Usd goes up by a massive amount I will re-consider.

How expensive was it to insure your long holding e.g. in % terms (say it costs 1% of the VAS portfolio for a 2 months expiry) and were these puts at, in or out of the money when bought?


----------



## InsvestoBoy (15 March 2020)

aus_trader said:


> Interesting, and that would have served you well especially the Feb puts. As for myself I would like a local brokerage firm to take the lead to offer lower options trading brokerage. Especially in the current market where Aud/Usd is trading below $62, I am not going to deposit A$16,000+ to get a US$10,000 minimum requirement to open an Interactive Brokers account. If Aud/Usd goes up by a massive amount I will re-consider.
> 
> How expensive was it to insure your long holding e.g. in % terms (say it costs 1% of the VAS portfolio for a 2 months expiry) and were these puts at, in or out of the money when bought?




I don't think there is any deposit minimum for opening an IB account anymore, I don't remember having one.

I can't remember the pricing for the March puts off the top of my head but in Feb I paid about 1.3% of portfolio value to hedge out till end of June at the money or very close to at the money.


----------



## aus_trader (15 March 2020)

InsvestoBoy said:


> I don't think there is any deposit minimum for opening an IB account anymore, I don't remember having one.
> 
> I can't remember the pricing for the March puts off the top of my head but in Feb I paid about 1.3% of portfolio value to hedge out till end of June at the money or very close to at the money.




That's not a bad premium paid to protect the downside for about 4 to 5 months out. Good timing !

I think the account minimums still apply, I'll have to contact them to double check...


----------



## InsvestoBoy (15 March 2020)

aus_trader said:


> That's not a bad premium paid to protect the downside for about 4 to 5 months out. Good timing !




Pure luck that I caught it when I did this time. Plenty of other put buying excursions over the years that ended in evaporated premium.


----------



## aus_trader (15 March 2020)

InsvestoBoy said:


> Pure luck that I caught it when I did this time. Plenty of other put buying excursions over the years that ended in evaporated premium.



Yes, well done. It can really count to have some downside protection when a black swan event like this hits.


----------



## Cam019 (15 March 2020)

This is what I am seeing. Two major support areas and one minor support area. It will not surprise me to see the XJO come back into the 3150 - 3500 zone within the next 12 -18 months.


----------



## wayneL (16 March 2020)

It will be interesting when the next lot of earnings come out. I don't think we can take any earnings trends for granted for the next little while.


----------



## moXJO (16 March 2020)

Cam019 said:


> This is what I am seeing. Two major support areas and one minor support area. It will not surprise me to see the XJO come back into the 3150 - 3500 zone within the next 12 -18 months.
> 
> View attachment 101371



Everything still looks pricey to me so it's a possibility.


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## qldfrog (16 March 2020)

well was hoping selfishly for a small rebound to offset what I had left but no..free fall again


----------



## basilio (16 March 2020)

A query if anyone can offer  some ideas.
Last Friday we saw an amazing roller coaster of a ride on the markets. 8% plunge during the day and then a 12% reversal in the last two hours to close up 4%.

*What I also noticed was that a very large amount of the final surge happened in the post 4 pm auction*. If you check out the SP of various bank stocks for example you can see the huge jump in price  at the 4.12 time slot.

Can anyone offer a reason for such a desperate last minute leap ? Could there have been a play in place on the index reaching a particular level ? 

Thoughts ?


----------



## MrChow (16 March 2020)

Possibly the big institutions got word of the U.S stimulus announcement which led the Dow Jones to +9% Saturday morning.


----------



## satanoperca (16 March 2020)

So lets look at some facts:
$8B pumped into the markets by the RBA on friday, also the same amount they pumped into the market during the GFC to prevent the dollar from going <.60 USD.

Should have prevented some falls, it did, but sort lived.

But that is insignificant to what occurred on Sunday, USA Fed Reserve, smashes IR's to zero, massive move, if that cannot stabilize the markets, what can? Nothing.

The central banks are out of ammo, the fun times start. The monetary system is one it knees with a fist full of lube hoping something/someone will give it to them.

The virus is annoying, but what govnuts and central banks have been doing for the last 30 years is equal to suicide by 1000 cuts. 

Interesting times ahead.


----------



## basilio (16 March 2020)

MrChow said:


> Possibly the big institutions got word of the U.S stimulus announcement which led the Dow Jones to +9% Saturday morning.




Ok . Did they think this decision was going to be some sort of saviour for them ? If they were behind the huge buying splurge in the post day auction period they have dropped a mint today.


----------



## Dona Ferentes (16 March 2020)

another shocker of a close today


----------



## MrChow (16 March 2020)

Currently:

XAO -30.6%
S&P500 -20.1%

Looks like another big Monday night over there.


----------



## basilio (16 March 2020)

Yeah.  Absolute nightmare. Dropped 100 points at close.   

I had a look at the long term charts of some bank shares. Totally unnerving to see a vertical line at the end of the graph. I can't imagine any financial analyst imagining such a scenario 3 months ago short of Armageddon.

Have to wonder at the security of many pension/super funds and when this might come to light.  Because this has all happened in a bare few weeks I reckon reporting procedures havn't caught up.


----------



## basilio (16 March 2020)

MrChow said:


> Currently:
> 
> XAO -30.6%
> S&P500 -20.1%
> ...



Merde...


----------



## SirRumpole (16 March 2020)

I wonder what part algorithmic trading plays in all of this.

Some institutions need their algorithms checked I reckon.


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## sptrawler (16 March 2020)

Uni Super has stopped lending its shares to short sellers, wonder if they are worried about getting burnt?

https://www.financialstandard.com.au/news/unisuper-suspends-stock-lending-156181752


----------



## Sdajii (16 March 2020)

SirRumpole said:


> I wonder what part algorithmic trading plays in all of this.
> 
> Some institutions need their algorithms checked I reckon.




An algorithm can say whatever it likes. The reality is that the fall is just starting. This isn't going to be like 2008, it'll be more like 1929. If I had anything in the market a month ago I'd have scurried to sell it. If I had anything now I'd just sell it without hesitation.

I can scarcely understand why anyone is holding almost anything at this point. The market might only drop 10% over the rest of the week, or it could drop 50%. Either way it would look expensive to me.

The world doesn't get thrown into panic with entire industries being taken offline without the economy being devastated. If China sneezes, Australia catches a cold. China didn't just sneeze, it caught COVID-19.


----------



## gartley (16 March 2020)

aus_trader said:


> Are you a day-trader? Or a very short term trader?
> From your previous posts I thought you were looking at the long term picture and charts.




Both. Especially, since the ranges are so big at the moment. Like to look at longer term charts too because they offer a good perpective especially in suggesting when trends are at risk. Another example is the Nasdaq Composite chart attached which was scoffed at by the bulls a few months ago


----------



## moXJO (16 March 2020)

The public look panicked. Woolworths and Coles empty shelves with the media whipping up hysteria is not a good look. If they can't do the basics. Like keeping toilet paper stocked after this many weeks. Then no wonder people are being stupid. Get the small things right.

I don't feel the government has moved swiftly or decisively enough (either medically or financially). They and business need to show a strong hand. Fear seems to be running pretty high.

So another run down is most likely. I'll probably pick up some more if we hit round the 4000-4150. Possibly see how we hold round 4800 tomorrow and judge if I will pick up some more at that. I'm still in profits from Friday buying, though that may vanish by tomorrow.


----------



## sptrawler (16 March 2020)

It may be a good time to re assess the watchlist, delete some of the speculative make a wish stocks and add some 'once in a lifetime' if it gets cheap enough stocks IMO


----------



## gartley (16 March 2020)

Current price level plus or minus a couple of hundred seems to very important. Will be interesting to see how price action interacts with it in the weeks ahead.


----------



## OmegaTrader (16 March 2020)

moXJO said:


> The public look panicked. Woolworths and Coles empty shelves with the media whipping up hysteria is not a good look. If they can't do the basics. Like keeping toilet paper stocked after this many weeks. Then no wonder people are being stupid. Get the small things right.
> 
> I don't feel the government has moved swiftly or decisively enough (either medically or financially). They and business need to show a strong hand. Fear seems to be running pretty high.
> 
> So another run down is most likely. I'll probably pick up some more if we hit round the 4000-4150. Possibly see how we hold round 4800 tomorrow and judge if I will pick up some more at that. I'm still in profits from Friday buying, though that may vanish by tomorrow.




4800-4900   ok
4000-4100   good
3200-3300   bargain
<2800        ???  personal debt/credit crisis/ bail in-out/super stimulus printing press

If your cashed up get ready


----------



## mikejosef (16 March 2020)

OmegaTrader said:


> 4800-4900   ok
> 4000-4100   good
> 3200-3300   bargain
> <2800        ???  personal debt/credit crisis/ bail in-out/super stimulus printing press
> ...




what a depressing chart. 

I find it very hard to read what will happen next, but considering the panic over the weekend, i predict the market will stop falling the day Aus daily death rates start falling, which i think is 2 weeks away if im reading Scomo's flattened curve.


----------



## satanoperca (16 March 2020)

Try under 4000 within 4-6 weeks. Got to love panic


----------



## gartley (16 March 2020)

My 2c worth for a longer term EW count.....


----------



## satanoperca (16 March 2020)

Wow Gartley, a little more than I was thinking, which was somewhere around 3200.


----------



## moXJO (16 March 2020)

satanoperca said:


> Try under 4000 within 4-6 weeks. Got to love panic



"Panic" is the key word.
And people are following it to the script out there.


----------



## OmegaTrader (16 March 2020)

mikejosef said:


> what a depressing chart.
> 
> I find it very hard to read what will happen next, but considering the panic over the weekend, i predict the market will stop falling the day Aus daily death rates start falling, which i think is 2 weeks away if im reading Scomo's flattened curve.



How many Australians have died so far? This has nothing to do with death rates.  Playing the man not the game.

You don't  need toilet paper when your dead.

2800 wow a big panic for that.


----------



## gartley (16 March 2020)

satanoperca said:


> Wow Gartley, a little more than I was thinking, which was somewhere around 3200.



Most likely we will both be wrong, it's like the lottery trying to bottom pick.. Only expected 5600 in Bill's prediction game so already got it wrong once!!
What's more important will be the structure of the pattern as it unfolds in the next few years.


----------



## J1eyed (16 March 2020)

We are about to get the most substantial demand collapse the world has ever seen. This is no longer about the virus and is about whether the central banks can save the financial system. Over the last ten years, corporates have gone a massive debt binge and invested in share buybacks (not productive assets). Right now liquidity has disappeared from the corporate bond market. When no one knows which loans are going to go bad, all are assumed to go bad. This is going to take months and months to clear up. All the while the taxpayer is going to be the proud owner of zombie companies. Basically we are all turning Japanese.

If the central banks can save the corporate debt market, then it's the GFC, if they can't its 1929.


----------



## satanoperca (16 March 2020)

"If the central banks can save the corporate debt market, then it's the GFC, if they can't its 1929." 
95% chance we are 1929 then.
The central banks have nothing left, zip , zero,0, they have run their course, their theories have failed.


----------



## gartley (16 March 2020)

MrChow said:


> Currently:
> 
> XAO -30.6%
> S&P500 -20.1%
> ...



 Capitulation of ASX relative to US indices not surprising given the struggling advance we had since GFC low, not to mention the state of our dollar!!
Still I see DAX is 38% off it's ATH so we are not the worst


----------



## Smurf1976 (16 March 2020)

What we're seeing is a progressive collapse of expectations.

Take this thread for example. It started less than a week ago and the first posts are talking about 20% decline from the peak and so on. Now we're talking about drastically more than that, indeed real world reality has already blown through the earlier thoughts.

That basic pattern is being seen across everything at the moment. Whatever was thought a week ago, the thinking is far worse now. 

We'll be somewhere near the bottom when that stops being the case. When expectations stop being revised downward or even simply stop being issued in the first place because just about everyone's given up. 

We're not at that point yet.....


----------



## aus_trader (17 March 2020)

gartley said:


> Both. Especially, since the ranges are so big at the moment. Like to look at longer term charts too because they offer a good perpective especially in suggesting when trends are at risk. Another example is the Nasdaq Composite chart attached which was scoffed at by the bulls a few months ago



I see, nice charts by the way


----------



## aus_trader (17 March 2020)

Smurf1976 said:


> We're not at that point yet.....




Don't forget to post a shout out when we are there or close enough


----------



## Smurf1976 (17 March 2020)

aus_trader said:


> Don't forget to post a shout out when we are there or close enough




That's the bit I'm not so good at.

Knowing when we're there that is. I can do the shouting though..... 

Seriously, everything I've seen from charts others have posted here through to looking at previous crashes is all much the same in that to be near the bottom now would require this to be dramatically faster and straighter from top to bottom than any previous decline. Possible but I doubt it.


----------



## gartley (17 March 2020)

Given the theme of this thread have decided to look at 5 big panics in history all of which had very high momentum initial moves before starting counter trend rallies. The 87 crash ofcourse was over within a few days but had a re test of the lows months later. All the others continued bearishly after a "hopes re kindled " rally.  I have measured the excusion of price from a nominal level ( a centered weighted moving average). So how much lower before a sustained countertrend? If history is any guide we are getting close. Perhaps only up 3-4 % lower to go. Presently 20.03% below the nominal and the SPX during the crash of 29 (the highest of the I looked at) went 23.7% below nominal.


----------



## bluekelah (17 March 2020)

Given we hit 3500 in 2009, I would expect things to bottom out to similar levels this time round or slightly lower. After all we have to factor in some inflation.

My prediction is European recession/crisis + USA crisis.recession from virus -> china and asia  recession due to collapse of export markets - > australia will have a very severe recession from COVID19 and Chinese recession.

Its gonna be U shape recovery best case and worse case an ongoing 10year depression/stagflation type thing...


----------



## aus_trader (17 March 2020)

gartley said:


> Given the theme of this thread have decided to look at 5 big panics in history all of which had very high momentum initial moves before starting counter trend rallies. The 87 crash ofcourse was over within a few days but had a re test of the lows months later. All the others continued bearishly after a "hopes re kindled " rally.  I have measured the excusion of price from a nominal level ( a centered weighted moving average). So how much lower before a sustained countertrend? If history is any guide we are getting close. Perhaps only up 3-4 % lower to go. Presently 20.03% below the nominal and the SPX during the crash of 29 (the highest of the I looked at) went 23.7% below nominal.



Very interesting charts, thanks. I'd like to think optimistically as well and say we must be at or near the bottom.

Only worry is the China involvement this time. With GFC, we had an approx. 50% decline in the markets despite everyone (not me, I got haemorrhoids) cheering and high fiving how China saved Australia from a recession and things went on as nothing has happened.



bluekelah said:


> australia will have a very severe recession from COVID19 and Chinese recession.



 Yeah, I have the same worry because our economy is so reliant (due to mineral exports and consumer goods imports) on China.

So all in all, I think it's probably too early to say there's nothing further to worry about...


----------



## moXJO (17 March 2020)

Stocks were still looking expensive. Let's see after today. There are a lot of trash stocks out there


----------



## lusk (17 March 2020)

gartley said:


> Given the theme of this thread have decided to look at 5 big panics in history all of which had very high momentum initial moves before starting counter trend rallies. The 87 crash ofcourse was over within a few days but had a re test of the lows months later. All the others continued bearishly after a "hopes re kindled " rally.  I have measured the excusion of price from a nominal level ( a centered weighted moving average). So how much lower before a sustained countertrend? If history is any guide we are getting close. Perhaps only up 3-4 % lower to go. Presently 20.03% below the nominal and the SPX during the crash of 29 (the highest of the I looked at) went 23.7% below nominal.




This ones really unique, 2020 was from a high. All the others had some form of roll over/lower high before the descent. If you trade without stops you would have got hammered/trapped, either until you couldn't handle it anymore and sold or just decided no point selling now.


----------



## Knobby22 (17 March 2020)

lusk said:


> This ones really unique, 2020 was from a high. All the others had some form of roll over/lower high before the descent. If you trade without stops you would have got hammered/trapped, either until you couldn't handle it anymore and sold or just decided no point selling now.




Yes, we are in new territory.
In many ways this is worse than those previous falls, massive disruption of all levels of society and commerce.
On the other hand, it will end quicker once the virus has passed however not without major damage.
No one really knows how low it will go or how long it will last. The market commentators are as clueless as the economists.


----------



## aus_trader (17 March 2020)

moXJO said:


> Stocks were still looking expensive. Let's see after today. There are a lot of trash stocks out there



I think the weeds will be removed or severely pruned back from the crops this time...


----------



## Dona Ferentes (17 March 2020)

Smurf1976 said:


> What we're seeing is a progressive collapse of expectations.
> 
> Take this thread for example. It started less than a week ago and the first posts are talking about 20% decline from the peak and so on. Now we're talking about drastically more than that, indeed real world reality has already blown through the earlier thoughts.
> 
> ...



Capitulation


----------



## Dona Ferentes (17 March 2020)

Knobby22 said:


> Yes, we are in new territory.
> 
> The market commentators are as clueless as the economists.



the epidemiologists are running policy, advising the politicians and technocrats. the market is roadkill


----------



## sptrawler (17 March 2020)

Well one thing for sure, it is getting all that fat out of the market that the media were complaining about, caused by cheap money.


----------



## sptrawler (17 March 2020)

Knobby22 said:


> Yes, we are in new territory.
> In many ways this is worse than those previous falls, massive disruption of all levels of society and commerce.
> On the other hand, it will end quicker once the virus has passed however not without major damage.
> No one really knows how low it will go or how long it will last. The market commentators are as clueless as the economists.



It will give clarity to Buffett's saying, "Only when the tide goes out do you discover who's been swimming naked."
Bad balance sheets and poorly run companies will disappear very quickly, as banks wont be able to prop up everyone.


----------



## moXJO (17 March 2020)

So far that 4800-5000 mark is our fortress wall. Will it hold all day?

Asia leading the dow?

Japan just did stimulus or something didn't they?


----------



## OmegaTrader (17 March 2020)

moXJO said:


> The public look panicked. Woolworths and Coles empty shelves with the media whipping up hysteria is not a good look. If they can't do the basics. Like keeping toilet paper stocked after this many weeks. Then no wonder people are being stupid. Get the small things right.
> 
> I don't feel the government has moved swiftly or decisively enough (either medically or financially). They and business need to show a strong hand. Fear seems to be running pretty high.
> 
> So another run down is most likely. I'll probably pick up some more if we hit round the 4000-4150. Possibly see how we hold round 4800 tomorrow and judge if I will pick up some more at that. I'm still in profits from Friday buying, though that may vanish by tomorrow.




4800 is a brave buy I think alot of people had the same idea by the looks of the chart.



J1eyed said:


> We are about to get the most substantial demand collapse the world has ever seen. This is no longer about the virus and is about whether the central banks can save the financial system. Over the last ten years, corporates have gone a massive debt binge and invested in share buybacks (not productive assets). Right now liquidity has disappeared from the corporate bond market. When no one knows which loans are going to go bad, all are assumed to go bad. This is going to take months and months to clear up. All the while the taxpayer is going to be the proud owner of zombie companies. Basically we are all turning Japanese.
> 
> If the central banks can save the corporate debt market, then it's the GFC, if they can't its 1929.






satanoperca said:


> "If the central banks can save the corporate debt market, then it's the GFC, if they can't its 1929."
> 95% chance we are 1929 then.
> The central banks have nothing left, zip , zero,0, they have run their course, their theories have failed.





Questions
1) Isn't the problem in Aus private housing debt?
2) How do we know that this will be the one to deleverage the debt
3) Did anyone think that 2008 was the one too?
4) Will the fed gov bow to political pressure for stimulus if it gets bad enough?

My two cents
1) Federal gov can still do stimulus and use QE to buy the debt
2) The debt does not have to be bailed out in totality, only keep the economy still kicking along to allow repayments
3) Rates are very low so even though debt is large repayments are low
4) Aus has sovereign currency not like eurozone
5) Central banks can inject liquidity into almost any market
6) RBA can act as lender of last resort to banks and exchanges,using swaps,RBMS etc

I don't think this is the one.




moXJO said:


> So far that 4800-5000 mark is our fortress wall. Will it hold all day?
> 
> Asia leading the dow?
> 
> Japan just did stimulus or something didn't they?




Sentiment tells me no, the chart tells me yes but still in a downtrend.


----------



## Garpal Gumnut (17 March 2020)

Bears are about.


----------



## PZ99 (17 March 2020)

Garpal Gumnut said:


> I believe the big four are in for a whacking.
> 
> Nobody likes them especially the politicians.
> 
> ...



https://www.aussiestockforums.com/posts/966461/

All the bastards


----------



## bluekelah (17 March 2020)

aus_trader said:


> Very interesting charts, thanks. I'd like to think optimistically as well and say we must be at or near the bottom.
> 
> Only worry is the China involvement this time. With GFC, we had an approx. 50% decline in the markets despite everyone (not me, I got haemorrhoids) cheering and high fiving how China saved Australia from a recession and things went on as nothing has happened.
> 
> ...



The only reason markets here are still somewhat stable is because relatively speaking we dont have that many cases as Europeans or USA. We are not at that stage yet. Also despite tourism and airlines and education getting hit, Iron ore prices are still at 90+USD, in fact up from 80+usd in Feb when china was first hit and had lockdown. Hasnt crashed at all unlike oil prices.

I would watch the iron ore prices as thats a really huge sector and most people will trade the AUD on that and mining may not be that big part of the economy percentage wise, but trickle down effects wise it can cause a big impact.


----------



## gartley (17 March 2020)

aus_trader said:


> I see, nice charts by the way



Thanks aust_trader.  It all starts from one line....  But as we can see even fake markets give us clues


----------



## wayneL (17 March 2020)

I, along with so many others, I thought that the can was just kicked along the road from 2008.

Supposing they managed to kick the can even further down the road this time - I'm sceptical that they can actually do it but who knows, they just might do it again -  what then?

An even bigger financial crisis somewhere further down the track?


----------



## Knobby22 (17 March 2020)

wayneL said:


> I, along with so many others, I thought that the can was just kicked along the road from 2008.
> 
> Supposing they managed to kick the can even further down the road this time - I'm sceptical that they can actually do it but who knows, they just might do it again -  what then?




There is no where  to go in my opinion. How can the government help?

Interest rates can't be dropped anymore, most countries including most of Europe and the USA are running large deficits.

Marginal businesses will go broke. There is no way to save them.
The financial system will be heavily stressed, banks will have runs, it's not going to be pretty.


----------



## SirRumpole (17 March 2020)

satanoperca said:


> "If the central banks can save the corporate debt market, then it's the GFC, if they can't its 1929."
> 95% chance we are 1929 then.
> The central banks have nothing left, zip , zero,0, they have run their course, their theories have failed.




Absolutely right, and how many small shareholders, driven into the market because of low interest rates have lost large amounts of their retirement funds due to the market crash ?

I wonder if RB governor Phillip Lowe and the rest of the RB board think about that. And how much do the government deserve a kick up the a**e for ignoring the signs (which were there even without the virus) that the economy was tanking while they concentrated on their precious surplus ?

I bet Albo and the rest of the Labs are glad they lost the election now.


----------



## sptrawler (17 March 2020)

SirRumpole said:


> Absolutely right, and how many small shareholders, driven into the market because of low interest rates have lost large amounts of their retirement funds due to the market crash ?
> 
> I wonder if RB governor Phillip Lowe and the rest of the RB board think about that. And how much do the government deserve a kick up the a**e for ignoring the signs (which were there even without the virus) that the economy was tanking while they concentrated on their precious surplus ?
> 
> I bet Albo and the rest of the Labs are glad they lost the election now.



Yes some of the suggested changes, would look pretty scary at the moment, but that is history.
Imagine if there had been $50billion poured into stimulus, in the last two years as the media have been screaming for.
How many of the companies would be geared up and no materials, while they wait to see if they have a workforce or not, it certainly would be interesting. IMO
But it is all speculation and the Government does have the money, they didn't spend, to spend now when a real crisis has hit. More luck than good judgement though.
Also IMO the handouts make everyone feel good, but in reality wont do much, people are buying plenty of medicine and food. 
I don't think they will go out to a restaurant or buy a t.v or go buy clothes. I think they will put it in the draw in case they need it.
Just my opinion.


----------



## SirRumpole (17 March 2020)

sptrawler said:


> I don't think they will go out to a restaurant or buy a t.v or go buy clothes. I think they will put it in the draw in case they need it.




Maybe, but when the COVID disaster is over, they may open the drawer and spend it in the shops that they were afraid to go to before.


----------



## sptrawler (17 March 2020)

SirRumpole said:


> Maybe, but when the COVID disaster is over, they may open the drawer and spend it in the shops that they were afraid to go to before.



Absolutely right Rumpy, I don't think money is going to sort this one out, it is dependent on how fast this thing goes through and immunity is achieved.
It is a bit like the old saying, it doesn't matter how much money you have, if you don't have your health.


----------



## PZ99 (17 March 2020)

When the cash handouts happened in 2008/9 the Libs' alternative view was to bring forward the tax cuts that were taken to the 2007 election. To be honest I'm surprised they haven't taken this path instead of copying what happened last time.

They do have other alternatives apart from cash but they are too hard and controversial but...

Bring forward more paye tax cuts
Do a deal with the states to kill payroll tax
Temporarily freeze the super guarantee - that's an immediate 10% payrise in the pocket
Do another first home buyers grant
Allow the optional release of $1000 from super as cash which won't blow the federal budget
Allow the optional release of $10000 from super to go directly into mitigating home loan debt and lower repayments.

Of course with the unwieldy way of our over-governance none of this will happen and probably won't help the sharemarket but they are alternatives to cash handouts.


----------



## greggles (17 March 2020)

PZ99 said:


> They do have other alternatives apart from cash but they are too hard and controversial but...




Raise the tax free threshold to $22,000 or even $25,000. That will give some relief to those on low incomes, part-time and casual workers and those who reluctantly participate in the "gig economy".


----------



## sptrawler (17 March 2020)

PZ99 said:


> When the cash handouts happened in 2008/9 the Libs' alternative view was to bring forward the tax cuts that were taken to the 2007 election. To be honest I'm surprised they haven't taken this path instead of copying what happened last time.
> 
> They do have other alternatives apart from cash but they are too hard and controversial but...
> 
> ...



Good points, but the reality at the moment isn't lack of money, it appears to be the lack of stock supply.
All you have suggested could and may happen, but the issue is office works has run out of gear, the mining companies are running out of gear, shops are running out of gear.
People are still working, the question is for how long.


----------



## PZ99 (17 March 2020)

greggles said:


> Raise the tax free threshold to $22,000 or even $25,000. That will give some relief to those on low incomes, part-time and casual workers and those who reluctantly participate in the "gig economy".



Yep, that works for me.

On another note about the market fall > ASIC Puts Brakes On High Frequency Trading

https://www.sharecafe.com.au/2020/03/16/asic-puts-brakes-on-high-frequency-trading/


----------



## Smurf1976 (17 March 2020)

sptrawler said:


> the issue is office works has run out of gear, the mining companies are running out of gear, shops are running out of gear.



I’m sitting in a supermarket car park right now, third one I’ve been to this evening.

I’m not hoarding, just trying to do the shopping.

A degree of substitution is necessary due to lack of stock. I’ve replaced frozen peas with corn chips and I’ve replaced fish with turkey. Such is life.


----------



## gartley (17 March 2020)

Looks like another big one setting up tonight in the US S&P Futures. This one might be the final thrust down before a rally finally sets up


----------



## tech/a (17 March 2020)

I agree I think we a very close to a period of consolidation 
Close to a bottom 
May spike a little lower at sometime.


----------



## HelloU (17 March 2020)

Smurf1976 said:


> I’m sitting in a supermarket car park right now, third one I’ve been to this evening.
> 
> I’m not hoarding, just trying to do the shopping.
> 
> A degree of substitution is necessary due to lack of stock. I’ve replaced frozen peas with corn chips and I’ve replaced fish with turkey. Such is life.



Crazy times indeed. They ran out of frozen peas before running out of corn chips ? Oh dear.


----------



## aus_trader (18 March 2020)

gartley said:


> Thanks aust_trader.  It all starts from one line....  But as we can see even fake markets give us clues



By the way your support level is holding and market up today:



Not sure how far it'll rally...


----------



## aus_trader (18 March 2020)

bluekelah said:


> Also despite tourism and airlines and education getting hit, Iron ore prices are still at 90+USD, in fact up from 80+usd in Feb when china was first hit and had lockdown. Hasnt crashed at all unlike oil prices.



It's not because Fe Ore is some magical commodity. Here is the reason, for those who are interested:



https://www.sharecafe.com.au/2020/0...-provides-new-warning-on-iron-ore-production/


----------



## aus_trader (18 March 2020)

sptrawler said:


> Yes some of the suggested changes, would look pretty scary at the moment, but that is history.
> Imagine if there had been $50billion poured into stimulus, in the last two years as the media have been screaming for.
> How many of the companies would be geared up and no materials, while they wait to see if they have a workforce or not, it certainly would be interesting. IMO
> But it is all speculation and the Government does have the money, they didn't spend, to spend now when a real crisis has hit. More luck than good judgement though.
> ...



Maybe it's good the Govt held off doing a spending spree earlier. As you guys have said it would have gone to a waste spending spree or to inflating markets that were already having hot air in them. I think the stimuli they are providing now is not a bad idea as some people in our community really need it:


https://www.msn.com/en-au/news/aust...aussie-industries/ar-BB11iN0J?ocid=spartanntp


----------



## OmegaTrader (18 March 2020)

wayneL said:


> I, along with so many others, I thought that the can was just kicked along the road from 2008.
> 
> Supposing they managed to kick the can even further down the road this time - I'm sceptical that they can actually do it but who knows, they just might do it again -  what then?
> 
> An even bigger financial crisis somewhere further down the track?




If  gov debt to GDP can be around 40% to GDP why can't it be 100% or 200% with QE  and low/neg interest rates. Stimulus Stimulus Stimulus



Knobby22 said:


> There is no where  to go in my opinion. How can the government help?
> 
> Interest rates can't be dropped anymore, most countries including most of Europe and the USA are running large deficits.
> 
> ...





Trump want almost .8-1 trillion stimulus democrats want stimulus .7 trillion stimulus also. If something goes through. Again if gov debt is 100% why cant it go higher to 200%. Central bank can monetise the debt. Don't need to pay it back today just keep the economy going.

Can the political process pump out enough stimulus at the right time is the question?




sptrawler said:


> Yes some of the suggested changes, would look pretty scary at the moment, but that is history.
> Imagine if there had been $50billion poured into stimulus, in the last two years as the media have been screaming for.
> How many of the companies would be geared up and no materials, while they wait to see if they have a workforce or not, it certainly would be interesting. IMO
> But it is all speculation and the Government does have the money, they didn't spend, to spend now when a real crisis has hit. More luck than good judgement though.
> ...




50 billion stimulus, another 50 stimulus, how about another  50 stimulus they can go all day, loans or spending or tax cuts. A second stimulus should be coming after this 17 b approx one. They can go all day if the political will is there and RBA mates are there also to monetise debt and provide liquidity if needed.

-Will stimulus be enough and how much will it counteract the downside and spillover multiplier?
-We don't have mass Corona spread by local population yet, confidence is bad now,  what will happen to confidence when it actually does?
-Who/ what organisations is going to spew up and sell assets because they need liquidity  further driving falls?
-How many will spew if asx 4800  is pushed or  2300-2400  sp500


----------



## JJADV (18 March 2020)

The real bottom will be just after company reporting.. Right now its panic and speculation, once the numbers are in, and down, the real bottom will show itself..


----------



## moXJO (18 March 2020)

OmegaTrader said:


> -How many will spew if asx 4800  is pushed or  2300-2400  sp500



Personally I'm hoping we break 4800 this week (sympathize with you poor bastard with losses though).

Hearing about the stupidity going on in the real world; I think everyone here is still  too sensible. No real panic . So we must be due to test those limits and drop down again.  
When you guys start crying for your mummy, then I might consider that we hit the bottom.

I haven't really looked at a chart since my last call though. I'll also probably buy all the way down on stocks I want.


----------



## wayneL (18 March 2020)

On the money IMO. I wonder if our nation wakes up.


----------



## OmegaTrader (18 March 2020)

wayneL said:


> On the money IMO. I wonder if our nation wakes up.




Can you please explain to me how the economy is over?


----------



## UMike (18 March 2020)

aus_trader said:


> Maybe it's good the Govt held off doing a spending spree earlier. As you guys have said it would have gone to a waste spending spree or to inflating markets that were already having hot air in them. I think the stimuli they are providing now is not a bad idea as some people in our community really need it:
> View attachment 101431
> 
> https://www.msn.com/en-au/news/aust...aussie-industries/ar-BB11iN0J?ocid=spartanntp



As a Restaurant owner prices have at times more than doubled. Customers halved. Not many will survive.


----------



## wayneL (18 March 2020)

OmegaTrader said:


> Can you please explain to me how the economy is over?



He said was the economy *as we know it*

What I interpret this to mean is that business as usual after this event will most likely not possible. There will be changes. Exactly what shape they will take I cannot predict, but there are several views from different economists out there.

I couldn't even tell you whether those changes will be positive or negative, we shall just have to see, but I am certain it will be different.


----------



## rederob (18 March 2020)

JJADV said:


> The real bottom will be just after company reporting.. Right now its panic and speculation, once the numbers are in, and down, the real bottom will show itself..



Hmmmmmmmmm
You know company reports are usually the odd month or more behind.  So whatever is reported will be comparatively good, because we are a very long way from the bottom.
If Hawke (RIP) were PM he would be convening a national industry forum to get the best possible solutions from the parties being most affected, and not relying on bureaucrats who won't lose their jobs in the downturn and have little to no idea what running a business is like in the real world.
What needs to be maintained is basic-level consumerism, so any stimulus which aims higher is going to money wasted. For example, small business tax write-offs need to be substituted for debt relief so they can try to trade through these lean times.
As I wrote very early in one of these threads, it's time to make Newstart a livable benefit for the unemployed, and it's also essential that the rules to its eligibility be dramatically revised so that those now flowing into the labour market immediately qualify and get to spend on basic living costs.
The government has been reluctant to use "recession" in their language, yet many economists have already worked out that unless the current global lockdown succeeds, as it did for China, then the medication we will be lining up for will relate to relieving depression.


----------



## bluekelah (18 March 2020)

aus_trader said:


> It's not because Fe Ore is some magical commodity. Here is the reason, for those who are interested:
> 
> View attachment 101430
> 
> https://www.sharecafe.com.au/2020/0...-provides-new-warning-on-iron-ore-production/



well there you go. 

Another big reason why gov is SO reluctant to do a shutdown. If miners stop mining, the mining ATM disappears and we are truly farked economically


----------



## aus_trader (18 March 2020)

wayneL said:


> On the money IMO. I wonder if our nation wakes up.




I think a more resilient one would be one that is not purely weighted to the banks and the couple of miners would create a diversified Australian Stock Market.


----------



## aus_trader (18 March 2020)

UMike said:


> As a Restaurant owner prices have at times more than doubled. Customers halved. Not many will survive.



I think only the businesses with good margins would be able to weather the storm.

I just noticed today Woolies have pushed the prices up on quite a lot of everyday items. Not blaming them because I don't know if their suppliers have done it, and Woolies is just passing them on... Either way it is putting more stress on family budgets and other smaller businesses with thin margins that rely on them.


----------



## OmegaTrader (18 March 2020)

wayneL said:


> He said was the economy *as we know it*
> 
> What I interpret this to mean is that business as usual after this event will most likely not possible. There will be changes. Exactly what shape they will take I cannot predict, but there are several views from different economists out there.
> 
> I couldn't even tell you whether those changes will be positive or negative, we shall just have to see, but I am certain it will be different.




hahaha
That is a great political answer.

But people have  to make decisions.
Every decision in life is a  bet.
big decisions =big bet small decision =small bet.
Financial decisions have a big impact and sometimes require big bets.
Sitting in cash is a bet that has killed real returns.If you borrow up to the hilt to buy a property that is a big bet. If you invest a large portion of your wealth in etf passively that is still a bet. Both are socially acceptable bets. But are still bets.  

If you wait for your price and put a large portion in the market that is a bet on a recovery. Recovery of confidence, earnings and stimulus

We cannot just give up and say I don't know.

No one knows because the future decisions have not been made yet.


I think what people have to decide : is this the one? Is this 1929?


1)Not the one, then buy the bargains and catch the recovery push along the debt cycle.

2)If this is the one everything that is structurally long goes down, property, stocks , money in the bank by bail in/bail out, private businesses. What use is debt if the interest is not paid back and no one wants to buy the debt.


----------



## sptrawler (18 March 2020)

OmegaTrader said:


> Can you please explain to me how the economy is over?



There is also IMO a lot of 'fat' in the economy, which came about during the mining and property boom, every tradie put prices through the roof shops were opened to absorb the slush of money coming through the economy.
When that dries up there is a lot of over capacity, in the business sector, something has to give when there is less money to go around.
The retail sector has been struggling with it for a couple of years, this is really just taking it to another level of pain, only businesses with solid underpinnings will survive.
I know an older couple in there 70's have a small business, can't sell it and are struggling to run it, sad really he is coming down with alzheimer's.


----------



## wayneL (18 March 2020)

OmegaTrader said:


> hahaha
> That is a great political answer.
> 
> But people have  to make decisions.
> ...



Sheeeit! Thanks for the sermon.

I don't disagree with you at all there. However we must make our individual analyses and make our bets as we see them.

However are we to take outright gambles, educated guesses, or calculated risks based on data?

it's a tough thing because sometimes the market has already bolted by the time the data comes out.... But we can use every bit of Intel at our disposal beforehand.

My job as an investor / trader, as I see it is trying to get ahead of the curve and the way I see it the curve is about to recurve itself.

I may be wrong, who knows. But I am extremely confident that my opinion that for Australia to prosper in the world economy going forward we must change our economy, maybe radically so.

Equally I have no confidence that we should rely on our government to lead the way here, no matter what it's pathetic ideology.

It's up to us, the plebeians, but, government actions may expedite certain courses of actions which as yet remain to be revealed.


----------



## aus_trader (18 March 2020)

OmegaTrader said:


> What use is debt if the interest is not paid back and no one wants to buy the debt.



Just to lighten the mood, I am just waiting for the interest rates to go deep into the -ve so I can start rolling it in with interest payments for taking on massive debts


----------



## wayneL (18 March 2020)

aus_trader said:


> Just to lighten the mood, I am just waiting for the interest rates to go deep into the -ve so I can start rolling it in with interest payments for taking on massive debts



Oh yeah, pay me to take on the debt for the 3mil estate my missus dreams of... I'm in! LOL


----------



## aus_trader (18 March 2020)

wayneL said:


> Oh yeah, pay me to take on the debt for the 3mil estate my missus dreams of... I'm in! LOL



You won't believe it, my missus has also been sending me hints of a home upgrade for quite a while now, seeing how other friends and family have gone for the deluxe upgrade to mansions ! They all got tempted by Zero interest rates.

No I haven't given in, I can't see how we could be any happier leveraging up to the eyeballs. Happy to be paying the mortgage on our smaller home and still have leg room if interest rates rise.


----------



## wayneL (18 March 2020)

aus_trader said:


> You want believe it, my missus has also been sending me hints of a home upgrade for quite a while now, seeing how other friends and family have gone for the deluxe upgrade to mansions ! They all got tempted by Zero interest rates.
> 
> No I haven't given in, I can't see how we could be any happier leveraging up to the eyeballs. Happy to be paying the mortgage on our smaller home and still have leg room if interest rates rise.



Right on!

I was joking about the Mrs' desires to be honest.

It's just the two of us, so what do we need? Not much more than a cottage really, well apart from a couple of stables for the nags, a veggie garden... And a fig tree if we want to be really high brow. LOL

All else is just serving the ego... Unhealthy.


----------



## Smurf1976 (18 March 2020)

OmegaTrader said:


> Can you please explain to me how the economy is over?




Not the economy as such but the recent one where Australia exports coal, gas, iron ore, "education" and tourism and buys pretty much everything else.

That's not going to work anymore, the economy as such isn't finished but that version of it is kaput and not likely to come back in our lifetime. 

The future? Manufacturing is going to be part of it almost certainly. Most students at Australian universities will have grown up in Australia, there's not likely to be much "exporting" of education going forward. Etc. A stark change from the recent past.


----------



## OmegaTrader (18 March 2020)

aus_trader said:


> Just to lighten the mood, I am just waiting for the interest rates to go deep into the -ve so I can start rolling it in with interest payments for taking on massive debts





Danish bank launches world’s first negative interest rate mortgage.

https://www.theguardian.com/money/2...-worlds-first-negative-interest-rate-mortgage

I didn't believe it at first  when someone told me last year.

lol



wayneL said:


> Sheeeit! Thanks for the sermon.
> 
> I don't disagree with you at all there. However we must make our individual analyses and make our bets as we see them.
> 
> ...




 Do you think that stimulus now and coming up will not be enough to re pump ?


----------



## OmegaTrader (18 March 2020)

Smurf1976 said:


> Not the economy as such but the recent one where Australia exports coal, gas, iron ore, "education" and tourism and buys pretty much everything else.
> 
> That's not going to work anymore, the economy as such isn't finished but that version of it is kaput and not likely to come back in our lifetime.
> 
> The future? Manufacturing is going to be part of it almost certainly.



Why won't it work anymore?
How will manufacturing in Aus come back in a globalised economy competing with second and third world countries?


----------



## Smurf1976 (18 March 2020)

OmegaTrader said:


> Why won't it work anymore?
> How will manufacturing in Aus come back in a globalised economy competing with second and third world countries?




It won't work because every country is likely to look inward at this point - the shift was already underway and this will accelerate it almost certainly.

Governments are going to need to create work, not low prices for consumer goods, and in an environment where education and tourism are stuffed that doesn't leave too many options.

What that means for the market I'm not so sure but I think there's going to be some change in what sectors are dominant going forward.


----------



## wayneL (18 March 2020)

OmegaTrader said:


> Do you think that stimulus now and coming up will not be enough to re pump ?



Maybe.... I don't really know.

But I do think that we really do need to change our economy. We really can't rely on inflating the real estate market and selling red dirt to China forever.

The sooner we become productive in different ways, value-adding etcetera, the better we can survive as a first world economy going forward.

Think about this, let's subtract real estate speculation and the minerals boom from our economy in the last 20 years, what do we have?


----------



## OmegaTrader (18 March 2020)

Smurf1976 said:


> It won't work because every country is likely to look inward at this point - the shift was already underway and this will accelerate it almost certainly.
> 
> Governments are going to need to create work, not low prices for consumer goods, and in an environment where education and tourism are stuffed that doesn't leave too many options.
> 
> What that means for the market I'm not so sure but I think there's going to be some change in what sectors are dominant going forward.




Won't tourism and education rebound after the corana virus has spread and immunity is eventually achieved?
How is Australia looking inward?
How do governments  create work?
 Stimulus, lowering rate, loans, tax cut? Isn't gov doing that now+more in future


----------



## aus_trader (18 March 2020)

Smurf1976 said:


> It won't work because every country is likely to look inward at this point - the shift was already underway and this will accelerate it almost certainly.
> 
> Governments are going to need to create work, not low prices for consumer goods, and in an environment where education and tourism are stuffed that doesn't leave too many options.
> 
> What that means for the market I'm not so sure but I think there's going to be some change in what sectors are dominant going forward.



Agree. I think we need to be innovative to be successful. We will do well with a few more CSL's, COH's etc. Hold neither but wouldn't mind getting on board at IPO stage for the next superstar if we can create any...


----------



## basilio (18 March 2020)

wayneL said:


> Think about this, let's subtract real estate speculation and the minerals boom from our economy in the last 20 years, what do we have?




3/5ths of FA.
Spot on


----------



## satanoperca (18 March 2020)

A stimulus will do nothing except give people a very very short term sugar hit, with a large national hangover, well actually it will do something, put the nation into further debt, which at some point will need to be paid back or bankrupt the country.

With the dollar at .60USD, this might benefit the education and tourism sector, but prolonged periods of no income will wiper the majority out anyway.

As for lowering the rates, that is a shoe in, will be 0% within 3 months. Which moving forward is going to cause even more issues.

Tax cut, might work, but if govnuts receipts drop, how do they provide services to the population.

This is going to get a lot worse before we can even talk about a recovery, sh--it we are only in it a few weeks, the layoffs will start in coming weeks, that is when it gets really interesting.

I am expecting unemployment to raise to 10%.

and the share to be under 4500 within 2 months


----------



## sptrawler (18 March 2020)

aus_trader said:


> You won't believe it, my missus has also been sending me hints of a home upgrade for quite a while now, seeing how other friends and family have gone for the deluxe upgrade to mansions ! They all got tempted by Zero interest rates.
> 
> No I haven't given in, I can't see how we could be any happier leveraging up to the eyeballs. Happy to be paying the mortgage on our smaller home and still have leg room if interest rates rise.



When you too have quite finished, it is my nest egg in _ve, that will be buying your McMansion.


----------



## aus_trader (18 March 2020)

sptrawler said:


> When you too have quite finished, it is my nest egg in _ve, that will be buying your McMansion.



It's bound to be tempting with -ve interest rates looming !

Looking for headlines like:
"Latest home loan paying you 2.5%pa to borrow up to $1,000,000"


----------



## basilio (18 March 2020)

Market is RS at the moment. ASX200  well under 5000  
The economics of this situation will only get worse.  We  will really have to come up with creative solutions that keep our infrastructure mostly intact and not destroy peoples lives. 
How ?


----------



## sptrawler (18 March 2020)

Smurf1976 said:


> It won't work because every country is likely to look inward at this point - the shift was already underway and this will accelerate it almost certainly.
> 
> Governments are going to need to create work, not low prices for consumer goods, and in an environment where education and tourism are stuffed that doesn't leave too many options.
> 
> What that means for the market I'm not so sure but I think there's going to be some change in what sectors are dominant going forward.



You never know, the Government either sooner or later, may have to go back to the future and demand the miners build secondary industries again, as happened in the 1960's.
They need to do that or charge them a volumetric tax on resources, so that the Government can re build secondary and tertiary industries.
This is the perfect time to re think the forward plan, I think enough offshoring has been done, to satisfy any Lima agreement.


----------



## sptrawler (18 March 2020)

basilio said:


> Market is RS at the moment. ASX200  well under 5000
> The economics of this situation will only get worse.  We  will really have to come up with creative solutions that keep our infrastructure mostly intact and not destroy peoples lives.
> How ?



Sit down, put your arms around your knees, lean well forward and kiss something goodby.


----------



## basilio (18 March 2020)

Worth rehighting Omegas find on negative interest home loans
* Danish bank launches world’s first negative interest rate mortgage *
This article is more than *7 months old*
Jyske Bank will effectively pay borrowers 0.5% a year to take out aloan

https://www.theguardian.com/money/2...-worlds-first-negative-interest-rate-mortgage


----------



## basilio (18 March 2020)

sptrawler said:


> Sit down, put your arms around your knees, lean well forward and kiss something goodby.



Nah. Just get off this crazy thread and do something useful!!

Bye !!


----------



## Dona Ferentes (18 March 2020)

basilio said:


> Market is RS at the moment. ASX200  well under 5000
> The economics of this situation will only get worse.  We  will really have to come up with creative solutions that keep our infrastructure mostly intact and not destroy peoples lives.
> How ?



buying in last 20 minutes ... up nearly 200 pts. 5050

let's see what 4:10 closes bring


----------



## moXJO (18 March 2020)

satanoperca said:


> and the share to be under 4500 within 2 months



Two monthsI'm thinking this week

I'll lose interest by two months.


----------



## Dona Ferentes (18 March 2020)

lost a hundred at close-out


----------



## moXJO (18 March 2020)

Dona Ferentes said:


> lost a hundred at close-out
> 
> View attachment 101444



Interesting day tomorrow if the dow dumps.


----------



## tech/a (18 March 2020)

Dow will test the low just as we are.
Still think we are close to a consolidation area.


----------



## Logique (18 March 2020)

tech/a said:


> Dow will test the low just as we are.
> Still think we are close to a consolidation area.



This is what the great technician has to contribute? Don't strain yourself tech/a. People out there losing money


----------



## bluekelah (18 March 2020)

aus_trader said:


> I think only the businesses with good margins would be able to weather the storm.
> 
> I just noticed today Woolies have pushed the prices up on quite a lot of everyday items. Not blaming them because I don't know if their suppliers have done it, and Woolies is just passing them on... Either way it is putting more stress on family budgets and other smaller businesses with thin margins that rely on them.




With the AUD now less than 60c to USD everything is gonna spike in price! Especially imported stuff.


----------



## bluekelah (18 March 2020)

tech/a said:


> Dow will test the low just as we are.
> Still think we are close to a consolidation area.



Virus hasnt even spiked here yet. Will spike in USA this coming 2 weeks just like Italy has done. Then Dow wil be truly farked. Aus as usual will be late to the party.


----------



## tech/a (18 March 2020)

Yes!!!

Mind you there are those who are far more qualified than I who think
We are only at the bottom of the ” J “ curve.

if we see Europe and the US with 10s of 1000s of deaths in the next few weeks
They will be right.

Pessimistic?

Maybe I’m Optimistic?


----------



## Smurf1976 (18 March 2020)

tech/a said:


> if we see Europe and the US with 10s of 1000s of deaths in the next few weeks
> They will be right.
> 
> Pessimistic?
> ...




My thinking is more that you’re half right.

A bottom is near, we get a bounce, then we go to new lows.

Just my thoughts, I could well be wrong.


----------



## wayneL (18 March 2020)

Smurf1976 said:


> My thinking is more that you’re half right.
> 
> A bottom is near, we get a bounce, then we go to new lows.
> 
> Just my thoughts, I could well be wrong.



that would be pretty typical market behaviour especially considering what is lilely to come with the next earnings season.

That's what I'm waiting for, or rather, the preceding intel.


----------



## Dona Ferentes (18 March 2020)

wayneL said:


> that would be pretty typical market behaviour especially considering what is lilely to come with the next earnings season.
> 
> That's what I'm waiting for, or rather, the preceding intel.



each time it goes down, we get more forced selling. So when it goes up, this will stop.

Hold on a minute, went up 11 % on Friday. Mmmm, where are we now, three days later? 

IMO still haven't seen panic / capitulation


----------



## sptrawler (18 March 2020)

So what has really happened, apart from the fact we are already in the doldrums, the mining hasn't been hit yet, oil and gas has.
The retail sector was already on its knees, tourism is shot, education sector is shot, Coles, Woolies and suppliers going gangbusters ATM.
Airlines shot, travel agents shot. Sections of the agricultural sector will be doing well, again may be short lived but people tend to keep eating and not the same thing over and over. 
Hopefully the news doesn't get worse, but ATM a lot of fear is factored in IMO.


----------



## wayneL (18 March 2020)

Dona Ferentes said:


> each time it goes down, we get more forced selling. So when it goes up, this will stop.
> 
> Hold on a minute, went up 11 % on Friday. Mmmm, where are we now, three days later?
> 
> IMO still haven't seen panic / capitulation



Agree.

But we have also not seen the revaluing of businesses. I think there could be some reality checks there.


----------



## explod (18 March 2020)

The increasing volatility measures sentiment which atm is fear.

Anything can happen but the signs ATM are all down.


----------



## Garpal Gumnut (18 March 2020)

I must admit that I am in the camp where I'm getting ready to buy.

Not quite today or tomorrow, but getting ready. 

gg


----------



## brookybandicoot (18 March 2020)

Smurf1976 said:


> My thinking is more that you’re half right.
> 
> A bottom is near, we get a bounce, then we go to new lows.
> 
> Just my thoughts, I could well be wrong.



Dead cat bounce


----------



## aus_trader (18 March 2020)

Smurf1976 said:


> My thinking is more that you’re half right.
> 
> A bottom is near, we get a bounce, then we go to new lows.
> 
> Just my thoughts, I could well be wrong.



What's really hard to believe is that it's been a one way move since the end of February. Where are the rallies or counter-trends ?
I would like to look at the other crashes and bear markets all the way back to the start of the century but not on a static graph but on one where you can scroll along. Is there any resource online to do that? Even if it's a line graph ?
Google graphs and other sites I looked at only goes back about 40years max. Current crash looks so steep, somewhat like the 1987 flash crash. I would like to go all the way back to 1929 crash and earlier. Is there an online resource for historical charts up to modern day ?


----------



## Logique (18 March 2020)

Logique said:


> This is what the great technician has to contribute? Don't strain yourself tech/a. People out there losing money



So tech/a, is CBA a Buy, Hold or Sell ..LT monthly


----------



## Garpal Gumnut (18 March 2020)

aus_trader said:


> What's really hard to believe is that it's been a one way move since the end of February. Where are the rallies or counter-trends ?
> I would like to look at the other crashes and bear markets all the way back to the start of the century but not on a static graph but on one where you can scroll along. Is there any resource online to do that? Even if it's a line graph ?
> Google graphs and other sites I looked at only goes back about 40years max. Current crash looks so steep, somewhat like the 1987 flash crash. I would like to go all the way back to 1929 crash and earlier. Is there an online resource for historical charts up to modern day ?



I remember seeing charts from that era either on some of the Elliot wave sites or Wyckoff sites. 

Try googling E..W.. Charts or W.. Charts and dig down into the results.

You will not find an interactive one.

gg


----------



## InsvestoBoy (18 March 2020)

aus_trader said:


> What's really hard to believe is that it's been a one way move since the end of February. Where are the rallies or counter-trends ?







> I would like to look at the other crashes and bear markets all the way back to the start of the century




I saw a chart of this on twitter somewhere recently, comparing the different drawdowns in SPX or Dow. This one is definitely pretty fast.

Welcome to 2020.


----------



## MrChow (18 March 2020)

1929:
-45% in 11 weeks.

(Only need a further -15% in 7 weeks to achieve that in 2020)


----------



## MrChow (18 March 2020)

XAO -31.2%
S&P Futures -30.4%

If we have these economic restrictions at 6 deaths in 3 weeks how are they going to be lifted before the end of Winter?  Surely in the coldest months of July / August the rate will be higher than 2 flu deaths a week and that's 5 months away still.

Can't imagine the AFL and NRL playing in 5 degrees with a deadly flu around even if it's past its peak.  Then extend that to crowds gathering at 5 degrees at night in restaurants and bars and shops after a thousand deaths in previous months it sounds riskier than now.

But how do they wait until September for things to get warmer? It might not be viable.


----------



## Smurf1976 (18 March 2020)

I thing a point being overlooked here is that this is not primarily a financial market event. It is not a redistribution of wealth but a destruction of it.

It is not comparable to the boss versus the workers arguing over pay, a situation where whatever one side loses the other gains.

It is not comparable to one person selling their shares right at the top to some other person who bought them. One loser, one winner but it's a zero sum game.

What we have here is outright destruction. Borders are shut, planes are sitting on the ground going nowhere, all sorts of businesses are shutting down or have a profound lack of customers and so on. That's not a transfer of wealth from one person to another, it's an outright loss as the economy ceases production.

There's unlikely to be a V-shaped recovery for that reason. It's not simply that the airlines aren't flying and there'll be pent up demand when they resume. Rather, it's a case that the airlines aren't flying, those who would fly are losing their current and/or future income, and there's going to be a lot of fear for quite some time to come. Much the same in every other industry - it's destruction far more than it's redistribution.

Particularly troublesome will be if it comes to the point that not only is production not happening but the means of production is lost. Think in terms of airlines going bankrupt, oil wells shut and their owners bankrupt and so on. To the extent that occurs, even a U-shaped recovery becomes more drawn out if it's no longer a case of climbing back up the ladder but of having to first build a new ladder in order to do so.

The fall is incredibly rapid but the whole thing is going to play out over an extremely long time that's almost certain. Pick any democracy anywhere in the world - the next election is going to be about putting people back to work and keeping a roof over their head and food on the table in the meantime.

As for the market - well I won't try and pick bottoms other than saying we're due for a bounce but there's going to be a lot more bad news once the true scale of infection and unemployment is reflected in bona fide statistics. So a bounce then down is my guess.


----------



## MrChow (19 March 2020)

At 3am:

U.S -30.0%
Aus -29.1%

Seems like we're waiting for stuff to happen before setting off for the next decile.

My prediction is we'll top out at -39% at outbreak / quarantine peak in the U.S.

Sharp recovery of +25% where Trump declares victory and maybe even reelected if timing is good.

But think there's a strong possibility that'll be just the first act - high risk of secondary flu season wave and bankruptcies to elongate the bottom timeline into 2021.


----------



## frugal.rock (19 March 2020)

brookybandicoot said:


> Dead cat bounce



The cat is bouncing, but it ain't dead.
Can't you tell?
It's the wriggliest dead cat I ever seen, if so...


----------



## bluekelah (19 March 2020)

MrChow said:


> At 3am:
> 
> U.S -30.0%
> Aus -29.1%
> ...




We still have populous nations in south America, India and African subcontinents that havent had a peak in the virus yet. Likely more carnage when they do. 

Plus currency crisis from all the money printing hasnt even started. Not to mention a credit crisis in USA or China


----------



## MrChow (19 March 2020)

SP500 makes a new low at 2351.

Key level if you look at the chart.

Also oil is $22 lowest price in 17 years.


----------



## Smurf1976 (19 March 2020)

frugal.rock said:


> The cat is bouncing, but it ain't dead.
> Can't you tell?
> It's the wriggliest dead cat I ever seen, if so...




Cat is using a special contraption to determine the direction of the market:




Conclusion thus far is that it's worth at least $1.


----------



## MrChow (19 March 2020)

Sleeping until -50%


----------



## aus_trader (19 March 2020)

InsvestoBoy said:


> I saw a chart of this on twitter somewhere recently, comparing the different drawdowns in SPX or Dow. This one is definitely pretty fast.
> 
> Welcome to 2020.





Wow, shocking similarity to 1929 crash so far...


----------



## aus_trader (19 March 2020)

MrChow said:


> SP500 makes a new low at 2351.
> 
> Key level if you look at the chart.
> 
> Also oil is $22 lowest price in 17 years.




OMG, this is really bad news for US shale Oil producers !




Their production cost is way higher than US$22 bucks a barrel. I read somewhere that Trump may support the shale producers to stay afloat with either lower taxes (or no taxes) or rescue packages or Tariffs on Oil imports etc. But how long can he save them for?

We've seen all the taxpayer money wasted on the Auto manufacturing industry in Australia, trying to keep that afloat while it was bleeding money and eventually met it's fate.


----------



## qldfrog (19 March 2020)

sptrawler said:


> Sit down, put your arms around your knees, lean well forward and kiss something goodby.



You remember the kind of welcome Turnbull got with its entrepreneur push, from both the left: entrepreneurial means no union, small agile business, capitalism at itsbest so bad for labour...
And a similar reception from the right....as big business do not want future competition and liked the status quo....
I have hammered this for more than a decade on ASF, but look at Chile and Argentina, this is our sad and lame future


----------



## tech/a (19 March 2020)

Logique said:


> So tech/a, is CBA a Buy, Hold or Sell ..LT monthly
> View attachment 101446





Don’t think anything is a buy until this pandemic is under control 
By vaccine or cure.
Removal of restrictions.

until then short indexes


----------



## aus_trader (19 March 2020)

qldfrog said:


> You remember the kind of welcome Turnbull got with its entrepreneur push, from both the left: entrepreneurial means no union, small agile business, capitalism at itsbest so bad for labour...
> And a similar reception from the right....as big business do not want future competition and liked the status quo....
> I have hammered this for more than a decade on ASF, but look at Chile and Argentina, this is our sad and lame future



I think you are right and I think we've been pampered and over stimulated and people have come to expect it.
I kind of like the tough medicine being delivered although it's a bit hard to swallow for a spoilt society. Only problem is every candidate is after the votes so will do anything to get it from handing out stimulus, cut rates to nothing, insulation schemes, solar schemes, giving baby bonuses to parenting leave etc. Unfortunately we don't have anyone like the Iron Lady Margaret Thatcher to administer the tough medicine.


----------



## Dona Ferentes (19 March 2020)

it took until 1931 for Andrew Mellon to write these words for President Hoover



> "_Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people._”




- not a happy time.


----------



## tech/a (19 March 2020)

Giving people $750 is just plain stupid.

Put all that money into test kits and Vaccine/cure development.
-----------Short sighted.
There is no way you'll stimulate an economy that has the 
restrictions and job losses both now and pending due to
this pandemic.

*In my view* the quickest way to stimulate it is to direct 
everything into finding a cure/vaccine/increased Testing
and social isolation until this happens. Throwing money at
it is like throwing toilet paper on a fire.

Achieves NOTHING.
Other than *a false sense* of "We are not being forgotten" 
from the masses who will just buy $750 of* Dunny roll.*


----------



## InsvestoBoy (19 March 2020)

MrChow said:


> XAO -31.2%
> S&P Futures -30.4%




You keep posting these % fall comparison numbers but they are completely invalid comparing apples and oranges.

Firstly, the sector composition is quite different and secondly they are priced in two different currencies!

FWIW the XJO is down ~30%, the SPX priced in AUD is only down ~20%.


----------



## sptrawler (19 March 2020)

Dona Ferentes said:


> it took until 1931 for Andrew Mellon to write these words for President Hoover
> 
> 
> 
> - not a happy time.



Good post Dona IMO.
Sometimes the reset button does need pushing, especially in the capitalist system,otherwise the gap between the haves and the have nots gets too wide. 
The gap will always be there and it is a bit like an elastic band it gets stretched so far, then it twangs back and so the process repeats.
Everyone has been saying, how is the post GFC money printing asset bubble going to deflate, well this could well be the 'pop'.
Just my thoughts.


----------



## Dona Ferentes (19 March 2020)

sptrawler said:


> The gap will always be there and it is a bit like an elastic band it gets stretched so far, then it twangs back and so the process repeats.
> 
> Just my thoughts.



your _"Allow for the worst, hope for the best" _is a neat encapsulation of how we should 'manage' things. The Mellon quote is memorable because of its extreme position-taking. But it took two years for such a view to be put and not shot down. The Dantean descent, indeed.

Market's up today, at open. RBA extraordinary meeting today likely to have a further interest rate drop (useless) and QE buying of Govt bonds to introduce cash to the system.

Eventually we'll have a social wage for all (NewStart); lets call it FreshStart


----------



## Dona Ferentes (19 March 2020)

Today's action: slipper, dipper, by no means a ripper today (except as a shredder)


----------



## Dona Ferentes (19 March 2020)

RBA at 2:30 ?  can't see it!


----------



## Garpal Gumnut (19 March 2020)

Logique said:


> So tech/a, is CBA a Buy, Hold or Sell ..LT monthly
> View attachment 101446



It would be nice to see some volume although I've looked at a 10 year chart and it didn't help me.

It looks like a descending triangle from 2014 about to break down now. It's one of the stronger signals as is the fact it has been range-bound since 2016 and a break down is even stronger indication of further falls.

I'd not buy CBA yet.

The fall is often commensurate with the range which puts CBA at $50 which is support and resistance 2010 to 2013. 

Next buy level if it breaks through that is $30 which again earlier was support and resistance. 

Thanks for putting the chart up.

gg


----------



## qldfrog (19 March 2020)

You all know I am more a permabear but I did compare historic XAo (and approximate before 1950 to population growth since the 50s:


I see a reasonable level for xao around 5500 so we are probably now undervalued.Yes..I say that 
This does NOT mean the market will not go lower but it means it makes sense IMHO to start reinvesting for those who went out before that crash.Obviously taking the actual virus into consideration..Virgin might be a good price but .....


----------



## matty77 (19 March 2020)

What happens when a recession is announced? What happens when companies start downgrading forecast or going broke? I still think there is PLENTY of downside coming up. The market has priced in fear so far, the facts, actual numbers and bad news from companies will turn up in another month or two then its going to plummet. OR it goes up... whos to say.


----------



## Garpal Gumnut (19 March 2020)

LLC illustrates well on the chart how we should be looking at trading the XAO.

Intraday traders should go Daily
Daily traders should go Weekly.
Weekly traders should go Monthly ......

I'm awaiting LLC to test $6.70, but it will take a time with bull traps to get there imo.

Possibly in the channel outlined in the attached 10 year monthly chartchart. Who knows?
	

		
			
		

		
	




gg


----------



## sptrawler (19 March 2020)

matty77 said:


> What happens when a recession is announced? What happens when companies start downgrading forecast or going broke? I still think there is PLENTY of downside coming up. The market has priced in fear so far, the facts, actual numbers and bad news from companies will turn up in another month or two then its going to plummet. OR it goes up... whos to say.



Always remember, not all companies will go broke, the trick is only investing in those that dont.
Some will look cheap and some will be cheap.
Buy wisely, not just on price, opportunity knocks.


----------



## MrChow (20 March 2020)

-30% has more or less priced in a recession.

It's just a matter of whether it's one of those historic ones like 1929, GFC, Dot Com.


----------



## matty77 (20 March 2020)

sptrawler said:


> Always remember, not all companies will go broke, the trick is only investing in those that dont.
> Some will look cheap and some will be cheap.
> Buy wisely, not just on price, opportunity knocks.




Yup I agree lots wont go bust but plenty still will.

Opportunity knocks for sure.


----------



## InsvestoBoy (20 March 2020)

aus_trader said:


> What's really hard to believe is that it's been a one way move since the end of February. Where are the rallies or counter-trends ?
> I would like to look at the other crashes and bear markets all the way back to the start of the century but not on a static graph but on one where you can scroll along. Is there any resource online to do that? Even if it's a line graph ?
> Google graphs and other sites I looked at only goes back about 40years max. Current crash looks so steep, somewhat like the 1987 flash crash. I would like to go all the way back to 1929 crash and earlier. Is there an online resource for historical charts up to modern day ?





Found the US comparison I was mentioning earlier:


----------



## kid hustlr (20 March 2020)

Why is there multiple in 1931 ?


----------



## gartley (20 March 2020)

Have decided to jump in and get my feet wet. This market has completed a nice impulse down. Time and price have come together here. 34% decline ( as in fibonacci number 34). has fallen in 62 ( as in 61.8%) 2hr bars.


----------



## Porper (20 March 2020)

Your wave count at all degrees is almost the same as mine. I am still in cash though as I am not convinced wave-5 is locked in. It is truncated in both time and price compared to wave-1. Nice Fib confluence though so who knows. 

I would like one final blow-off to get rid of all the weak hands.


----------



## gartley (20 March 2020)

Porper said:


> Your wave count at all degrees is almost the same as mine. I am still in cash though as I am not convinced wave-5 is locked in. It is truncated in both time and price compared to wave-1. Nice Fib confluence though so who knows.
> 
> I would like one final blow-off to get rid of all the weak hands.



Hello Porper, long time no see, good to here from you!
Yes, likewise I would like to see one last thrust down ( and it may yet still come), but because time and price have come togther here and I have a buy signal on my daily cycles routine attached I have decided to jump in for now. I figure that even if wrong, and impulse still not complete, we will at least get a 10 to 13% rally here if another last leg down decides to come


----------



## Porper (20 March 2020)

You make a very good point regarding getting involved...even if a bounce only unfolds.

Taking on low risk trades is a great strategy when a potential turning point is hit. Small gains and losses is part and parcel of trading. It also allows you to be on board if a significant low is locked in.

There is nothing worse than watching the market rally hard when you are sitting on the sidelines !!


----------



## aus_trader (20 March 2020)

gartley said:


> Have decided to jump in and get my feet wet. This market has completed a nice impulse down. Time and price have come together here. 34% decline ( as in fibonacci number 34). has fallen in 62 ( as in 61.8%) 2hr bars.




Something is suspicious about the attached graph you posted. Does the indicators re-paint ? Surely they cannot predict the future ? !


----------



## Smurf1976 (20 March 2020)

California, including Los Angeles, has been ordered into full lockdown. Significance in this context is that LA is one of the most well known cities globally.

US stock futures not showing any real response and the ASX is up a bit today. Oil's up too as are some more speculative things like Bitcoin. 

Seems that the market has stopped selling off in response to bad news. If that continues then it looks like a short term bottom may be at hand?


----------



## Dona Ferentes (20 March 2020)

started OK but found it hard to hold the upkick today


----------



## gartley (20 March 2020)

aus_trader said:


> Something is suspicious about the attached graph you posted. Does the indicators re-paint ? Surely they cannot predict the future ? !
> 
> View attachment 101521



To answer your question I have run the charts on the day after the peak in the market. Do they repaint? In this instance: NO. Do they ever repaint: YES but not by much, and I have done a statistical analysis and they repaint approx 14% of the time. As you said, no one can predict the future. Thes indicators are cycles based, and I have used the lowest lag filter I can find for ther Trend Indicator the Hull. Having said that, the Hull is not actually a zero lag filter and I used an 8 period offset to centre it. That's still 8 periods of lag which is much better than 43 periods when using a simple MA for an 86 period average. From the remaining 8 data points I have created an estimate by way of an algorithm.
The signal FT I am using a weighted MA but it's offset by only 3 bars, so it's even better.  Both these are not the holy grail, and they don't always time the market as well, but in this intance the maket had reached +3 standard deviation from the nominal pink line which is statistically an extreme point on the daily chart and coupled with the signals it was obviously as sell, especially when the same conditions where apparent on the weekly chart.  The trend indicator suggests the trend, the signal FT is for entries and exits within that trend. So I just follow the buys and sells that are generated...


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## aus_trader (20 March 2020)

gartley said:


> To answer your question I have run the charts on the day after the peak in the market. Do they repaint? In this instance: NO. Do they ever repaint: YES but not by much, and I have done a statistical analysis and they repaint approx 14% of the time. As you said, no one can predict the future. Thes indicators are cycles based, and I have used the lowest lag filter I can find for ther Trend Indicator the Hull. Having said that, the Hull is not actually a zero lag filter and I used an 8 period offset to centre it. That's still 8 periods of lag which is much better than 43 periods when using a simple MA for an 86 period average. From the remaining 8 data points I have created an estimate by way of an algorithm.
> The signal FT I am using a weighted MA but it's offset by only 3 bars, so it's even better.  Both these are not the holy grail, and they don't always time the market as well, but in this intance the maket had reached +3 standard deviation from the nominal pink line which is statistically an extreme point on the daily chart and coupled with the signals it was obviously as sell, especially when the same conditions where apparent on the weekly chart.  The trend indicator suggests the trend, the signal FT is for entries and exits within that trend. So I just follow the buys and sells that are generated...




I think it's the offsets you use with the indicators that seems to give the illusion that the indicator is ahead of the price. Nevertheless I am impressed by how you have constructed those indicators


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## gartley (20 March 2020)

aus_trader said:


> I think it's the offsets you use with the indicators that seems to give the illusion that the indicator is ahead of the price. Nevertheless I am impressed by how you have constructed those indicators



It's not always ahead of price, it can lag by in sync or be ahead. The weakness in the approach is in slow grinding markets. It's also very important to run the data 15 to 20 mins before the daily bar closes. You will notice on the frst chart I posted the Trend indicator has not given a trend change signal yet, but the signal FT is on a buy. This suggests the downtrend still persists, and that is not to say it will not change next week, but for now I am under the assumption the current rally is a counter trend until proven otherwise. The MM strategy for this is take 50% profit when the price moves to what the ATR value was when I took the trade, and then move the SL to break even for the remainder.


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## nathan02 (21 March 2020)

Hi gartley I am new to the game and gathering an understanding. Assuming your watching the American markets, do you believe we will hit 5400+ on the all ords come Monday mirroring off the day they have today?


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## gartley (21 March 2020)

VIX is down sharply (18.5%) in US session so it looks like this rally is for now but let's see how the rest of the session pans out. I hope we get some follow through in the rally that started yesterday in the ASX. As said in earlier posts it looks like we completed an impulse wave down, but not 100 % sure on that because my biggest weakness with EW was 3rd and 5th waves terminus. In actual fact I hope this rally is only a wave 4 and we get one last push lower because it will set up really nicely on some gold stocks which I have been eyeing.


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## OmegaTrader (21 March 2020)

InsvestoBoy said:


> Found the US comparison I was mentioning earlier:





https://www.nasdaq.com/articles/des...kets-are-doing-what-theyre-best-at-2020-03-19


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## Logique (21 March 2020)

I think Garpal's scenario in post #17 above is very possible.
I think sub-5,000, it's starting to be _very_ attractive to the big investment houses and fundies.
LT chart with my edits - between 5,000 and 4,000 it's a much stickier TA zone, as GG hints:


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## gartley (21 March 2020)

Some of these lines on these charts go back 33 years. If we slice through them next week we are well and truly in unchartered territory.


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## MrChow (21 March 2020)

Matching US GDP losses to Stock losses:

Year: GDP Loss = Stock Loss
1929: 26% = 86%
1937: 18% = 54%
1945: 12% = 26%
2008: 5% = 56%
1973: 3% = 48%
1958: 3% = 20%
1980: 2% = 17%
1953: 2% = 14%
1981: 1% = 27%
1949: 1% = 20%
1990: 1% = 20%
1960: 1% = 13%
2001: 0% = 49% (But valuation at highest Shiller PE ever)
1969: 0% = 36% (But valuation at highest Shiller PE since 1929 at the time)

So 1 main factor with 1 secondary to explain outliers.


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## OmegaTrader (22 March 2020)

MrChow said:


> Matching US GDP losses to Stock losses:
> 
> Year: GDP Loss = Stock Loss
> 1929: 26% = 86%
> ...



What is the forecast of gdp fall for this one??
What is a good PE/ CAPE to buy at, given rates are also basically 0 ?


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## Smurf1976 (22 March 2020)

OmegaTrader said:


> What is the forecast of gdp fall for this one??



According to media reports Goldman Sachs is currently forecasting a 24% GDP loss for the US.

It's fair to say that it's a moving target though given the overall situation.


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## Smurf1976 (22 March 2020)

gartley said:


> Some of these lines on these charts go back 33 years. If we slice through them next week we are well and truly in unchartered territory.



Looking at the Australian market I note the low on an intraday basis in early 2016 was just under the low seen on Thursday this week.

XJO - 4706.7 in 2016 versus 4741 on Thursday. 
XAO - 4762.1 in 2016 versus 4768.7 on Thursday.

Anything below that previously requires going back to 2013 with a low on the XAO of 4632.30 in June of that year. Next one back is 4334.3 in 2012.

I'm not convinced from a fundamental perspective that the actual bottom would be at this point, the real economy in 2020 is going to be drastically worse than anything experienced in 2016 or even 2008-09 during the GFC, but possibly a rally from there?

All figures are intraday lows for the XJO.


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## Smurf1976 (22 March 2020)

MrChow said:


> Matching US GDP losses to Stock losses:




At the risk of causing some alarm, if the 24% GDP loss forecast is correct then looking at 1929 and 1937 suggests an S&P500 bottom of about 745. That's 745, three digits there's nothing in front of it.

Incidentally that isn't far from the lows seen post-GFC.


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## basilio (22 March 2020)

Smurf1976 said:


> At the risk of causing some alarm, if the 24% GDP loss forecast is correct then looking at 1929 and 1937 suggests an S&P500 bottom of about 745. That's 745, three digits there's nothing in front of it.
> 
> Incidentally that isn't far from the lows seen post-GFC.




As far as I can see traditional market based GDP will collapse to Depression levels have have States of Emergency with all non essential business closed down. The difference between then and now is Governments intention to keep busineses and people surviving  the crisis and capable of restarting without a complete crash.

I think this is the best option but I can't quite grasp how financial markets an in particular debt market are going to cope with this. I can see thousands of  debts and rollovers unable to be paid. Perhaps a suspension of these payments for the time of the crisis ?


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## J1eyed (22 March 2020)

basilio said:


> I think this is the best option but I can't quite grasp how financial markets an in particular debt market are going to cope with this. I can see thousands of  debts and rollovers unable to be paid. Perhaps a suspension of these payments for the time of the crisis ?




They can't cope, taxpayers will be picking up the bill. I really hope governments take equity as part of their bailout packages. But I doubt it.


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## OmegaTrader (22 March 2020)

J1eyed said:


> They can't cope, taxpayers will be picking up the bill. I really hope governments take equity as part of their bailout packages. But I doubt it.





J1eyed said:


> They can't cope, taxpayers will be picking up the bill. I really hope governments take equity as part of their bailout packages. But I doubt it.



Can you explain why this will happen?

1) Aus gov stimulus is now at 10% of gdp 
2) why cant stimulus be 20,30,40% gdp
3) The aim is not to bail out but to keep the economy going around
4) why will policy makers let this happen?


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## Smurf1976 (22 March 2020)

OmegaTrader said:


> why cant stimulus be 20,30,40% gdp



At some point there needs to be a real economy producing things not just government printing money.

I don't know where the limit is but there must be one. Eg it wouldn't work at 100% that's obvious so there's a limit in there somewhere.


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## sptrawler (22 March 2020)

OmegaTrader said:


> Can you explain why this will happen?
> 
> 1) Aus gov stimulus is now at 10% of gdp
> 2) why cant stimulus be 20,30,40% gdp
> ...



Maybe it is designed to keep those businesses that are viable going, while those that are not viable, do not reappear after this is over.


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## moXJO (22 March 2020)

Worse case scenario seems to have started.


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## zaxacel1975 (22 March 2020)

Any thoughts on what the market does tomorrow if we announce a lockdown tonight?


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## OmegaTrader (22 March 2020)

Smurf1976 said:


> At some point there needs to be a real economy producing things not just government printing money.
> 
> I don't know where the limit is but there must be one. Eg it wouldn't work at 100% that's obvious so there's a limit in there somewhere.






sptrawler said:


> Maybe it is designed to keep those businesses that are viable going, while those that are not viable, do not reappear after this is over.






moXJO said:


> Worse case scenario seems to have started.




1)The stimulus is only to help with the virus temporarily
2)High probability virus economic impact will eventually diminish to negligible
3) High probability people will spend, work and travel again

My real question is really directed to the numerous people who are saying it is 1929 chicken little chicken little.

Its easy to say this is the end everything is 90% down the property market will crash etc.

I cant seem to understand why or how this will happen.
If someone can just give a rational explanation of how it will happen.

How will this temporary virus lead to a deleverage.


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## Sdajii (22 March 2020)

zaxacel1975 said:


> Any thoughts on what the market does tomorrow if we announce a lockdown tonight?



I'm seeing government videos telling Australians they need to accept they will be giving up their human rights and freedom and they need to just accept it and trust the government. I'm hearing governments around the world are saying this. The world is just about under house arrest.
I wouldn't be surprised if the market doesn't open tomorrow, but if it does there will either be some funny business or it's going to be ugly.


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## moXJO (22 March 2020)

OmegaTrader said:


> 1)The stimulus is only to help with the virus temporarily
> 2)High probability virus economic impact will eventually diminish to negligible
> 3) High probability people will spend, work and travel again
> 
> ...



Sorry, I mean worse case for businesses.
Stimulus is not going to save them unless it only shuts down a week. Some rents are enormous along with other costs. The flow on effects of unemployment, missed debt payments,  The list is numerous.

Should be a slaughter on the market tomorrow imo. Dow was already down on Friday so sentiment was already shitey.


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## IFocus (22 March 2020)

OmegaTrader said:


> 1)The stimulus is only to help with the virus temporarily
> 2)High probability virus economic impact will eventually diminish to negligible
> 3) High probability people will spend, work and travel again
> 
> ...




Locking down populations for an unknown time frame worldwide for possibly up to and beyond 12 to 18 months,  never been done before lots of unknowns along with when it all ends. 

Yes high probability in fact certainty  of it all ending but no one and I mean no one knows what that looks like.


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## IFocus (22 March 2020)

zaxacel1975 said:


> Any thoughts on what the market does tomorrow if we announce a lockdown tonight?




I think the market will price it in regardless of when the announcement is made.


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## satanoperca (22 March 2020)

Sdajii said:


> I'm seeing government videos telling Australians they need to accept they will be giving up their human rights and freedom and they need to just accept it and trust the government. I'm hearing governments around the world are saying this. The world is just about under house arrest.
> I wouldn't be surprised if the market doesn't open tomorrow, but if it does there will either be some funny business or it's going to be ugly.



And donald thought he could play the trade game. The chinese govnuts will be laughing at the end of this at dumb western societies.
Let the games begin.


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## Sdajii (22 March 2020)

satanoperca said:


> And donald thought he could play the trade game. The chinese govnuts will be laughing at the end of this at dumb western societies.
> Let the games begin.




Their plan is unfolding well, they're probably pleased at this point, but I'm guessing they're not yet complacent. Assuming the rest of the world doesn't just submit, there will be retaliation and it'll get much worse.

This isn't about a virus.


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## aus_trader (22 March 2020)

J1eyed said:


> They can't cope, taxpayers will be picking up the bill. I really hope governments take equity as part of their bailout packages. But I doubt it.



Wouldn't shareholders be screwed if they start touching the equity of companies ?


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## Smurf1976 (22 March 2020)

IFocus said:


> I think the market will price it in regardless of when the announcement is made.



With so many things now cancelled or shut a formal lockdown is fast becoming a technicality anyway.


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## OmegaTrader (22 March 2020)

4800 support

Fall


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## Smurf1976 (22 March 2020)

OmegaTrader said:


> My real question is really directed to the numerous people who are saying it is 1929 chicken little chicken little.
> 
> Its easy to say this is the end everything is 90% down the property market will crash etc.
> 
> ...




According to a previous post (#309), GDP loss in 1929 was 26%.

Various estimates already put GDP loss in 2020 at a comparable order of magnitude. Goldman Sachs says 24%, others have differing figures but nobody's saying 1% or 2%, we're looking a big number most certainly.

A particular difficulty is that when this all ends, when the lockdowns are lifted, two basic problems arise:

1. Many businesses will likely have failed given a significant period of zero income meanwhile costs continue to be unavoidably incurred.

2. A large portion of consumers have lost money either due to financial market declines, loss of paid employment or loss of business profits.

3. Governments will have truly astounding debt levels. That's going to have an impact somehow.

End result is that consumers have less money to spend and less to spend it on. There's the ongoing GDP drop which will take quite some time to recover from.

Even if someone could fly from Melbourne to London on the 1st of October 2020, there's not going to be too many people who have any interest in doing so unless the flights and accommodation are stupidly cheap. Most are going to be trying to restore their own investment balances, businesses or employment at that point, they're not going to be spending on non-essentials like major holidays indeed may workers won't have any leave available anyway.

Now consider that every other non-essential industry faces some degree of the same impact. Nobody who loses their job or sees their business run into serious difficulty decides that now's a good time to renovate the kitchen and buy a new car for example.

I have no crystal ball, I could well be wrong, but given the scale of impact it seems like this is going to take a very long time to recover from.

Take the 1991 recession for example. It might have ended in 1991 but it was still very much doom and gloom several years later in the real economy. The recession was still a major factor in politics 5 years later and it wasn't until about 1998 when there was widespread confidence once again.

The ASX spent a full decade getting back to 1987 levels and more recently it took 12 years to regain the 2007 high. For that matter the high of January 1970 wasn't reached again until September 1979 and the 1937 high wasn't regained until 1945 and the 1951 high wasn't seen again until 1958 so there's plenty of examples of the market taking close to a decade to recover.

So to the extent that anyone's pessimistic, they're really only looking at the past and noting that other such hiccups took quite some time to recover from and are assuming this one will be at least as bad given the severity of the downturn.

I do acknowledge of course that I could be completely wrong. All I'm doing here is comparing to past market tops and recessions and noting that they all took many years to resolve and assuming that this one would do much the same. That's no guarantee....


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## OmegaTrader (23 March 2020)

Smurf1976 said:


> According to a previous post (#309), GDP loss in 1929 was 26%.
> 
> Various estimates already put GDP loss in 2020 at a comparable order of magnitude. Goldman Sachs says 24%, others have differing figures but nobody's saying 1% or 2%, we're looking a big number most certainly.
> 
> ...




This is the political choice don't rack up debt ,let the economy fail and have 25% unemployment or rack up the debt and create a future crisis down the road.

I think the mantra of whatever it takes will take hold.

The only way I see 1929 is if the gov is overwhelmed and the real economy effects leak into the credit market, especially the housing market, sending the banks under etc.

Can the gov spend 24% gdp to offset the big drop ? Is the political will there?
Aus debt to gdp is approx 40%,the gov can run the entire economy for 1.6 years/160% debt increase if they choose too.
All will be bought by the RBA.

A simplified example,
Say the effect is negative gdp growth 25% each year for 2 years. Why cant the gov just spend 25% of gdp each year by debt.

For the problems
1)Stopping business failing the second stimulus is a current example

2) Unemployment and gov programs can offset some consumer loses

3) Like the US deficit  "This is not the time to worry about the deficit" US treasury Secretary Steven Mnuchin

I agree that there will be pain .It will take time to come back,confidence is fickle and unpredictable.

I think the way I frame it is, do the animal spirits and liquidity stress of forced sellers push the market low enough to create a bargain for what you are really buying. You are really buying earnings in perpetuity. Some companies go under, some do well. But earnings for price is the fundamental game. The Chart and sentiment/news are other games.

My two cents on the recent price is that alot of participants were long at 4800 mark as the support from the past charts show. The news will probably overwhelm them next week and some will have to spew up further driving falls. I don't know what fundamental participants are thinking but they will sure be thinking that revenues falling will drop value and panic is still there to drop price, unless there is some kind of deep value play known inside out.
The sentiment is still overwhelmingly bad right now, I don't know how to quantify that is really just a subjective opinion.


What is a bargain if you think that earnings will recover eventually
PE 10? At PE 5 it would be a bargain of the century literally.

Right now say PE 15 , that is assuming earnings stay the same, that is 6.66% return with all of the downside risk. How can that be a good fundamental return? It could be a trade but not a good investment in my opinion.

I would be interested in some fundamental investors explaining what they are thinking right now?


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## aus_trader (23 March 2020)

All I can say is, Earnings can be revised down. So what is a bargain right now (based on historical Earnings) may not be a bargain if the Earnings are revised down in the near future.


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## pozindustrial (23 March 2020)

Old dude here playing with super funds. Was skittish last year moving between investments, bonds and cash. Got lucky holding cash when the market dropped and put 50% in on March 18. I had recognised that in past recessions there seemed to be two drops, one low after 2wks (3wks this time) and another after 2 mths I believe for psychological reasons. So I have my fingers crossed for another  low in 4 wks.


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## Dona Ferentes (23 March 2020)

another day, and down again, though some tentative but not convincing recovery from the initial sell-off. The close was orderly


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## Craton (23 March 2020)

FWIW
With the All Ords etc repeatedly cracking new highs (was it really only in Feb?) against relatively low growth, consumer sentiment and the growing COVID threat, IMHO the writing was on the wall for a tanking in the markets. I managed to bail out of or reduce stocks around the peak so have plenty of dry powder to fire off. Without a bottom in sight though, those triggers are fairly locked down much like our state borders are becoming. 
The extent of the sell off/bear market remains to be seen with all eyes on how much the virus impacts the rest of the globe in the coming days, weeks, months. Although like I always do anyway, will continue to add to the long term, divvy payers I hold.


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## Smurf1976 (23 March 2020)

Dona Ferentes said:


> another day, and down again



That the market has gone straight through prior lows and other logical support points without even flinching is what's most alarming. The left hand side of the chart and any analysis based on it may as well not exist at the moment it seems.


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## Smurf1976 (23 March 2020)

I note that for the US markets, total market cap / GDP reached an extreme just prior to the crash and that to get back to something that would be a plausible low would require at least a 50% decline and that's without any contraction in GDP.

If the forecasts of a circa 20% GDP drop are correct (Goldman Sachs is forecasting 24% for the US, others seem broadly similar) then that would require a minimum 60% nominal fall from the peak. So somewhere around 1350 for the S&P 500.

Looking at this, and considering what's going on in the real economy, the market would seem to still be far too high for this to be a major bottom. A temporary bottom from which a rally commences perhaps, but not the ultimate low.

Note this is referring to the US marker but much the same for Australia:


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## hja (23 March 2020)

Still looking for pasta out there....



But am long lettuce (iceberg) - saw it for $8.10


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## InsvestoBoy (24 March 2020)

Smurf1976 said:


> Note this is referring to the US marker but much the same for Australia:




Not the same for Australia, please post supporting data.

 Most recent GDP figures for Q4 2019 put annual GDP at $1,994,874,000,000.

The most recent total market cap figure on the ASX from Feb is $2,026,292,000,000.

Assume Q4 2019 GDP number will be steady for Q1 2020 (let's say we grew in Jan+Feb and wiped out in Mar because of slow Gov response).

That puts TMC/GDP in Feb at 101%

All Ordinaries, as a crude proxy for TMC has declined 29.4% since end of Feb.

That puts TMC/GDP currently at 75%.

Now the TMC number comes from the ASX and assumed to be reliable. GDP comes from ABS but RBA also has their own copy of the data. So the "TMC/GDP" value depends a lot on how you calculate GDP. I used sum of last four quarters of "Gross national income: Current prices" numbers from the ABS to calculate above, but they themselves use "Gross domestic product GDP, Chain volume measures - Annual" which is slightly different. I notice you posted GuruFocus chart, they seem to use a different number for both GDP and TMC (WorldBank) which makes the chart look different.

My chart (up to Q4 2019)



GuruFocus, imputed to current using ASX300:



Some disagreement there about numbers, that is fine, the point is that neither shows valuations as measured by TMC/GDP to be "much the same for Australia", in fact both would show the current price as cheaper (by this valuation metric) than both GFC lows and tech bust lows.

That, of course, is based on the assumption of Q1 2020 GDP being flat against Q4 2019 GDP. GDP is notoriously revised a lot over the years so make of that assumption what you will, maybe all of 2019 GDP numbers will get revised lower over time.

Siblis Research purports to carry Shiller CAPE ratio for many countries. I don't have access to their private dataset but you can see a 5 year sample on their site: https://siblisresearch.com/data/cape-ratios-by-country/

The most recent reading they have up there is from June 2019 is a CAPE ratio of 17.94. You can imagine two Q of earnings data falling off the back of that series and two Q of earnings being added to the front since then. Probably since then the denominator hasn't changed all that much. If we impute a 34% decline in the All Ordinaries since end of June 2019, and assuming the cyclically adjusted earnings denominator is unchanged, we could say the CAPE might be something like 11.

Star Capital, a German fundie, tracks CAPE ratios (and other valuation metrics) for MSCI indexes. https://www.starcapital.de/en/research/stock-market-valuation/
For MSCI Australia they have the CAPE as 18.6 as of 28.02.2020. Now MSCI Australia index AFAIK is something akin to the ASX100, so only the top of end of town really and this will be using whatever is the latest earnings data provided by MSCI probably. But as another proxy we can check it. If we impute a 24% decline in the ASX:VLC ETF since the end of Feb, we could say the CAPE might be something like 14.

Compare this with the US:
- CAPE is approximately 20
- TMC/GDP approximately 100%

Not saying that Australia is cheap or US is expensive (see discussion here for that https://www.aussiestockforums.com/threads/market-bottoms.35299/#post-1062915 ) but only disagreeing with "much the same for Australia".

CC @kid hustlr


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## kid hustlr (24 March 2020)

Yep great post thanks

The availability of these metrics for Aus is really difficult to come by.

Looking through a different lense:

Question to the forum - how many years until you think we will reach new highs in the All Ords?




Table above is crude but it get's the wheels turning.

The counter to this argument is the Hussman view which even though we have fallen drastically, historically on his model the S&P is no where near cheap


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## gartley (24 March 2020)

kid hustlr said:


> Question to the forum - how many years until you think we will reach new highs in the All Ords?



 New highs, absolutely no idea.. The 19 year cycle low: early to mid 2022


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## Smurf1976 (24 March 2020)

InsvestoBoy said:


> Not saying that Australia is cheap or US is expensive (see discussion here for that https://www.aussiestockforums.com/threads/market-bottoms.35299/#post-1062915 ) but only disagreeing with "much the same for Australia".




Agreed and it seems I got it rather wrong. 

As an explanation of how, I simply looked at the chart for the US after following a link to it from an article, then thought OK I wonder how Australia compares. Checked what the total market cap of the ASX is, checked what our GDP is, came up with a similar number.

Upon further checking following your comments, it seems that the GDP figures I used were in fact stated in USD not AUD. I just assumed AUD given it's Australian data, but nope it's in USD it seems. 

That was the source of my error. My apologies and I'll check the currency next time...... 

That aside though, I do have a basic line of thought which says that if the US still has further to fall then regardless of any fundamentals or technicals of the Australian market, further falls in the US probably aren't going to give Australian investors much confidence locally given current circumstances outside the markets are global in nature.


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## InsvestoBoy (24 March 2020)

Smurf1976 said:


> That aside though, I do have a basic line of thought which says that if the US still has further to fall then regardless of any fundamentals or technicals of the Australian market, further falls in the US probably aren't going to give Australian investors much confidence locally given current circumstances outside the markets are global in nature.




Yep but there are two things here:

1. Short term movements as global indices move together, see the #14 post of this thread: https://www.aussiestockforums.com/threads/how-far-will-the-market-fall.35253/#post-1060455

2. Drawdowns and long term movements might not be the same because of different valuations. Take a look at this chart of NYSE listed SPY (S&P500 ETF in blue) vs EWA (MSCI Australia ETF in black), just using these two so they're priced in the same currency (USD) and avoid confusion that I often see here comparing US index to ours in different currencies.




Our market (in USD) peaked in early 99 and bottomed in mid 01. The drawdown was something like 35%.

US market didn't peak until mid 00 and didn't bottom until mid 02. The drawdown was something like 50%.

The point being that #1, yes short term markets move together and if the US is overvalued it will be a weight on our own index. But also, #2 those valuations (along with sector composition) do matter over the cycle and influence drawdown and long term movement.


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## qldfrog (24 March 2020)

There is still room to fall:
the way I see that we have an average PE currently of around 14/15 which are based on an optimistic  dividend figure based on previous activity.So even if by miracle stimulus, cure we can keep these figures, we are basically priced on long term reasonable average PE (11 to 14 based on how you average etc)
So we are best fairly priced, not in the bargain area yet and this is based on an optimistic view with a lot of risk involved so yes, tentatively, selected entries but I expect more falls ahead, we are not yet at the bottom


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## InsvestoBoy (24 March 2020)

qldfrog said:


> There is still room to fall:
> the way I see that we have an average PE currently of around 14/15 which are based on an optimistic  dividend figure based on previous activity.So even if by miracle stimulus, cure we can keep these figures, we are basically priced on long term reasonable average PE (11 to 14 based on how you average etc)
> So we are best fairly priced, not in the bargain area yet and this is based on an optimistic view with a lot of risk involved so yes, tentatively, selected entries but I expect more falls ahead, we are not yet at the bottom




There is no rule which says we have to fall to fair value, just like there is no rule to say we can't exceed fair value (by a lot) or fall far below it.


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## finicky (24 March 2020)

The AORD took ~ 16 months to bottom in the GFC, only been falling 2 months so far this time. Much sharper fall so I am expecting down to 3,000 AORD at least (where it bottomed last time). Infections far from peaking and social isolating practices have plenty more room to tighten.


----------



## qldfrog (24 March 2020)

InsvestoBoy said:


> There is no rule which says we have to fall to fair value, just like there is no rule to say we can't exceed fair value (by a lot) or fall far below it.



I agree but many people here talk about fundamentals...and fundamentals deals with fair value;
Not fair value in the mind of buying but based on long term average, etc

as a system trader, I rarely buy at fair value, my systems follow the lemmings and try not to jump off the cliff pushing overinflated prices higher quite often
But if investing long term aka 5y or more, I would look at this fair value PE component;
If the PE was at 6 or 8 taking into account expected lower dividends then being in bargain territory, I would be happy to buy .Not the case yet
But we agree this will not mean we can not jump 20PC next month


----------



## zaxacel1975 (24 March 2020)

qldfrog said:


> There is still room to fall:
> the way I see that we have an average PE currently of around 14/15 which are based on an optimistic  dividend figure based on previous activity.So even if by miracle stimulus, cure we can keep these figures, we are basically priced on long term reasonable average PE (11 to 14 based on how you average etc)
> So we are best fairly priced, not in the bargain area yet and this is based on an optimistic view with a lot of risk involved so yes, tentatively, selected entries but I expect more falls ahead, we are not yet at the bottom




Does your analysis adjust for the historically low interest rates and high liquidity being pumped into the system, which has been going for quite a while now? Since the GFC anyway.
Not saying you are not correct, but this has found its way into growth markets (shares), and not sure it will be any different on the other side of this current situation.


----------



## qldfrog (24 March 2020)

zaxacel1975 said:


> Does your analysis adjust for the historically low interest rates and high liquidity being pumped into the system, which has been going for quite a while now? Since the GFC anyway.
> Not saying you are not correct, but this has found its way into growth markets (shares), and not sure it will be any different on the other side of this current situation.



Each time people say, it is different this time, i run
 it is true with worthless money..a company, any is worth an unlimited amount of these pesos
But p/e stays relevant as:  if a company is not able to make great profit in a low or neg interest rate period, is it really worth much,?


----------



## zaxacel1975 (24 March 2020)

qldfrog said:


> Each time people say, it is different this time, i run
> it is true with worthless money..a company, any is worth an unlimited amount of these pesos
> But p/e stays relevant as:  if a company is not able to make great profit in a low or neg interest rate period, is it really worth much,?




no need to run, I think we are talking about slightly different things.
Price reflects the value people place on future earnings, and the risk they are willing to take based on their thoughts on the sustainability of those earnings or confidence in the companies ability to grow them.
I also think it is fair to acknowledge that people will take on more risk, and pay a higher price for future earnings when the alternative is holding cash and the return is almost 0.

I am not sure of the context of your comment around ‘different this time’. I am more referring to the run up before this crash, and what I think will happen after it when people get a better feeling for what future earnings will look like, rather than talking about the actual crash itself.
Of course if everyone loses their job and has no cash then it doesn’t really matter how cheap shares get from a PE point of view, they could just continue to fall.
Also the PE will tell us if shares are cheap or not, after we get through this, because I am not sure if anyone has a real good idea on what the actual impact on earnings will be from all this, or the long term impact on society, risk tolerance etc.


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## qldfrog (24 March 2020)

In overall agreement,  "this time" meaning the QEs done and the flooding of fake money by the federal banks the world over
I use the term fake as in fiat currency,, not counterfeit
Unlimited printing....
This period of unlimited low interest worse negative interest is an aberration waiting to collapse.


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## zaxacel1975 (25 March 2020)

I am not clever enough to know the what or how this QE thing plays out, but it does look like a house of cards.
When the GFC sparked a massive increase in debt on govt and reserve bank balance sheets I thought it might have been salvageable by a good old bout of high inflation, so the debt at least became manageable. Now I just don’t know how it all unwinds.

I thought the US was planning a 1.2 trillion rescue package, then I heard it was 2 trillion. Tonight the news said 3 trillion. Now I don’t know if this is an undeclared adjustment to local currency, or the news guy just got it wrong, but it seems a lazy 1 or 2 trillion is just considered rounding these days.

Strange times we find ourselves in.


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## aus_trader (25 March 2020)

Strange times indeed.

All is well, the patient is still alive. Another dose of Fed injection has worked to get it back up


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## So_Cynical (25 March 2020)

At some point reasonably soon we will see the first day of no new cases (Aust) and then soon after the first week, how
soon after will the panic button be reset? the pressure to get back to normal will be enormous...the rally will be on.

Late April or early May?


----------



## frugal.rock (25 March 2020)

aus_trader said:


> All is well, the patient is still alive. Another dose of Fed injection has worked to get it back up



The patient has just had a shot of adrenalin and the paddles applied...
Nothing changes the fact that the patient is terminally ill...


----------



## Smurf1976 (25 March 2020)

aus_trader said:


> Strange times indeed.
> 
> All is well, the patient is still alive. Another dose of Fed injection has worked to get it back up



I was just pondering whether this is the start of the much anticipated bounce?

The market has stopped falling despite the bad news outside.

Note that I'm thinking of a bounce possibly starting here, there's going to be one sometime surely, not a major bottom at this point.


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## aus_trader (25 March 2020)

Smurf1976 said:


> I was just pondering whether this is the start of the much anticipated bounce?
> 
> The market has stopped falling despite the bad news outside.
> 
> Note that I'm thinking of a bounce possibly starting here, there's going to be one sometime surely, not a major bottom at this point.



Yes, maybe not the absolute bottom yet, but a short-term bounce is on the cards I think.
Trillions are injected, even a dead cat would bounce with a dose like that !


----------



## InsvestoBoy (25 March 2020)

InsvestoBoy said:


> Using the co-ordinates of the peak=>trough and high of todays retracement (7202, 5350, 6037) as inputs to a Fibonacci extension gets you 4582 as the 0.786 extension and 4185 as the 1.0 extension.
> 
> A bit hard to see because I had to zoom the chart quite a bit out to show the extensions while the coordinates are all within a short timeframe.
> 
> ...






InsvestoBoy said:


> Who knew at the time that 7202, 5350, 6037 would actually be the valid swing?
> 
> Anyway, looks like 4895, the 0.618 extension was tapped and closed for the bounce:
> View attachment 101334
> ...




Well, this is fun:



The chart looks like a mess but these are massive moves. The latest bar is up 10% off the 0.786 extension...


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## qldfrog (25 March 2020)

So_Cynical said:


> At some point reasonably soon we will see the first day of no new cases (Aust) and then soon after the first week, how
> soon after will the panic button be reset? the pressure to get back to normal will be enormous...the rally will be on.
> 
> Late April or early May?



Match our graph with Italy, when italy peak, so will we with the fixed delay
May would be optimistic in my opinion


----------



## Knobby22 (25 March 2020)

So_Cynical said:


> At some point reasonably soon we will see the first day of no new cases (Aust) and then soon after the first week, how
> soon after will the panic button be reset? the pressure to get back to normal will be enormous...the rally will be on.
> 
> Late April or early May?



If we as citizens acted like the South Koreans we could achieve it. 

Too many idiots though. Listening to people whinging about the hairdressing restrictions is deflating.


----------



## lusk (25 March 2020)

Knobby22 said:


> If we as citizens acted like the South Koreans we could achieve it.
> 
> Too many idiots though. Listening to people whinging about the hairdressing restrictions is deflating.




Same, people rushing down to get their hair done before they close. This whole thing has been a good look through the window of human stupidity.


----------



## Garpal Gumnut (25 March 2020)

Stay at home if possible. 

Keep distance from others if out.

gg


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## basilio (25 March 2020)

IMV there is far more  economic damage coming in terms of threats to the US economy  as the virus rapidly spreads.

However we are now seeing the whole world  beginning  becoming affected.  Just can't see how markets will stay stable in this situation.


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## aus_trader (25 March 2020)

basilio said:


> IMV there is far more  economic damage coming in terms of threats to the US economy  as the virus rapidly spreads.
> 
> However we are now seeing the whole world  beginning  becoming affected.  Just can't see how markets will stay stable in this situation.



There will be a lot of volatility. Short term rallies like what we are experiencing at the moment with possibly further downside to come.

It'll truly be a miracle if there is going to be a 'V-shape' recovery in the markets as if everything is back to normal, unless there is a cure of course.


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## Cam019 (25 March 2020)

Let's not forget the GFC where we had counter trend rallies of over 18%. It's not out of the realm of possibility that the same thing could happen this time around. If that were the case, this would give us a level from Mondays low of 5526ish, which is kind of in no mans land. BUT, given the surge in volatility since the start of this move, the zone I am watching is the 5520 - 5700 which also has some confluence with the 38.2 fib. That'd be about a 25% counter trend move to the low side 5520 level.

Here is the kicker for me. The XAO is down approximately 34% over the last 21 trading days. There is over 60% (288 stocks) of the XAO constituents that are down at least that. The range is -34% to -89%. There is over 37% (180 stocks) of the XAO constituents with losses between -33% and 0%.

There are only 9 stocks (1.89%) in the XAO constituents that have gains over the same 21 day period. 9! Much more downside to come, in my opinion


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## IFocus (25 March 2020)

While the daly ranges remain over 2% up or down we are no where near recovery US infection rate to soar.


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## moXJO (25 March 2020)

I changed my strategy from buying all the way down, to selling on rallies. I want to free carry as much as I can. 
  Bhp has treated me well as has afterpay. Props to those who pointed them out.
Afterpay has been swinging back and forth a lot. Roughly 30% a day in some instances.

I had some flops like Wpl though. I'm just at breakeven with the potential of it going negative on any drop from here.


----------



## Cam019 (25 March 2020)

Cam019 said:


> If that were the case, this would give us a level from Mondays low of 5526ish, which is kind of in no mans land.



This is supposed to be 5226.


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## Dona Ferentes (25 March 2020)

Today's market action. Brought to you by Peter D'out


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## Dona Ferentes (25 March 2020)

should have waited for the close-out.... XJO +262 when the squaring off occurred


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## gartley (26 March 2020)

Hopefully this rally can carry through to the 38.2 and 50% retracement range. 5700 could be looking acheivable with Hurst price projection of 5664


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## MrChow (26 March 2020)

https://www.aussiestockforums.com/posts/1063585/


MrChow said:


> Italy cases and deaths down 2 days in a row.
> 
> Would fit the logic of a 14 day shutdown if they decreased towards the end of that period.
> 
> ...




Where was everyone 3 sessions ago I got no backup from anyone!


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## InsvestoBoy (26 March 2020)

MrChow said:


> Where was everyone 3 sessions ago I got no backup from anyone!




Selling puts and buying US stocks https://www.aussiestockforums.com/threads/what-are-we-buying-on-monday.35247/page-6#post-1063312


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## MrChow (26 March 2020)

I've guessed this first act is going to top out within -40%.

Main reason is a quicker than consensus ability to flatten the curve in the worst hit cities (Wuhan, Lombardy as examples) and we haven't been seeing those hypothetical exponential graphs going into the millions lately.

I expect secondary waves with colder weather in both hemispheres.  The question mark is whether governments with months to prepare can minimise the impact.   If they can then -40% might turn out to be the bottom.  If not then GFC and 1929 scenarios come into play next year with an elongated timeline.


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## moXJO (27 March 2020)

I thought stocks looked expensive before. Now they look more expensive than they were previously at this level. There is no way this is a v reversal.
I got out of Wpl for a profit. I'm all out at the moment. 
What's the easiest way to short afterpay?


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## gartley (27 March 2020)

Wave (A) rally from the low was on high momentum, exited longs this morning and will wait for fresh buy signal. Wave (C) should take longer and with less momentum and smaller daily ranges. Using crash of 29 rally as a bit of a guide here))


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## Smurf1976 (27 March 2020)

gartley said:


> Wave (A) rally from the low was on high momentum, exited longs this morning and will wait for fresh buy signal. Wave (C) should take longer and with less momentum and smaller daily ranges. Using crash of 29 rally as a bit of a guide here))



Just saying your charts and analysis are much appreciated and informative.


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## moXJO (27 March 2020)

Smurf1976 said:


> Just saying your charts and analysis are much appreciated and informative.



Good for mugs like me to guesstimate.


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## tonyparis (27 March 2020)

Last hour of trading for the week.....Market down today 
Late rally this afternoon????
Hope so as I would like to sell something!


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## IFocus (27 March 2020)

tonyparis said:


> Last hour of trading for the week.....Market down today
> Late rally this afternoon????
> Hope so as I would like to sell something!




Not unusual for traders not to want to hold positions over weekends in such volatile times.


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## tonyparis (27 March 2020)

IFocus said:


> Not unusual for traders not to want to hold positions over weekends in such volatile times.



So I should have sold yesterday???
My plan was to just buy and forget about for the next 6 months but I am checking the market every hour!  Maybe my term deposit wasnt so bad after all. Definitely less stressful


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## gartley (27 March 2020)

Smurf1976 said:


> Just saying your charts and analysis are much appreciated and informative.



Thanks Smurf, likewise with all the content you post, been following for many years here))
Good bunch of people on this forum, and a good outlet from the depressing news day to day news we are bombarded with every day!


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## Logique (27 March 2020)

Smurf1976 said:


> Just saying your charts and analysis are much appreciated and informative.



Gartley, my thanks also. There's a good core of posters in ASF who always contribute something productive. ASF as a resource is light years ahead of the likes of 'Hot Cropper'


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## gartley (27 March 2020)

Just some add ons to post #377. A chart with EW annotations is all good and fine but how does one trade it? EW is a theory and model and a good guide sometimes but it doesn't mean the market is playing ball with that model. We can only trade the market that is in front of us, and a market has to tell us what it wants to do first and if we are lucky enough we can catch a sustained trend. These are the cycles routines I use for day to day trading using the folllowing multi timeframe analysis with 1h, 3h, daily and Weekly charts.
This morning the 1h Trend Indicator crossed below 100 after being in a sustained trend all week in the 1h timeframe. As I type it's at -100 suggesting a the 1h trend will be sustained for now. The 3h TI crossed below 100 suggesting a 3h down trend but this should be a countertrend affair as daily TI is still in uptrend cycle until otherwise suggested. The attached weekly chart shows TI is below -100 and as such a sustained downtrend until proven otherwise


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## MrChow (27 March 2020)

Stocks are yet to establish a gradient so even hypothesising a worst case scenario, the biggest losses need an elongated timeline. EG. In 1929 the trend line was about -30% p.a.

So it is unlikely for a market that fell -35% in a month not to rebound to establish a more sustainable rate of decline if this is going to go big (counter intuitive).

2008 had the same +20% rally after the first leg down.


----------



## moXJO (27 March 2020)

I bought a bunch of bbus with an itchy finger to short something. 

Come on Trump, time to say something stupid. It's a high percentage play imo.


----------



## Dona Ferentes (27 March 2020)

any rally attempts snuffed out. and a >40 pt drop at close-out.
(two days of weekend market 'lockdown' coming, when a lot can happen/ change.)


----------



## InsvestoBoy (27 March 2020)

Dona Ferentes said:


> any rally attempts snuffed out. and a >40 pt drop at close-out.
> (two days of weekend market 'lockdown' coming, when a lot can happen/ change.)
> 
> View attachment 101743




Not the first time this week that sellers all day then once close is in, big bids:



Todays post market fun including +100 point move in <1 minute.


----------



## Dona Ferentes (27 March 2020)

InsvestoBoy said:


> Not the first time this week that sellers all day then once close is in, big bids:
> Todays post market fun including +100 point move in <1 minute.



interesting. thx


----------



## MrChow (27 March 2020)

Anatomy of a Market Crash during the first 6 months -

1929: Largest Drop -45% Largest Rally +35%
1987: Largest Drop -35% Largest Rally +20%
2008: Largest Drop -20% Largest Rally +10%
----
2020: Largest Drop -35% Largest Rally +20%

Based on history this week's market rally was not really out of the ordinary.  No better time than after a $2T Stimulus and Policy U-Turn to protect the economy.

But these short term recoveries have occured within bear markets that have still lost between -35% and -85% so it is more a functional mechanism than an indicator of where we will end up.


----------



## InsvestoBoy (27 March 2020)

MrChow said:


> History of the S&P500: What happened in the first 6 months of market crashes:
> 
> 1929: Largest Drop -45% Largest Rally +35%
> 1987: Largest Drop -35% Largest Rally +20%
> ...




So you're forecasting the retracement is over?


----------



## MrChow (27 March 2020)

S&P500 isn't even priced for a bear market at the moment (technically -19%).

So I think short-term movements: pushing -40% was oversold, getting back within -20% is now overbought, are overshooting both ways and we should see a reversal for some balance.

On a longer time scale I am high conviction that they can get back to 3000 before the end of September.  I think a secondary wave from October on is the real danger.


----------



## Country Lad (27 March 2020)

InsvestoBoy said:


> Not the first time this week that sellers all day then once close is in, big bids..............Todays post market fun including +100 point move in <1 minute.




Not too sure I follow your chart as there is no time scale.  From Iress:



and these are the 30 second and closing numbers


----------



## InsvestoBoy (27 March 2020)

Country Lad said:


> Not too sure I follow your chart as there is no time scale.  From Iress:
> View attachment 101754
> 
> 
> ...




It's 1 min bar chart of XJO CFD that tracks SPI futures showing before and after the close.

Same chart below with Sydney timezone timescale at the bottom, 3 vertical bars show 4PM close, 4:10PM Closing Single Price Auction start and 4:12PM Closing Single Price Auction end


----------



## fiftyeight (27 March 2020)

InsvestoBoy said:


> So you're forecasting the retracement is over?
> 
> View attachment 101750




I will play the game, yup retracement is over. 

Not sure what will be deeper, the next leg down the hole I usually dig for myself...hence the avatar


----------



## IFocus (27 March 2020)

Still very early IMHO with a number of acts to come.

Another indicator is too many here are waiting to buy and maybe thinking we will bounce out the other side somewhere.

I am thinking it will take years to recover from these restrictions of movement that's killing employment and lots of changes psychologically for large masses of people.

WA to go to lock down of regional areas next week.

Something Morrison said today which was said to him by the chief medical officer  which made sense whatever changes they make will be permanent for a minimum of 6 months (really 12 to 18 months).

That will apply to every country world wide.

(maybe not Texas)


----------



## MrChow (27 March 2020)

Double checked the S&P500 and they're down -22% overnight.

Oil took them down -20% in 2016 (and is at a lower price today).

Does that mean they only attribute -2% to Coronavirus?

Seems like they've dramatically overshot the upside so I'd anticipate a -10%  retrace will be fairly swift.

The market may actually value them at -30% from peak on a fundamental basis but to make money they need volitility swinging over and under and back to that marker.

If that all happens probably see the XAO back in the 4500s.


----------



## Smurf1976 (28 March 2020)

Putting this forward as a serious thought and not wanting to turn this into a political thread but I pose a question.

Are the comments from Donald Trump about the US going back to work really just aimed at the stock market and nothing else?

That is, I'm suggesting that there's no real thought on his part that what he's saying is actually going to happen, he's just been told to say it in order to help ignite a bounce in the market and avert a straight down crash. A bounce which will end once it becomes undeniable that the plan won't be implemented.

I don't intend that as political comment but as trading comment. My basic thinking being that the idea is at least possible, it has indeed brought about a bounce, and from a timing perspective the idea that we get a second up move ending just before Trump's back to work date (as per gartley's charts #377 in this thread) does seem plausible.

Thoughts?

As I said, my point is a trading one not a political one.


----------



## IFocus (28 March 2020)

MrChow said:


> Double checked the S&P500 and they're down -22% overnight.
> 
> Oil took them down -20% in 2016 (and is at a lower price today).
> 
> ...




Add a few % for trends pretty much always over shooting up or down.


----------



## IFocus (28 March 2020)

Smurf1976 said:


> Putting this forward as a serious thought and not wanting to turn this into a political thread but I pose a question.
> 
> Are the comments from Donald Trump about the US going back to work really just aimed at the stock market and nothing else?
> 
> ...




My take on Trumps comments is that they are for political positioning, blame sharing for the coming election there is no way he would be getting advise along those lines the only cravat is the comments coming from the Texas lieutenant governor.

Wining an election in the US with an economy dead in the water is unlikely no matter what the circumstances are.

The position could go along the lines how he wanted to start up the economy but the Democrats or who ever wouldn't let him so it wasn't his fault........maybe

Or as you said just a throw away line to get people distracted.


----------



## tonyparis (29 March 2020)

moXJO said:


> I changed my strategy from buying all the way down, to selling on rallies. I want to free carry as much as I can.
> Bhp has treated me well as has afterpay. Props to those who pointed them out.
> Afterpay has been swinging back and forth a lot. Roughly 30% a day in some instances.
> 
> I had some flops like Wpl though. I'm just at breakeven with the potential of it going negative on any drop from here.



Hi moXJO
Newbie here...My plan was to buy all the way down (boring bank shares) with a plan that the further down it went, the more I would buy but then it stopped going down! 
I was expecting to hold long term but would you recommend selling when I can turn a profit greater than 5% or so and then buy again if they go down?


----------



## moXJO (29 March 2020)

tonyparis said:


> Hi moXJO
> Newbie here...My plan was to buy all the way down (boring bank shares) with a plan that the further down it went, the more I would buy but then it stopped going down!
> I was expecting to hold long term but would you recommend selling when I can turn a profit greater than 5% or so and then buy again if they go down?



None of us can give advice.

For me personally, only bank share I'd look at is anz. Banks are in for hard times ahead though. So buy cheap.

 I sold on the rally at a profit to buy back in cheaper(hopefully) at a later date. So I'd get more bang for my buck. 

In my opinion everything will get cheaper from here. But there are a lot of things that could happen:
Too much stimulus and then we get a vaccine/cure.

Massive deaths worldwide.

Banks fall over.

The world gets on top of the virus before too much damage.

Or it sticks around for months causing problems.



Just remember  I'm in gambler territory. I try to play with money I'm prepared to lose.


----------



## Annica (29 March 2020)

Hi aus_trader,

nice post and share your gripe with Options trading fees in Australia but i came across a new entrant into this market called https://impliedvolatility.com.au/. They are offering options for as low as $24.95. I know that they are not as low as some of the US brokers but still better than some of the big brokers in Australia like nabtrade and commsec.

Thanks,





aus_trader said:


> I have probably said this before, but will say it again in case there are innovative little companies like Selfwealth Ltd (SWF) and maybe the dinosaur brokerage firms that want to re-invent themselves are listening in...
> 
> The reason why there are hardly any retail traders in the ASX option market is it's freakin' expensive to trade options on the ASX. No local broker offers Options trading brokerage below $34.95 which is ridiculous compared to other developed countries such as the US that offer options trading at around US$5 per trade.
> 
> First hurdle in trading the ASX options market was broken thanks to the ASX that removed the contract size from 1000 shares to 100 shares a while back, so even I can buy/sell CBA(even the ridiculously high priced CSL) options if 2nd hurdle was removed. The 2nd hurdle of bringing down the options brokerage cost still remains. When it comes to brokerage, I think disruptive innovators like Selfwealth that offer CHESS sponsored share trading at Australia's lowest price at A$9.50 may eventually offer similar brokerage for ASX ETO (Exchange Traded Options) one day... Till then don't expect to find dumb clueless retail mum & dad investors/traders to offer cheap options on the market (to take the opposite side as you said).


----------



## aus_trader (29 March 2020)

Annica said:


> Hi aus_trader,
> 
> nice post and share your gripe with Options trading fees in Australia but i came across a new entrant into this market called https://impliedvolatility.com.au/. They are offering options for as low as $24.95. I know that they are not as low as some of the US brokers but still better than some of the big brokers in Australia like nabtrade and commsec.
> 
> Thanks,



Cheers Annica. This is an improvement on the current ETO pricing offered by the local brokers. I think eventually they can come down to the same prices as stock trading which is around the A$10 mark. So still a fair way to go...


----------



## Annica (29 March 2020)

aus_trader said:


> Cheers Annica. This is an improvement on the current ETO pricing offered by the local brokers. I think eventually they can come down to the same prices as stock trading which is around the A$10 mark. So still a fair way to go...



I agree. As with anything, the more the competition, the lower the prices!


----------



## aus_trader (29 March 2020)

Annica said:


> I agree. As with anything, the more the competition, the lower the prices!



Absolutely. I am optimistic that the prices for Stock and Option brokerage is headed in one direction in the future. That direction is down 

There is various disruptors like SelfWealth already shaking up the market. I read somewhere that even the US firm tastytrade Inc. will be offering services in Australia in the future. So as technology improves and there will be less paperwork and staff required for running a brokerage firm, therefore bringing the costs lower. Any brokerage firm that doesn't adapt will be fossilised as what happened with the dinosaurs.


----------



## Annica (29 March 2020)

aus_trader said:


> Absolutely. I am optimistic that the prices for Stock and Option brokerage is headed in one direction in the future. That direction is down
> 
> There is various disruptors like SelfWealth already shaking up the market. I read somewhere that even the US firm tastytrade Inc. will be offering services in Australia in the future. So as technology improves and there will be less paperwork and staff required for running a brokerage firm, therefore bringing the costs lower. Any brokerage firm that doesn't adapt will be fossilised as what happened with the dinosaurs.



and obviously US is leading on this front with fintech companies like robinhood (who is offering cheap options trading) and M1 finance (Amazing concept of fractional investing!) cutting through the crap paperwork obstacles as you mentioned. hopefully we get some more rub of that low investing fees pattern and fintech advances in the US.


----------



## aus_trader (29 March 2020)

Annica said:


> and obviously US is leading on this front with fintech companies like robinhood (who is offering cheap options trading) and M1 finance (Amazing concept of fractional investing!) cutting through the crap paperwork obstacles as you mentioned. hopefully we get some more rub of that low investing fees pattern and fintech advances in the US.




We Aussies got the crap handed to us big time in the past. I started in the days of $29.95 brokerage just to buy or sell some shares in a company , 

Yes it have come down to about a third of that these days 

But there is still room for improvement, especially in the Options trading realm, to buy and sell ETO's


----------



## moXJO (30 March 2020)

Fed is talking about buying US stocks.


----------



## aus_trader (30 March 2020)

moXJO said:


> Fed is talking about buying US stocks.



It's the Era of free and independent markets, so that wouldn't be surprising


----------



## lusk (30 March 2020)

moXJO said:


> Fed is talking about buying US stocks.




How do we know they don't already do it, they can't be audited.


----------



## moXJO (30 March 2020)

lusk said:


> How do we know they don't already do it, they can't be audited.



They are passing legislation or something so they can do it.


----------



## moXJO (30 March 2020)

Well now I'm not so sure of market direction. $2trillion stimulus passed on Friday. Now Fed putting a floor under stocks.


----------



## aus_trader (30 March 2020)

moXJO said:


> Well now I'm not so sure of market direction. $2trillion stimulus passed on Friday. Now Fed putting a floor under stocks.




Funny country. President couldn't care less about the countryman dying till very recently saying it's just the 'Wuhan flu' but putting all the efforts to look after himself and his rich buddies from having a dent to their wealth. 

I think the FED circus will only end one day when the poor and average have had enough of taxes and the wealthy getting wealthier. I think there will be social unrest or a civil war that may bring about a revolution.

When that happens stocks will come back to the fundamentals of what they are actually worth in terms of Earnings Multiples. Stock markets may go back to being free markets around the world once more... one day, if the FED money flooding the markets around the world disappears


----------



## moXJO (30 March 2020)

moXJO said:


> They are passing legislation or something so they can do it.



Sorry this is wrong they are considering still but will need legislation. I'm not sure how it works just yet.


----------



## aus_trader (30 March 2020)

moXJO said:


> Sorry this is wrong they are considering still but will need legislation. I'm not sure how it works just yet.



As I said it wouldn't be a surprise to me one bit. It's just an extension of buying the stocks directly as opposed to all the backdoor asset purchases via QE, rate cuts, bailouts, share buy backs and asset/debt purchases that has happened thus far anyway.


----------



## InsvestoBoy (30 March 2020)

Here's the chart of a market where the Central Bank is actively buying equity ETFs *for years now,* to the point where they are a Top 10 holder of many companies via ETFs.

Not to mention extremey low rates for a long time, QE, QQE, yield curve control, ZIRP, NIRP, you name it.




It's almost as if *none of that matters at all.*


----------



## OmegaTrader (30 March 2020)

InsvestoBoy said:


> Here's the chart of a market where the Central Bank is actively buying equity ETFs *for years now,* to the point where they are a Top 10 holder of many companies via ETFs.
> 
> Not to mention extremey low rates for a long time, QE, QQE, yield curve control, ZIRP, NIRP, you name it.
> 
> ...




Look at the big picture. 


.... "Bank of Japan’s (BOJ) exchange-traded funds
(ETFs) purchasing program that has conducted since December 2010; this program is part of the BOJ’s unconventional monetary policy, which has accelerated after the introduction of the Quantitative and Qualitative Easing (QQE) in April 2013."


----------



## InsvestoBoy (30 March 2020)

OmegaTrader said:


> Look at the big picture.




I do. Do you?

All of those magical CB programs and they couldn't even get to the past highs that were achieved with no QQE, no ETF, no ZIRP, no nothing.

All of those magical programs and still underperformed the global index, an underperformance that only *accelerated* with ETF purchases and QQE




No inflation, no growth, no magical stock "floor".

Almost as if *Central Banks aren't even relevant.*


----------



## OmegaTrader (30 March 2020)

InsvestoBoy said:


> I do. Do you?
> 
> All of those magical CB programs and they couldn't even get to the past highs that were achieved with no QQE, no ETF, no ZIRP, no nothing.
> 
> ...





buying began 2010 buying accelerated 2013
price only gains
2020    -18.04%
2019    18.20%
2018    -12.08%
2017    19.10%
2016    0.42%
2015    9.07%
2014    7.12%
2013    56.72%
2012    22.94%
2011    -17.34%
2010    -3.01%

10,000 to 18,000 ???

what am i missing ? isn't that 180% gain


----------



## InsvestoBoy (30 March 2020)

OmegaTrader said:


> what am i missing ? isn't that 180% gain




Just look at the chart.

All that buying, no special performance vs other markets with no ETF buying or QQE or ZIRP or anything. If anything, underperformance.


----------



## moXJO (30 March 2020)

InsvestoBoy said:


> Here's the chart of a market where the Central Bank is actively buying equity ETFs *for years now,* to the point where they are a Top 10 holder of many companies via ETFs.
> 
> Not to mention extremey low rates for a long time, QE, QQE, yield curve control, ZIRP, NIRP, you name it.
> 
> ...



So you don't think dow will jump/hold because of it?
Surely confidence is a factor?


----------



## OmegaTrader (30 March 2020)

InsvestoBoy said:


> Just look at the chart.
> 
> All that buying, no special performance vs other markets with no ETF buying or QQE or ZIRP or anything. If anything, underperformance.



In your words:
No inflation, no growth,

But up 180% what is driving the growth then? 

Could it be that 80% of the market is owned by the BOJ and being consistently bought up??


----------



## InsvestoBoy (30 March 2020)

OmegaTrader said:


> In your words:
> No inflation, no growth,
> 
> But up 180% what is driving the growth then?




When I say growth I mean economic, GDP growth.



> Could it be that 80% of the market is owned by the BOJ and being consistently bought up??




If it's BoJ buying that is driving the Nikkei up, then why were all other markets up in the same timeframe with no CB buying or QQE? Why were those markets up *more* than the Japanese market when priced in the same currency?



moXJO said:


> So you don't think dow will jump/hold because of it?
> Surely confidence is a factor?




Because of what? Speculation about Fed buying stocks that hasn't happened?

Yes! Sentiment is a huge factor. If market participants think the Fed has a floor then they buy and the market goes up, sure. But don't mix up what drove that, namely, sentiment, not the Fed.

Here's a link from a week ago about the kind of things that might drive a rally
https://heisenbergreport.com/2020/0...novic-nomuras-mcelligott-look-back-and-ahead/

or this note from JPM on Friday on similar topics



You'll note that in none of this discussion is gibberish about the Fed.


----------



## moXJO (30 March 2020)

InsvestoBoy said:


> Because of what? Speculation about Fed buying stocks that hasn't happened?
> 
> Yes! Sentiment is a huge factor. If market participants think the Fed has a floor then they buy and the market goes up, sure. But don't mix up what drove that, namely, sentiment, not the Fed.




That's all I care about. All good.


----------



## InsvestoBoy (30 March 2020)

moXJO said:


> That's all I care about. All good.




The reasons I think it could rally from here, aside from the stuff mentioned in those links:




Breadth as measured by NYSI has turned up from an extreme oversold. Who knows whether it'll make it up to a decent value +500 that could really indicate longer term bullishness. Maybe it'll only make it to 0 or -200, who knows. All I know is we are a far way off any kind of retracement on this chart, so there is room to go up.


----------



## OmegaTrader (30 March 2020)

InsvestoBoy said:


> When I say growth I mean economic, GDP growth.
> 
> 
> 
> ...




If the fed announces tomorrow that it will buy etfs then it will rise, that is all that matters. If it is sentiment or the actual buying stopping market panic and forced selling.


----------



## InsvestoBoy (30 March 2020)

OmegaTrader said:


> If the fed announces tomorrow that it will buy etfs then it will rise, that is all that matters. If it is sentiment or the actual buying stopping market panic and forced selling.




This is demonstrably wrong, just by looking at the Nikkei chart.

Japanese equity investors didn't bid equities any more or less over the course of several years simply because the BoJ announced they were buying or even because they bought!

There is no rule which says if the Fed announces they will buy ETFs then markets will rise, just exactly like there was no rise when the Fed announced QE-Infinity and rate cuts to 0% and instead *the market went lock limit down.*

Just because a CB *can sometimes* drive sentiment, doesn't mean that they will. Sentiment is sentiment, Central Banks aren't sentiment.


----------



## InsvestoBoy (30 March 2020)

Fed cuts rates by ONE HUNDRED BPS to ZERO.

Announces return to QE.

Before market open to try and create a short squeeze.

Dow drops 20%.

It's still lower than where it was when the announcement came out.




So tell me again why you think the market has to rally just because the goobers at the Fed say something stupid?


----------



## OmegaTrader (30 March 2020)

InsvestoBoy said:


> This is demonstrably wrong, just by looking at the Nikkei chart.
> 
> Japanese equity investors didn't bid equities any more or less over the course of several years simply because the BoJ announced they were buying or even because they bought!
> 
> ...



You think one thing I think another
only time will tell if it actually happens.
it may not even be announced.
I don't care about being right I just am trying to game a scenario that could occur to improve the chances of making money. Other factors might overwhelm central banks buying.
If i could make 180% every 8 years I will be happy. 

It just shows that the anything it takes is a literal statement by central banks.


----------



## qldfrog (30 March 2020)

OmegaTrader said:


> You think one thing I think another
> only time will tell if it actually happens.
> it may not even be announced.
> I don't care about being right I just am trying to game a scenario that could occur to improve the chances of making money. Other factors might overwhelm central banks buying.
> ...



By now the Japanese taxpayers own most of their local sharemarket, the socialisation of Japan


----------



## Country Lad (30 March 2020)

Smurf1976 said:


> The ASX spent a full decade getting back to 1987 levels and more recently it took 12 years to regain the 2007 high. For that matter the high of January 1970 wasn't reached again until September 1979 and the 1937 high wasn't regained until 1945 and the 1951 high wasn't seen again until 1958 so there's plenty of examples of the market taking close to a decade to recover.






aus_trader said:


> Current crash looks so steep, somewhat like the 1987 flash crash. I would like to go all the way back to 1929 crash and earlier




As someone who was trading during the 1987, 1991 and 1992 falls, (not 1929 I'm afraid @aus_trader) can I say that trying to relate the current falls and particularly how the market will recover with those periods is simply not worth the effort.

The conditions then were totally different, comparatively few companies on the ASX, nowhere near the spekkies to play with, and importantly, in 1987, no internet to get data (imagine that kiddies) and 1991 and 1992 no or very basic internet price data. It is like comparing separate and different worlds.

My charting was done with pencil and graph paper and trades were done through real brokers.  Now we have instant trades, high frequency trading, myriads of differing professional opinions at the click of a mouse, forums driven by the red cordial brigade, minute by minute price discovery, instant access to market information and announcements……..and any other of the numerous differences between then & now.

In my view every downturn and recovery has been different and this one will not resemble any other.


----------



## basilio (30 March 2020)

Country Lad said:


> As someone who was trading during the 1987, 1991 and 1992 falls, (not 1929 I'm afraid @aus_trader) can I say that trying to relate the current falls and particularly how the market will recover with those periods is simply not worth the effort.
> 
> The conditions then were totally different, comparatively few companies on the ASX, nowhere near the spekkies to play with, and importantly, in 1987, no internet to get data (imagine that kiddies) and 1991 and 1992 no or very basic internet price data. It is like comparing separate and different worlds.
> 
> ...




Plus 1.  I think this will be quite a different beast.  Not sure how but there are far too many factors involved to believe there will be  a  "traditional" response.


----------



## Smurf1976 (30 March 2020)

basilio said:


> Plus 1. I think this will be quite a different beast. Not sure how but there are far too many factors involved to believe there will be a "traditional" response.



A particular issue is the sheer speed of events unfolding.

This thread started 20 days ago and at this point it's fair to say that in the context of current events that's an eternity. Things are happening in the space of 24 hours that under more normal circumstances would take a year or more to unfold.


----------



## Triathlete (31 March 2020)

My current thoughts are that the market still has further to fall,...I am looking for a 3 wave move down to complete the Elliott wave cycle.So we should see a rally up into the Wave 'B' which is sort of taking place now with prices moving higher but we need to look for the next move down after that to complete wave "C"....before we move back into a sustained upward move,the last financial crisis took about 2 years to complete the same so will be interesting to see how this one plays out.....Anyone else have some thoughts on this....???


----------



## qldfrog (31 March 2020)

Triathlete said:


> My current thoughts are that the market still has further to fall,...I am looking for a 3 wave move down to complete the Elliott wave cycle.So we should see a rally up into the Wave 'B' which is sort of taking place now with prices moving higher but we need to look for the next move down after that to complete wave "C"....before we move back into a sustained upward move,the last financial crisis took about 2 years to complete the same so will be interesting to see how this one plays out.....Anyone else have some thoughts on this....???
> View attachment 101828



Not an Elliot guru but yes i expect a little bounce back, a good opportunity to sell these bargains we got last 2 weeks
Then a deeper fall when both death toll and economic carnage realisation sinks in both here and in the states.
Potentially even start of inflation to ward end of year next year
Overall sell some profit in the next 2 months, wait by the bottom around us election time..hard to time..as noted everything going very very fast so bounce could very well end quickly.


----------



## hja (31 March 2020)

When in their lives will the Coronial (Covidian?) generation get to see these market levels again?


----------



## basilio (31 March 2020)

qldfrog said:


> Not an Elliot guru but yes* i expect a little bounce back, a good opportunity to sell these bargains we got last 2 weeks
> Then a deeper fall when both death toll and economic carnage realisation sinks in both here and in the states.
> Potentially even start of inflation to ward end of year next year*
> Overall sell some profit in the next 2 months, wait by the bottom around us election time..hard to time..as noted everything going very very fast so bounce could very well end quickly.




Plus 1.  I think there will have to be a very big rethinking of how we manage our economy and society as this crisis unfolds. 
I just can't see how our current systems will work.


----------



## gartley (31 March 2020)

Maybe we should change the name of this thread in the short term to: How far will the market go up?
For now expecting this rally to test the 11 year trendline  @ approx 5850 which originates from GFC low. The Hurst Price Projection analysis suggests approximately simliar within 26points (5876)


----------



## fiftyeight (31 March 2020)

I hope this bear does not bite. Bought some BEAR.ASX

This one is just a punt on my understanding of human emotions. My wife is constantly telling me “you just don’t get it”, maybe I should be selling BEAR.

The stimulus has been announced, borders are closing, people are losing their jobs, people are staying at home more, we are doing all the ‘right’ things. Things should be getting better?? Yet the numbers will keep rising for some time, I am not confident people will handle this well.


----------



## tech/a (31 March 2020)

tech/a said:


> Dow will test the low just as we are.
> Still think we are close to a consolidation area.






tech/a said:


> Yes!!!
> 
> Mind you there are those who are far more qualified than I who think
> We are only at the bottom of the ” J “ curve.
> ...




I think the worm is turning down again today having just shorted the Dax again at 9925.
Im still holding to my optimism that this is in an area of consolidation.
Massive US Case and death numbers will see a drift lower but packages in the Billions and 
trillions world wide I feel have placed a line in the sand.
If that line is crossed then all hell will break loose.

But Im optimistic that we (The world) have got this!


----------



## basilio (31 March 2020)

Yesterday the government added an almighty $130Billion package  to support every business, sole trader and worker .  Absolutely broke every economic boundary to date.

Yesterday afternoon the market rocketed in relief. It's now 3.20 and after an early  150 point climb -- we are down almost 60 points.  

Perhaps the purty cat needs a rest or a resuscitation  ?


----------



## basilio (31 March 2020)

qldfrog said:


> Not an Elliot guru but yes i expect a little bounce back, a good opportunity to sell these bargains we got last 2 weeks




Did you take your profits by lunch time Qfrog ? 
They didn't hang around long did they !


----------



## IFocus (31 March 2020)

For EW wave I remember the Law of Alternation does that apply to ABC?

Given how impulsive this move down are we likely to meander up?


----------



## basilio (31 March 2020)

Anyone taking bets on the last  35 minutes ? 
Currently in free fall but
1) Could it be oversold and there will be a rush to cover short positions ? OR
2) Are we about to trigger more sell orders an see another 100 point slide ?
Or WTF ?
....................................
Could break 5000 by days end. 
But not in a good way...


----------



## Country Lad (31 March 2020)

basilio said:


> Anyone taking bets on the last  35 minutes ?
> Currently in free fall but
> 1) Could it be oversold and there will be a rush to cover short positions ? OR
> 2) Are we about to trigger more sell orders an see another 100 point slide ?
> ...




A bit of euphoria after seeing the Dow up 3 odd %, then from midday reality kicked in and slow downward slide from there. Maybe not 5000 by days end but soon.


----------



## gartley (31 March 2020)

IFocus said:


> For EW wave I remember the Law of Alternation does that apply to ABC?
> 
> Given how impulsive this move down are we likely to meander up?



The last 2 legs have unfolded in 3 waves and the high of the last leg up exceeded the previous leg up. Two patterns that come to mind are: and irregular flat OR a running triangle within a wave B. Not sure which, but will take a punt and say a running triangle given all ther chop. Doubt the rally is finished yet, but anything possible.


----------



## qldfrog (31 March 2020)

hja said:


> When in their lives will the Coronial (Covidian?) generation get to see these market levels again?



True 5y before it gets above 5000 again


----------



## InsvestoBoy (31 March 2020)

Just another day of selling during the day and buyers after the close


----------



## kid hustlr (31 March 2020)

InsvestoBoy said:


> Just another day of selling during the day and buyers after the close
> 
> View attachment 101847




It's like the big boys get the tap on the shoulder at midday where the volume will be at the close.

/conspiracy


----------



## Country Lad (31 March 2020)

We're saved - all these inexperienced new traders will send the market up.  Until they run out of money of course.


----------



## gartley (31 March 2020)

Country Lad said:


> We're saved - all these inexperienced new traders will send the market up.  Until they run out of money of course.
> View attachment 101854



If there is a big influx of newbie traders bottom picking, most likely we ain't seen a bottom get......


----------



## hja (31 March 2020)

gartley said:


> If there is a big influx of newbie traders bottom picking, most likely we ain't seen a bottom get......



That sounds like a lot of sore bottoms... expect a shortage of nappy baby rash cream?
How many is 100% supposed to represent, end of March?
Then there's April...


----------



## barney (1 April 2020)

gartley said:


> most likely we ain't seen a bottom get......




Feels like it could be a volatile night on the Futs … Just a vibe .....  

Our market has held up well today but I'm holding Short on the SPI to offset any losses on my current holdings if the vibe comes to fruition. Wont be surprised to see some big swings in both directions given the early pre market on the FTSE and DAX


----------



## frugal.rock (1 April 2020)

It's all about the vibe Barney.
We've had 3 somewhat Rosie days... based off stimulus money announcement.
Let's remember that the money won't be largely showing up till well after mid April.
Good luck with the short, however the odds are stacked in your favour.
It's not Wabbit season yet. (Elmer Fudd laugh)

F.Rock


----------



## tonyparis (1 April 2020)

gartley said:


> If there is a big influx of newbie traders bottom picking, most likely we ain't seen a bottom get......



Yes I am one of them!
Seeking some guidance from the knights of the round table


----------



## tech/a (1 April 2020)

barney said:


> Feels like it could be a volatile night on the Futs … Just a vibe .....
> 
> Our market has held up well today but I'm holding Short on the SPI to offset any losses on my current holdings if the vibe comes to fruition. Wont be surprised to see some big swings in both directions given the early pre market on the FTSE and DAX




Barney
Are you suggesting that the FTSE and or the DAX have some sort of link with the SPI?
That the way they trade could affect the way the SPI trades?


----------



## gartley (1 April 2020)

tonyparis said:


> Yes I am one of them!
> Seeking some guidance from the knights of the round table



I think you will ok for the next some weeks if things as uptrend looks like it will persist. Looking for another leg down to take hold from higher levels thereafter and retest lows and probably even further..


----------



## barney (1 April 2020)

tech/a said:


> Barney
> Are you suggesting that the FTSE and or the DAX have some sort of link with the SPI?
> That the way they trade could affect the way the SPI trades?




Yeah definitely, but not all the time (in my experience) … 

SPI closing price (4.29pm on Axi-T) will usually continue to follow the lead of the DAX and FTSE futs as they jockey for position in their pre-open.  

If you get a divergence as we did today (*FTSE +DAX* were generally *trending down* into the *SPI* close which was *generally up*) 

Plus a lot of volatility of the SPI futs just after the close between 4-4.10pm  (*99 point range* in 10 minutes!

F+D continued trending down after the SPI close (as did the DOW) and the *SPI gapped* open at 5.10pm (*Down 43 points*)

I closed the trade a few minutes later as all 4 Index's started to reverse back to the upside.

There is obviously some risk involved holding the SPI trade for 40 minutes unable to trade, but if the market swings against you, the option to take opposite positions on the F or Dax or Dow to cover is still available.

Certainly not fool proof but there is definitely correlation in how they move in certain conditions. Cheers.


----------



## InsvestoBoy (1 April 2020)

tech/a said:


> Barney
> Are you suggesting that the FTSE and or the DAX have some sort of link with the SPI?
> That the way they trade could affect the way the SPI trades?




Once the ASX shuts, SPI futs tend to track whatever index is open, no question about it

dark blue is SPI, light blue is DAX, orange is FTSE:



If you see big divergences on those charts, probably caused by currency fluctuation.


----------



## tech/a (2 April 2020)

Expensive close Barney.

Investor B

do your comparison over a period unlike this and tell me what you see.


----------



## barney (2 April 2020)

tech/a said:


> Expensive close Barney.
> 
> Investor B do your comparison over a period unlike this and tell me what you see.




Yeah certainly got smashed down as the Dow closed up shop but I'm too old to stay up all night anymore so the early close for me was and usually is the best option  If I'd let it run I would have needed an 80 point trailing Stop in place just to stay in the trade 

Re the comparison:- Daily correlations between the Ftse/Dax and SPI  can be pretty random during trading hours on the SPI but the ducks definitely line up better after the SPI closes/re-opens. Time of day suits me better as well


----------



## terryod8 (2 April 2020)

peter2 said:


> One of many possibilities. This classic will give us a "U" reversal.
> 
> View attachment 101190



Hi

How has the actual next couple of days compared to your chart?

I withdrew my money from our Managed Super and set up a SMSF. I'm wondering whether to enter the market, or wait a bit longer.


----------



## tech/a (2 April 2020)

Barney

If Im in a good move I have set a stop and Gone to bed
A good % of time I give back a very good profit as the stop is at B/E as soon
as I can get it there. That varies long and short ---- and timing.

But every now and again next morning is MAGIC! certainly of late.

In the past shutting up shop when Im done (usually an hr or so) was
by far the best and most profitable option.
But in these RARE times of Volatility and Prolonged Volatility holding with Minimal
risk is my choice.


----------



## Dona Ferentes (2 April 2020)

from being a "call the bottom of the falls" less than 2 weeks ago, some of the big money has changed direction. Previously







> "Given the price drops and selling we've seen so far, I believe this is a good time to invest, although of course it may prove not (to) have been the best time. No one can argue that you should spend all your money today ... but equally, no one can argue that you shouldn't spend any. The more you want to garner potential gains and don't mind mark-to-market losses, the more you should invest here."




but now more like







> ..".the market prices of assets have responded to the events and outlook (in a very micro sense, I feel last week’s bounce reflected too much optimism, but that’s me). I would say assets were priced fairly on Friday for the optimistic case but didn’t give enough scope for the possibility of worsening news. Thus my reaction to all the above is to expect asset prices to decline. You may or may not feel there’s still time to increase defensiveness ahead of potentially negative developments. *But the most important thing is to be ready to respond to and take advantage of declines*."




https://www.oaktreecapital.com/docs/default-source/memos/which-way-now.pdf


----------



## lindsayf (2 April 2020)

Re Techa's post....that is my approach in this market as well.  These trades will be big wins or breakeven.


----------



## InsvestoBoy (2 April 2020)

tech/a said:


> Investor B
> 
> do your comparison over a period unlike this and tell me what you see.




lol dude here is a thread from 2006 where you say this yourself:

https://www.aussiestockforums.com/posts/41841/ and two posts down from there is @wayneL saying the same thing.

Here's another post from Aug 2008 Broadway saying the same thing:
https://www.aussiestockforums.com/posts/325941/

Another post from Jul 2009 baxter saying the same thing:
https://www.aussiestockforums.com/t...-interactive-brokers.14075/page-4#post-467218

Everybody who watches knows, once the ASX is closed, SPI tends to track whatever big index is open.


----------



## tech/a (2 April 2020)

InsvestoBoy said:


> lol dude here is a thread from 2006 where you say this yourself:
> 
> https://www.aussiestockforums.com/posts/41841/ and two posts down from there is @wayneL saying the same thing.
> 
> ...




ROFL Dude
Back then there was correlation.
This un coupled back around 2010 ish after the crash.

Certainly in a world event which brings everyone in the same line
all will couple up again.
ROLF Dude love your work!


----------



## InsvestoBoy (2 April 2020)

tech/a said:


> ROFL Dude
> Back then there was correlation.
> This un coupled back around 2010 ish after the crash.
> 
> ...




15 min charts from random days in Jan 2020, before the event, showing 6PM AUS until 10AM AUS
08 Jan




10 Jan



13 Jan



15 Jan




21 Jan



24 Jan


----------



## finicky (2 April 2020)

Robert Milliner of WHSP *(SOL)* in this interview just a couple of days ago* is currently suggesting restraint with your cash:*

"Hoard your powder and keep it dry. That’s the key message from billionaire Robert Millner, Chairman of Washington H Soul Pattinson (WHSP), for investors in response to COVID-19.

“If I can give a little bit of advice: I think everybody should keep as much cash as you have. Be patient and keep well.”

You can bet they're currently eyeing off buying prospects though. A couple of  'themes' interesting them:

*Ready to pounce*

Millner said that while asset valuations were racing away in 2019, largely unsupported by growth in company earnings, WHSP remained cautious, and has positioned itself to have the financial capacity to make new investments during a market correction.

He wouldn’t say if any particular sector of the market had piqued his interest, but mentioned the desire for “cash-generating businesses run by good people”.

In October 2019, WHSP formed a partnership with Provectus Care, an *aged care and retirement living* operator, to build and operate luxury independent living accommodation for retirees. The company has committed to fully fund the acquisition of its first site in NSW for $39 million.

“We’re very bullish on this market, particularly at the top end - there’s a drastic shortage of very good facilities. I think this is an area where we can go leaps and bounds and we’re very confident.”

In 2H19, the company also spent $100 million acquiring a portfolio of *land and water-based agricultural assets* across Australia. The portfolio produces a range of commodities including citrus, macadamias and cotton and is part of Millner’s view on Australia’s as a food source for the world.

Full article at:
https://www.livewiremarkets.com/wir...one-of-australia-s-most-experienced-investors


----------



## InsvestoBoy (2 April 2020)

Thanks @finicky, made me look up the SOL chart, they certainly have an interesting total return equity curve that I respect.


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## peter2 (2 April 2020)

terryod8 said:


> How has the actual next couple of days compared to your chart?




After I posted that diagram the market continued lower for many days. This rally is probably the automatic reaction (AR). The virus numbers in the US are getting worse as expected. It looks likely that our market may test the recent low as people realise that the lock down will be longer than first thought. There's no need to invest quickly. Hang on to your cash for now and research which companies you'll most likely invest in. Now or soon will be a good time to start to establish a profitable equity portfolio. I'd be thinking about growth rather than divs. I anticipate that many divs will be reduced or postponed for a while.


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## tech/a (2 April 2020)

Inv

There is certainly Divergence through all of the charts and there is certainly correlation.
If Im to use it as a predictive tool then I should be looking at the hard right edge of the page
at open for the SPI.
Again I see Correlation and divergence.
about 50/50 so no edge.


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## InsvestoBoy (2 April 2020)

tech/a said:


> Inv
> 
> There is certainly Divergence through all of the charts and there is certainly correlation.
> If Im to use it as a predictive tool then I should be looking at the hard right edge of the page
> ...




They are priced in different currencies.


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## tech/a (2 April 2020)

That doesn't Affect the Divergence!

Look at the hard right of 15/1 and 21/1
Divergence
24/1 Correlation.

15/1
2.15 approx Divergence FTSE.
Most of the rest Correlation.
Don't see an edge.
Can you show me what Im missing?

Take a look at now Dax is +170 and we are down 100
no tracking here


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## kid hustlr (2 April 2020)

T/A have ALWAYS enjoy your work but I firmly disagree with the concept of placing your stop at B/E.

Stops should be placed based on market analysis, not your P&L.

Apologies to nit pick the one thing i disagree with over the millions of things you have taught me


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## tech/a (2 April 2020)

*That's OK* you can disagree.

T/A has a life span and in short time frames that life span is 
shorter and less effective than longer time frames.

I dont mind a tick or two loss or B/E.
If Im going to sleep and leave a trade on Im going to set a 
stop at B/E even if 100 ticks + on my side.

No way am I setting a hard technical stop with a 30 tick spread 
from B/E and going to sleep no matter how good it looks.


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## Smurf1976 (5 April 2020)

gartley said:


> Hopefully this rally can carry through to the 38.2 and 50% retracement range. 5700 could be looking acheivable with Hurst price projection of 5664



Just wondering if you have any thoughts on the market action since this post?

My thoughts are mixed - Oil's up, speculative things such as Bitcoin still going up but the ASX doesn't seem at all convincing. That's not based on analysis comparable to yours though, it's just an observation.


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## InsvestoBoy (6 April 2020)

Here's a bearish thought to start the week. I had two, but I can only remember one:

For decades now, every payday, 9.5% of the productive capacity of the working class is going into stocks and bonds, mostly Aussie ones. That's a bid for BHP, CBA, WOW, COL, WES, etc, every time someone gets paid.

Those bids are undoubtedly going to dry up in a big way regardless of Government stimulus.

At the same time the very same Super accounts where bids will be drying up will actually, in some cases, be sellers to get their "Super stimulus".

Aside from a loss of marginal bids from Super into the secondary market of existing securities, this is also going to mean Super funds aren't going to be "reaching for yield" on new deals without fresh cash coming in! 

Cost of capital for businesses is going to go up. Listed firms will need to issue shares at lower prices. Unlisted firms will issue bonds at wider spreads.


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## Dona Ferentes (6 April 2020)

InsvestoBoy said:


> Here's a bearish thought to start the week. I had two, but I can only remember one....
> Cost of capital for businesses is going to go up. Listed firms will need to issue shares at lower prices. Unlisted firms will issue bonds at wider spreads.



There's enough content in that to count for two thoughts.

I think the 'deeply discounted capital raisings' will turn from a trickle to a flood. Balance sheets must be impacted by the speed of the downturn.


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## gartley (6 April 2020)

Smurf1976 said:


> Just wondering if you have any thoughts on the market action since this post?
> 
> My thoughts are mixed - Oil's up, speculative things such as Bitcoin still going up but the ASX doesn't seem at all convincing. That's not based on analysis comparable to yours though, it's just an observation.




Last week was very messy, typical of a b wave . Hopefully this week we will break out of the consolidation


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## Iggy_Pop (6 April 2020)

terryod8 said:


> Hi
> 
> How has the actual next couple of days compared to your chart?
> 
> I withdrew my money from our Managed Super and set up a SMSF. I'm wondering whether to enter the market, or wait a bit longer.



Terry, if you are have set up a SMSF, I assume you would have a plan on what you intend to do. Key shares at a buy price and a sell price, or do you plan to use ETFs. Also do you a percentage allocation to the different asset categories??  Have you discussed any plans with an expert??

Iggy


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## InsvestoBoy (6 April 2020)

I remembered my other bearish thought:

This is continuing the train of thinking here: https://www.aussiestockforums.com/threads/xao-bull.30571/page-9#post-1039074, but exacerbated by all this COVID biz.

Savers => interest rates down already
Investors => dividends cut or will be cut soon

So it isn't just the young cafe workers or whoever that are getting their incomes reduced.

If you rely on financial assets for income in retirement, probably you're going to start needing to sell some chunks to get income?

@Bill M I know you are an investor for dividend income, if dividends get drastically cut this year, what kind of actions will you take?


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## sptrawler (6 April 2020)

InsvestoBoy said:


> I remembered my other bearish thought:
> 
> This is continuing the train of thinking here: https://www.aussiestockforums.com/threads/xao-bull.30571/page-9#post-1039074, but exacerbated by all this COVID biz.
> 
> ...



There is a bit of a time lag for the retired investor, I know in my case a lot of the dividends for this financial year are already in, Nab and WBC pay the final dividend next financial year.
So far the dividends haven't been hit a lot and in August/Sept the franking credit will come from the ATO, therefore it will be next financial year I cop the hit.
The other thing of course is the minimum withdrawl, has been halved, so one doesn't have to pull as much out from super.
I would think Bill M, same as I has a cash reserve, for just such an occasion as has presented ATM.
But I do look forward to his comments, as they are always constructive.


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## qldfrog (6 April 2020)

sptrawler said:


> There is a bit of a time lag for the retired investor, I know in my case a lot of the dividends for this financial year are already in, Nab and WBC pay the final dividend next financial year.
> So far the dividends haven't been hit a lot and in August/Sept the franking credit will come from the ATO, therefore it will be next financial year I cop the hit.
> The other thing of course is the minimum withdrawl, has been halved, so one doesn't have to pull as much out from super.
> I would think Bill M, same as I has a cash reserve, for just such an occasion as has presented ATM.
> But I do look forward to his comments, as they are always constructive.



I would assume most people in that situation would have a bit of cash kept for that purpose: 1 year or 2 so doubt SMSF will sell because they are squeezed..but they might sell as tactical change of assets
Why would you take risk with no gain vs even an awful TD?


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## Bill M (6 April 2020)

InsvestoBoy said:


> @Bill M I know you are an investor for dividend income, if dividends get drastically cut this year, what kind of actions will you take?




I sold 1/3 of my shares in Super in January and the rest I am letting ride. The 1/3 I sold off I plan to drip feed back into the sharemarket.

To answer your question specifically, if ETF's halve in distributions then I am still 2 times better off than term deposits. And yes my term deposits are only returning 1.4% right now. If I have to then I will simply draw down on some capital which I have in cash reserves earning 1.85%. I also have some in RateSetter still getting around 7% interest which is pretty good. Here is the latest interest payments as of 6.40 PM today screenshot.



In the mean time I'm trying to second guess a market bottom at which time I'll put more into the sharemarket.

But right now there are a couple of little side bets that I have taken. One was buying the ETF USD when the AUD was .66c to the USD. That has already run it's course and I cashed in. The other is gold and silver. I've been buying and selling a bit of that on the side and I will tell you this with absolute certainty. There is very little 999 bullion gold and silver physical about right now. Premiums have widened for what there is left. Gold is around $2700 now, 3 Months ago it was $2200. If you know when, how and where to buy and sell effectively you can make some $$$. There is more than one way to skin a cat, cheers.


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## OmegaTrader (6 April 2020)

Some hypothesises
After the dust has settled, given such low rates

Property
1) Investor faced 3-5% rental yield looks terrific
2) Renter faced with a retail loan rates 2-3%  buying also looks terrific
3) This will lead to a re pumping of property debt and prices

Gov debt
1) We are not japan yet but if things continue we will be long time away
stage one lower interest rates
stage two support bond prices
stage three central bank buys bonds to finance deficits of gov fiscal spending
stage four  your stuffed unless you default



2) Because we are not japan etc We will be able to spend out of this one. We are not at the end stages yet
3) It is not a 1929 crash, this is not the one to crash property, banks -everything
Interest repayments will be low and the gov only needs a band aid, not buy out the whole system. Bull market will rage again.

Corona

1) What is the difference between today and 6 months ago, corona and the spillover effects only?
2) What about a second or third wave. We all feel like Heros , yay we won.
But what if it comes back, no one seems to be talking about that much


Some scenarios
1) This is a cyclical downturn , in which case we are near the bottom levels right now.
Corna virus peaks, it becomes like a flu and we get back to normal relatively quickly.Low rates justify a high Pe ratio. Lamenting about missing the bottom.

 unlikely?

2) The structural effects, forced selling and sentiment impact plus a potential second and third wave make this a dead cat bounce.


likely?

Some random thoughts
What about a sideways scenario?
How much is CSL distorting everything?
One day CSL earnings might actually disappoint
csl and the big banks are around 30% of the market.

Why do I still like reits?
yes its irrational given default risk+margin+inflation to loan at these rates but that is the market discount rate being enforced by the central bank/s


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## sptrawler (6 April 2020)

qldfrog said:


> I would assume most people in that situation would have a bit of cash kept for that purpose: 1 year or 2 so doubt SMSF will sell because they are squeezed..but they might sell as tactical change of assets
> Why would you take risk with no gain vs even an awful TD?



I hold a smallish slush fund acct and a large TD, the TD hasn't been earning much over the last 6-7 years, but the interest it has earned has compounded and will pay my pension for next year.
Then it can start ticking over again and hopefully be ready for the next 'once in a lifetime event' to happen.
The shares will just have to sit there untill they recover, if the banks drop their dividend, then I will be relying on the LIC's and the franking credits next year.


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## finicky (6 April 2020)

Not often you see this guy pessimistic.


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## aus_trader (6 April 2020)

finicky said:


> Not often you see this guy pessimistic.




Good video, thanks for that. Gives both sides of the argument and is genuinely honest about the possibility that we may not have seen the bottom yet...


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## moXJO (7 April 2020)

US banking on inflation or something?


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## Bill M (7 April 2020)

finicky said:


> Not often you see this guy pessimistic.




I have never heard of the person in the video or seen him before. However his message seems to be so powerful and I think pretty close to the mark. I think everyone should watch it and just take a deep breath and think about whats going on in the world right now. Protect your nest egg, thanks for posting it, cheers.


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## $20shoes (7 April 2020)

That guys mentions we may pull out of this in 3-5 years, or it may be as long as 25 years.
That correlates to two possible wave counts I posted here for the S&P500 S&P 500 Seasonal Low
and depends on if you interpret Grand Super Cycle Wave 5 - that likely commenced at the GFC low - as over or only just beginning. For those who do not follow Elliott waves, these are only possibilities and not a certainty.


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## sptrawler (7 April 2020)

WBC and NAB report soon, it will be interesting reading IMO and will give an indication of the underlying money flow issues.
Just my thoughts.


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## gartley (7 April 2020)

$20shoes said:


> That guys mentions we may pull out of this in 3-5 years, or it may be as long as 25 years.
> That correlates to two possible wave counts I posted here for the S&P500 S&P 500 Seasonal Low
> and depends on if you interpret Grand Super Cycle Wave 5 - that likely commenced at the GFC low - as over or only just beginning. For those who do not follow Elliott waves, these are only possibilities and not a certainty.



Anything is possible in these markets, look at Japans N225 index which has been in a bear since 1990. Solution: Trade the market in front you....


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## aus_trader (7 April 2020)

sptrawler said:


> WBC and NAB report soon, it will be interesting reading IMO and will give an indication of the underlying money flow issues.
> Just my thoughts.



Dividend cuts and branch closures of some of the banks are in anticipation of some damage I guess. The real numbers will be interesting but may not show the full extent of what is happening since all this unravelled in a month. So let's say if a small business were to temporarily lose customers or to put a "Closed" sign on the front door, the business owner would most likely be still making the repayments on any loans from previous cash flows and existing reserves I would think.

It is the same thing happening in the USA. Indices are rising rapidly (see below as they had one of the best days last night). This is despite the unemployment rising to +10x of those experienced in the worst of the GFC depths. So although I am not a fan of 'Doom and Gloom' I agree with fellow ASF members that perhaps the reality check may only happen when all the numbers get reported and that may take several quarters to play out I think.


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## matty77 (7 April 2020)

@finicky 

great video thanks for the post, I believe there is a fair bit that is still to happen to the markets on the downside, and I am guessing that by years end if you can say you only lost 10% you will be doing well. Dont burn all your cash now as it may be deployed better later on. Worth thinking about, is it worth missing some profits to protect your nest egg, or going for gold and losing 50% and taking 5 years to recover? I guess it depends on your risk profile..

cheers


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## MrChow (7 April 2020)

Graph is a couple weeks out of date but illustrated a possible type of pattern to expect:







So what determines how much the market will fall at it's worst may not be demonstrated in the first 6 months (as they may follow similar patterns despite different end results).  Instead it's what happens after this initial phase.

1987 escaped without any credit issues for a recovery in 2 years.
1929 had bank collapses the following year for the great depression.
2020 ...


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## basilio (8 April 2020)

MrChow said:


> So what determines how much the market will fall at it's worst may not be demonstrated in the first 6 months (as they may follow similar patterns despite different end results). Instead it's what happens after this initial phase.




Plus 1.  I can see how Australia will get on top of this pandemic with the current policies. I believe the governments economic support packages will keep the economy and our society reasonably steady for the next few months. 

But looking ahead there are so  many  consequential critical problems on the horizon....


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## Dona Ferentes (8 April 2020)

finicky said:


> Not often you see this guy pessimistic.




Who is This Guy? He's on the money..


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## finicky (8 April 2020)

Clifford Bennett is quite a big picture contrarian and I first came upon his views on a Switzer segment on the Sky Business Channel I think. You win some and lose some but I think he adjusted his 'grand bull market' view pretty quickly as he read the implications of cv19.

His youtube channel is: CBTV

"Clifford Bennet  is  well  known  for  "ringing  the  bell"  for  a  new  Grand  Bull  Market  in  global  equity  markets  on  the  Switzer  Show,  just  two  days  after  the  absolute  low  in  March  2009,  suggesting  a  5-15  year  new  bull  market  had  just  commenced.  Proven  remarkably  correct  10  years  on  and  with  400% gains  being  seen  in  the  US  stock  market.  In 2010,  Clifford  forecast  the Dow  Jones  would  hit  30,000 at  the  end  of  this  decade"
http://www.cliffordbennett.com.au/about


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## MrChow (8 April 2020)

I like hearing different point of views of where we may end up over the medium-long term.

He seems to be predicting an L shaped recovery where businesses will take longer to reopen and even when they do demand will remain depressed.

I see more of a W shape where there is clear air for most of the next couple quarters.

Then comes the stressors for a 2nd half capitulation.  Stimulus has projected for a 6 month downturn where big expenses / debts have been government paid, delayed or acculumulated to an upper limit.  However any secondary virus waves requiring further economic freezes has the capability of breaking the financial system similiar to the GFC.

Example - AFL is able to pay its essentials for the next 6 months to survive with a $500m loan from NAB and ANZ.  What is Plan B if Coronavirus returns intermittently until a vaccine and they are unable to put on a product this time next year?  If there is no further credit available they may never recover (they'll likely play behind closed doors instead of going up but other businesses on the brink don't have that lever).

Bottom line is the world has a few months to prepare for next U.S and Europe flu season (when the 1918, 1957, 1968 viruses actually peaked) and we can't fail when it hits.


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## aus_trader (8 April 2020)

MrChow said:


> He seems to be predicting an L shaped recovery where businesses will take longer to reopen and even when they do demand will remain depressed.
> 
> I see more of a W shape where there is clear air for most of the next couple quarters.




I think the L prediction was made earlier in the panic selling phase while the prices were plunging. That prediction is not playing out. Based on current price patterns a W is quite likely scenario, on both local and US markets...


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## satanoperca (8 April 2020)

MrChow said:


> Example - AFL is able to pay its essentials for the next 6 months to survive with a $500m loan from NAB and ANZ.  What is Plan B if Coronavirus returns intermittently until a vaccine and they are unable to put on a product this time next year?  If there is no further credit available they may never recover (they'll likely play behind closed doors instead of going up but other businesses on the brink don't have that lever).




They are screwed, but it is only a sport, not survival.


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## Smurf1976 (8 April 2020)

MrChow said:


> Example - AFL is able to pay its essentials for the next 6 months to survive with a $500m loan from NAB and ANZ. What is Plan B if Coronavirus returns intermittently until a vaccine and they are unable to put on a product this time next year? If there is no further credit available they may never recover (they'll likely play behind closed doors instead of going up but other businesses on the brink don't have that lever).




Using the AFL example and assuming you're referring to football not AF Legal Group some other risks come to mind:

1. Even if they are physically permitted to do so, to what extent will the public be able and willing to spend the cost of attending football (or any other paid entertainment)?

2. To what extent will TV networks be willing to pay for the rights to broadcast? If advertising revenue slumps, you can be pretty sure that so too will the amount they're willing to pay.

3. Sponsors and the amount they're willing to pay to get their name on a jumper or beside the ground etc.

If the broader economy falls in a heap then it would be at least somewhat difficult for professional sport to keep the same level of money rolling in.


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## sptrawler (8 April 2020)

I think AFL is in a stronger financial position, than a lot of sports, it sounds as though Rugby Australia is in real trouble already.
The other problem for Rugby I would think, is the fact that NSW is being hit the hardest with the virus and is the main money area for Rugby. 
Cricket is going into the off season, but the overseas contracts wont be there for the players, it is really turning into a mess with no end in sight.


----------



## peter2 (9 April 2020)

There's an increasing possibility that we've seen the bottom. I've been anticipating another swing down to test the recent low but the market has been very reluctant to go lower. The upcoming batch of US earnings will be starting soon and this may trigger a dip as the looming economic recession becomes apparent. 

I'm missing out on most of this rally but I don't want to chase it higher only to be disappointed if the market does fall again.


----------



## InsvestoBoy (9 April 2020)

peter2 said:


> There's an increasing possibility that we've seen the bottom. I've been anticipating another swing down to test the recent low but the market has been very reluctant to go lower. The upcoming batch of US earnings will be starting soon and this may trigger a dip as the looming economic recession becomes apparent.
> 
> I'm missing out on most of this rally but I don't want to chase it higher only to be disappointed if the market does fall again.




Funny because my read on the price action, at least for XJO, is that the market is very reluctant to go higher. It might not want to go down, but it sure doesn't like going up.


----------



## InsvestoBoy (9 April 2020)

sptrawler said:


> I think AFL is in a stronger financial position, than a lot of sports, it sounds as though Rugby Australia is in real trouble already.
> The other problem for Rugby I would think, is the fact that NSW is being hit the hardest with the virus and is the main money area for Rugby.
> Cricket is going into the off season, but the overseas contracts wont be there for the players, it is really turning into a mess with no end in sight.




Speaking of sports,


----------



## peter2 (9 April 2020)

My comments pertained to the equity markets in general.  Today's price action in the ASX was very bullish. This may not be apparent in the banks and the top 20 but buyers were happy to pile into riskier equities (XSO and XEC). Did we see a panic selloff just before the close today, knowing that it's a extra long weekend for the ASX?  FOMO is alive and well in the ASX today.


----------



## Betavegeta (9 April 2020)

Wimbledon, a low key pro investor


----------



## InsvestoBoy (9 April 2020)

peter2 said:


> My comments pertained to the equity markets in general.  Today's price action in the ASX was very bullish. This may not be apparent in the banks and the top 20 but buyers were happy to pile into riskier equities (XSO and XEC). Did we see a panic selloff just before the close today, knowing that it's a extra long weekend for the ASX?  FOMO is alive and well in the ASX today.




Maybe it was panic short covering just before the close today, knowing that it's an extra long weekend for the ASX?

Maybe bidders on the close knowing they can hedge in the US markets?

I wouldn't call it FOMO.

Don't get me wrong, you're talking to someone who has been buying on the 11th, 13th and 23rd March, covered deep in the money puts on 23rd March and made this post the next day: https://www.aussiestockforums.com/threads/xao-banter-thread.17461/page-160#post-1063655 ...so if we hit that 0.382 retrace in overnight trading, I'll hardly be surprised, but I sure notice what looks like a lot of huge block sells and what I'm reading indicates this move up isn't bullish action, just short covering.


----------



## MrChow (9 April 2020)

RSI still has a way to go to the upside especially on the XAO.

Usually I don't look at technicals but that seems as good an explanation at the moment.


----------



## hja (9 April 2020)

peter2 said:


> My comments pertained to the equity markets in general.  Today's price action in the ASX was very bullish. This may not be apparent in the banks and the top 20 but buyers were happy to pile into riskier equities (XSO and XEC). Did we see a panic selloff just before the close today, knowing that it's a extra long weekend for the ASX?  FOMO is alive and well in the ASX today.



At least this is the first decent sustained pullback rally which is deep and with slightly more volume than the small sideways one of early March. But it'll still be a while till the dust settles I reckon.


----------



## Smurf1976 (9 April 2020)

Betavegeta said:


> Wimbledon, a low key pro investor




Given they're well known as being a somewhat conservative organisation in all regards and have a history that goes back 150 or so years, they've probably got a pretty thorough "no stone unturned" approach to financial risk.

There's a lesson in there - an organisation that is neither a financial nor a medical one but they identified and protected themselves from a risk that most others ignored.


----------



## flightcrank (9 April 2020)

It seems bizzare that the asx is rallying up, even if we are flattening the curve. We will still be stuck on restrictions for some time. The longer it drags on the more it should fall. Or at least stagnate.


----------



## tinhat (9 April 2020)

flightcrank said:


> It seems bizzare that the asx is rallying up, even if we are flattening the curve. We will still be stuck on restrictions for some time. The longer it drags on the more it should fall. Or at least stagnate.




Money does strange things to people. The world is being run be sociopaths. No point rationalising things except to understand that the reckoning will come. The toilet paper will return and recession will hit big time.


----------



## sptrawler (10 April 2020)

tinhat said:


> Money does strange things to people. The world is being run be sociopaths. No point rationalising things except to understand that the reckoning will come. The toilet paper will return and recession will hit big time.



I think that is spot on, there is an exuberance probably helped by the insto's, but as the chart guys on the forum are saying pick the top, before we go over the hill. Unless this is the hill now and things improve quickly.
Just my take.
There will be a huge slide when the next reporting season comes in, but there will be some fantastic opportunities, we are not going to go back and live in caves, we are not going to even go back to growing our vegies.
So IMO remember life will go on, the capitalist system will go on and things will recover.
Don't forget these are the opportunities that set you up for the rest of your life, be disciplined, be cautious and pick great companies that will be there after the rout.
I'm no expert, but I have missed out on enough opportunities to know one is going to present, or is presenting ATM, in this crisis.
Again just my opinion.


----------



## Smurf1976 (10 April 2020)

tinhat said:


> Money does strange things to people. The world is being run be sociopaths. No point rationalising things except to understand that the reckoning will come.



I see the market as having a lot in common with the fact that Perth is having a heatwave at the moment.

The heatwave doesn't change the fact that it's now almost half way through April and we're rapidly running out of days where such a thing is even possible with winter fast approaching. Much the same with the market in my view - sure it's warming up at the moment but we're heading toward winter not summer so far as the seasons are concerned.


----------



## wayneL (10 April 2020)

flightcrank said:


> It seems bizzare that the asx is rallying up, even if we are flattening the curve. We will still be stuck on restrictions for some time. The longer it drags on the more it should fall. Or at least stagnate.



Might have something to do with the trillions upon trillions of helicopter money around the world, no?


----------



## tinhat (10 April 2020)

Smurf1976 said:


> I see the market as having a lot in common with the fact that Perth is having a heatwave at the moment.
> 
> The heatwave doesn't change the fact that it's now almost half way through April and we're rapidly running out of days where such a thing is even possible with winter fast approaching. Much the same with the market in my view - sure it's warming up at the moment but we're heading toward winter not summer so far as the seasons are concerned.




Bless you brother/sister. I was on the last Tiger Air flight out of Perth to Sydney.

Stay safe.


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## InsvestoBoy (11 April 2020)

wayneL said:


> Might have something to do with the trillions upon trillions of helicopter money around the world, no?




Maybe markets are reflexive and deep declines are nearly always followed by vicious rallies?


----------



## Knobby22 (11 April 2020)

wayneL said:


> Might have something to do with the trillions upon trillions of helicopter money around the world, no?



Isn't the US treasury going to buy junk bonds now?


----------



## Klogg (11 April 2020)

For what it's worth - I can't say I'm seeing a lot that's terribly cheap.

ADH is one possibility (I hold) given it was at 3 times EBIT, but nothing else is really prices for destruction as far as I can tell. 

Big 4 banks are almost certainly priced too high. 

RMC and MNY seem reasonably cheap, but you'd want to understand them rather well. I can't say that I do...

I don't deal with commodities, so I can't comment on that space.


----------



## fiftyeight (11 April 2020)

Smurf1976 said:


> Given they're well known as being a somewhat conservative organisation in all regards and have a history that goes back 150 or so years, they've probably got a pretty thorough "no stone unturned" approach to financial risk.
> 
> There's a lesson in there - an organisation that is neither a financial nor a medical one but they identified and protected themselves from a risk that most others ignored.




I can't even imagine the secondary+ effects if everyone was this risk averse, not saying I disagree with but....

Time to short the XSO and go long ILC???


----------



## aus_trader (13 April 2020)

fiftyeight said:


> Time to short the XSO and go long ILC???



Does that mean Large caps are immune? I am not so sure, but I guess time will tell...


----------



## flightcrank (13 April 2020)

Klogg said:


> For what it's worth - I can't say I'm seeing a lot that's terribly cheap.
> 
> Big 4 banks are almost certainly priced too high.




They still trading noticeably lower than they were in the last months before the pandemic. They will bounce back to those heights over the long term.


----------



## aus_trader (13 April 2020)

flightcrank said:


> They still trading noticeably lower than they were in the last months before the pandemic. They will bounce back to those heights over the long term.



Are you sure ?


----------



## wayneL (13 April 2020)

flightcrank said:


> They still trading noticeably lower than they were in the last months before the pandemic. They will bounce back to those heights over the long term.



How long is the term you're thinking?

Months?
Years?
Decades?

I can't wait for earnings season.


----------



## frugal.rock (13 April 2020)

Seemingly, the term length will be governed by the situation.
Talk of overseas travel bans until the end of the year...etc.


----------



## fiftyeight (13 April 2020)

aus_trader said:


> Does that mean Large caps are immune? I am not so sure, but I guess time will tell...




No not at all, but the spread between 2 may increase


----------



## flightcrank (13 April 2020)

wayneL said:


> How long is the term you're thinking?
> 
> Months?
> Years?
> Decades?




How is months long term?

Think 5 - 10 years from current levels


----------



## wayneL (13 April 2020)

flightcrank said:


> How is months long term?
> 
> Think 5 - 10 years from current levels



It's bloody long term if your normal trade horizon is a few minutes


----------



## aus_trader (15 April 2020)

fiftyeight said:


> No not at all, but the spread between 2 may increase



Interesting. Not happening in the short term though. It's the small caps that are having a big rally at this point in time. But that could be short lived if there is any hiccup in the current rally. The punters will run for their life, so you might be proven right eventually...


----------



## InsvestoBoy (15 April 2020)

InsvestoBoy said:


> Not the same for Australia, please post supporting data.
> 
> Most recent GDP figures for Q4 2019 put annual GDP at $1,994,874,000,000.
> 
> ...




The latest data from ASX is updated with March total market cap.

I see the IMF is forecasting GDP to fall in AU by 6.7% this year.
https://www.abc.net.au/news/2020-04...onavirus-growth-hit/12147818?section=business

Plugging last sum of last 4 quarters GDP * 0.933 into the spreadsheet withthe March market cap figure puts TMC/GDP at ~85%.





which would put us approx in the "Fair Valued" category (based on assumptions from US markets)


----------



## qldfrog (15 April 2020)

InsvestoBoy said:


> The latest data from ASX is updated with March total market cap.
> 
> I see the IMF is forecasting GDP to fall in AU by 6.7% this year.
> https://www.abc.net.au/news/2020-04...onavirus-growth-hit/12147818?section=business
> ...



Fair but on the high side, so not a bargain and this is based on march market (low) vs march GDP(high)
It is quite reasonable to assume we are now lightly overvalued based on April figures?
Not trying to fight for the sake of it; glass half empty or half full: for me still overvalued at yesterday's price
But who has to say market has to be fair valued in either short or even medium term
Thanks for the graph


----------



## finicky (17 April 2020)

Is this a useful 'template' for the Chinese Communist Party inflicted bear market of 2020?
From an AFR article this morning:

"During the dotcom crash, the S&P 500 *fell* 27 per cent, *rose* 19 per cent *fell* 26 per cent, *rose* 22 per cent and then *fell* 33 per cent. 
During the global financial crisis the index *fell* 18 per cent, *rose* 12 per cent, *fell* 47 per cent, *rose* 25 per cent and then *fell* 27 per cent."

So each bear market predecessor had *5 waves* and we're only in a wave 2 rally if history is repeating.

In today's same AFR Chanticleer article - research house, 'Investment Trends'' survey  of retail investors taken last Saturday found that *66 per cent think the market will go up over the next 12 months*, omg
No way I do, how about you? I must admit though that I have fallen in line so far with 30-40% of other retail investors by *adding* to my holdings. The bulk of retails are staying steady in their holdings with a small minority reducing their holdings according to this 'research'.
(Source: my rough editing of AFR's Chanticleer article today, Friday 17 April)


----------



## waterbottle (17 April 2020)

Has there ever been a V-shaped recovery?

There have been some great posts in this thread over the past few weeks, although all of them are speculative. I don't think anyone can truthfully predict what will happen.
Although governments have dropped the ball globally (really, there hasn't been any single government that had responded to COVID-19 according to what the 'experts' have been calling for) the coordinated, international response has been precise and effective.
There has never been a time in human history when the majority of western governments have agreed to pay 70-80% of an employee's salary without them having to do any work.
There has never been a time when economic activity could still occur in a virtual world and without physical proximity

I think the responses we have seen from governments has set the floor. Citizens will have access to funds which can be spent to access necessities that will lead to profit for companies.
The economy will survive and there will be a readjustment phase, but unless there is some secondary shock I don't see why we should be heading any lower just...


----------



## finicky (17 April 2020)

This is a good pictorial comparison I found.
*
S&P 500 Index Chart Long-Term Chart*
By  Chris Kimble
April 13, 2020

"Over the past two weeks the stock market has rallied sharply, seeing the S&P 500 retrace 50 percent of the 2020 market crash. The quick burst higher has many feeling a sense of relief… but could this be an ominous sign?

The past two market crashes in 2000 & 2007 saw the broad stock market index put in a March low at each (1) before rallying and peaking at its 50 percent Fibonacci retracement level at each (2). This then led to an acceleration of selling and new bear market lows.

Could this be happening again this year? The S&P 500 put in a crash low in March before rallying back to its 50 percent Fib retracement level at (3).

Is history repeating right on time? Is the bear market rally setting up a giant bull trap? Bulls sure hope not. "


----------



## waterbottle (17 April 2020)

Yes, this is a risk that needs to be accounted for but I personally think the bigger risk would be a loss of opportunity.


----------



## aus_trader (18 April 2020)

waterbottle said:


> Has there ever been a V-shaped recovery?



Yes there have been quite recently actually. The unknown drop in late 2018 had a beautiful V-shaped recovery and went onto make new highs as nothing ever happened. When there is no clear reason, stock market commentators and news web sites make fancy guesses at what caused it, like *6 reasons* for the drop 




Here is the V-shape that happened, text book style:



Current situation is different. Even if there are no new infections and restrictions are lifted, it'll take a long time to get the economy to run at full steam. It'll also take a mighty rally to make it a V-shaped recovery to get ASX All Ord's back to over 7000.

I don't know what'll happen but I think a perfect V-shaped recovery like the late 2018 through to early 2019 is unlikely. Based on current trajectory, a V-shaped recovery means back to top before the end of this year, which I doubt. It may take quite a few years to make new high's. In the meantime chartists here can have some fun predicting the future : slowly grind up, go sideways for ages, slowly grind down or Zig-Zag up and down with massive volatility till traders have thrown in the towel.


----------



## MrChow (18 April 2020)

I think we'll see a rally peak by end of month at around 5800 and then a long hibernation period between May-October where the market will dip but basically end up flat for this period.

Then if there's good news in terms of technology and therapeutics which allows the secondary waves to be contained on an individual / group basis rather than mass shutdowns then the market could make another move up the 6000s during November-January.


----------



## aus_trader (18 April 2020)

MrChow said:


> I think we'll see a rally peak by end of month at around 5800 and then a long hibernation period between May-October where the market will dip but basically end up flat for this period.
> 
> Then if there's good news in terms of technology and therapeutics which allows the secondary waves to be contained on an individual / group basis rather than mass shutdowns then the market could make another move up the 6000s during November-January.



That's the slow grind up scenario, which I think has better odds unfolding, given the level of uncertainty.


----------



## waterbottle (18 April 2020)

MrChow said:


> I think we'll see a rally peak by end of month at around 5800 and then a long hibernation period between May-October where the market will dip but basically end up flat for this period.
> 
> Then if there's good news in terms of technology and therapeutics which allows the secondary waves to be contained on an individual / group basis rather than mass shutdowns then the market could make another move up the 6000s during November-January.






aus_trader said:


> That's the slow grind up scenario, which I think has better odds unfolding, given the level of uncertainty.




I would agree with a slow grind up, purely based on the fact that governments are trying to sustain an economy that businesses are trying to evolve into


----------



## moXJO (18 April 2020)

Dow seems to be chomping at the bit. All this stimulus money and the "Rah Rah" nature of the yanks dying to get back to work. Then we have this new treatment on top. Fear has disappeared.
Sentiment feels like a coiled spring right now.
I did not expect the market to jump that high


----------



## Bazzi (18 April 2020)

aus_trader said:


> That's the slow grind up scenario, which I think has better odds unfolding, given the level of uncertainty.




The link below is interesting read and seems more pessimistic than the mentioned here 

https://www.livewiremarkets.com/wir...lows-the-bigger-question-is-what-happens-next


----------



## Garpal Gumnut (18 April 2020)

There is a vigorous mug's rally afoot. 

gg


----------



## finicky (18 April 2020)

@ Bazzi Yes, interesting link, hadn't considered the *1987* 'short sharp shock' as another possible 'road map'

Either way we should see a *retest of lows* within weeks:
"In 13 of the previous 15 sharp corrections in global equities, the market retested its lows several weeks after the initial low. Don’t be surprised if that happens and it will happen quickly." Chris Watling Longview Economics

From the article:


----------



## aus_trader (18 April 2020)

There is a real risk of a 2nd wave if USA tries to force itself out of the slow down by opening everything up again too soon. Trump got it wrong this time and could get it wrong once again if all he cares about is growth at all costs.


----------



## Dona Ferentes (18 April 2020)

moXJO said:


> Dow seems to be chomping at the bit. All this stimulus money and the "Rah Rah" nature of the *yanks dying to get back to work.* Then we have this new treatment on top. Fear has disappeared.
> Sentiment feels like a coiled spring right now.
> I did not expect the market to jump that high



quite so.
_.....yanks dying [when they] get back to work_ ?!


----------



## Garpal Gumnut (18 April 2020)

In the presence of 

1. Many knowns and unknowns of all four types 
2. Many opinions
3. No consensus
4. Good health thus far
5. Sufficient water, food, a roof and sex.

I have elected to sit on my hands rather than do anything in the market.

I may be wrong.

Who knows?

gg


----------



## Smurf1976 (18 April 2020)

aus_trader said:


> There is a real risk of a 2nd wave if USA tries to force itself out of the slow down by opening everything up again too soon.



I have this in mind definitely as a possibility and being associated with a sharp decline in the markets either to re-test the lows or, more likely in my view, to new lows.

What I'm less confident about is how the ASX would perform in a scenario where the US goes to hell whilst Australia and NZ have contained the virus to the point of re-opening things?

Do we get caught up in the global sell off and go down hard?

Or does Australia become an obvious "safe haven" to the point that we could even go in the opposite direction?


----------



## Dona Ferentes (18 April 2020)

Smurf1976 said:


> Or does Australia become an obvious "safe haven"?



Despite the global inter-connectiveness, or maybe because of it, the 'economic contagion' is inescapable. But if we manage to get through, and manage a rebound, with our institutions and economy intact while other states fail, another consequence will likely be "Pandemic Refugees".


----------



## moXJO (18 April 2020)

Need a trigger event imo. Either earnings reports or deaths running away in the US. Perhaps some sort of diplomatic row with China. The other thing we have to think about is inflation I suppose. Interest rates ain't going up anytime soon. Plenty of money being printed off. Last time the gfc rolled around didn't the US $ get lowered in the years after. 

Won't every country be trying to inflate away this mess?


----------



## Smurf1976 (18 April 2020)

moXJO said:


> Either earnings reports or deaths running away in the US. Perhaps some sort of diplomatic row with China.




Looking at those three examples, I'm thinking that it would be something of a miracle if at least one of them didn't occur in the not too distant future and we may well see all three.

I'm thinking it's a "when" not an "if" thing but that's impossible to prove until it happens or doesn't.


----------



## aus_trader (18 April 2020)

Trigger events are all there just haven't filtered through with the earnings numbers.

Rather than taking the US index as a whole I decided to look at the whole market to see what was really happening. Not just looking at the Advance/Decline ratios to get a quick assessment of how many companies are going down vs how many going up but the whole back breaking task of flicking through 5000 to 6000 odd companies and ending up with a massive headache. Don't believe me ?  Have look a few posts above and see the posts I made at 7am in the morning. That was the stock research night shift ending after starting on Friday evening.

I have learnt so much from ASF that it's my absolute pleasure to contribute my findings to fellow members. The market rebound is led mainly by just a few big cap leaders such as Microsoft, Amazon (already breaking out to the upside and making new high's), Facebook, Google, Apple and a few other tech stocks joining in. The wider market hasn't rallied with them. Most are down near the low's or have a small rally or even making new lows after only a miniscule rally. So the Index rally is really due to a few select stocks that make up the bulk of the weightings such as the FAANG stocks.

This is somewhat in contrast to the Aussie stocks, where the smaller speculative stocks have rallied hard including tech stocks such as APT. However the biggest weightings of the Index which are the big4 banks have not rallied back up.

Rather than the financial media theories in the news sites, I wanted to see the facts in front of me.


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## aus_trader (18 April 2020)

I forgot Netflix, that is also breaking out to all time high's. Fair enough too I guess in this case, as it's one business that could benefit in this situation as people are stuck at home watching all the Netflix movies and shows.


----------



## sptrawler (18 April 2020)

aus_trader said:


> I forgot Netflix, that is also breaking out to all time high's. Fair enough too I guess in this case, as it's one business that could benefit in this situation as people are stuck at home watching all the Netflix movies and shows.



The video rental shop we have used for ever, closed last month, guess it means the PVR will get a workout. Lol


----------



## OmegaTrader (18 April 2020)

aus_trader said:


> Trigger events are all there just haven't filtered through with the earnings numbers.
> 
> Rather than taking the US index as a whole I decided to look at the whole market to see what was really happening. Not just looking at the Advance/Decline ratios to get a quick assessment of how many companies are going down vs how many going up but the whole back breaking task of flicking through 5000 to 6000 odd companies and ending up with a massive headache. Don't believe me ?  Have look a few posts above and see the posts I made at 7am in the morning. That was the stock research night shift ending after starting on Friday evening.
> 
> ...



Do you have any more stats,charts  or info on this?


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## aus_trader (18 April 2020)

OmegaTrader said:


> Do you have any more stats,charts  or info on this?



My initial research was on Advance/Decline ratios on the major Indices which suggested that the wider market participation in the US stocks was lacking:










So it is already visually possible to gauge that NASDAQ tech stocks are showing and uptick in the A/D line with the rally while the S&P and Dow are showing a flat line. So it's already kind of obvious it was the tech stocks leading the rally and I just wanted to see which ones ?

I couldn't see a quick way to do it such as with a scan or some other means. By going through the lot I could see it was mainly the tech related stocks that were rallying especially the FAANG and other popular big caps. I didn't make any other notes or worked out stats, as flicking through them all was cumbersome enough. Just to gauge what the broader market was doing, most stock prices looked depressed, below are a couple of examples of what I saw:







Doesn't look like much of a recovery on those stocks, which was kind of typical of the bulk of stocks.

Here's Aussie 200 for comparison, showing there is some wider market participation in the rally, not just a few stocks rallying to lift the index:


----------



## InsvestoBoy (18 April 2020)

aus_trader said:


> but the whole back breaking task of flicking through 5000 to 6000 odd companies and ending up with a massive headache.




dude! Let me save your back and your head for future scans.

Here's the monthly ratio of SPY (S&P500 market cap weight) to RSP (S&P500 equal weight), total return, log scale, going back to 2000.



You can see the phenomena of narrowing breadth has been going on since 2015. The biggest move at the end of the chart is March.

This is a much easier way to visualise the kind of breadth you're trying to capture.

Here's SPY to the IWB (Russell 1000)



SPY to VTI (Vanguard Total US Market)


----------



## Knobby22 (18 April 2020)

So do you think this is a typical 50% sucker rally Austrader? I think you are one of the good thinkers.

I am usually pretty good at this stuff but it really is weird, funny money flowing all over the US with the President fighting the States.  I mean the US Treasury is buying junk bonds!

I am still thinking 2 mill dead in the USA but that doesn't seem to matter. Trump is causing instability deliberately to help it spread.

Money printing everywhere, will we get high inflation despite no GDP activity? I really have no idea and like Garpal Gumnut besides buying a few shares (MSB,PNV, SPL, BFG) when it really dropped low, am just staying out. Have heard rumours the USA treasury will next start buying stocks directly. The USA is seriously acting weird at the moment. So glad to be Australian. Got a feeling if I caught the virus it will kill me.

Drinking some rum and cokes so maybe sounding a bit you know.


----------



## OmegaTrader (18 April 2020)

aus_trader said:


> My initial research was on Advance/Decline ratios on the major Indices which suggested that the wider market participation in the US stocks was lacking:
> 
> View attachment 102431
> 
> ...



What is the take away from this?
Does this breadth keep increasing?
or do the leaders/broader market revert?


What is the play/ what does it tell you?

thanks


----------



## aus_trader (18 April 2020)

Knobby22 said:


> So do you think this is a typical 50% sucker rally Austrader? I think you are one of the good thinkers.
> 
> I am usually pretty good at this stuff but it really is weird, funny money flowing all over the US with the President fighting the States.  I mean the US Treasury is buying junk bonds!
> 
> ...




Thanks Knobby, unless the big4 banks also join the rally, it is unlikely to run to the pre-Covid19 levels any time any time soon. However it is also a reflection of markets working itself out to arrive at true price discovery. The fact that Australian government didn't jump on the Virgin Airline bailout shows that they are not going to bail out every private or public company that fails. So there is some integrity in the way ASX works.

You are spot on about the FED and the US markets. The FED move towards buying everything under the sun is likely to seriously distort the markets, which is probably what is happening now. The freshly printed is going to prop up the major Index stocks like FAANG's through the big investment banks rather than ending up with consumers and unemployed citizens in dire straits. If they are going to prop up and bail out all the zombie companies that a free market would make extinct through natural selection, I lose all faith in that system. Leadership and competition will come to a halt and companies will run so inefficiently like all the government organizations knowing they can do all the wrong things in the world and whenever there is to be any consequences all they have to do is to put their hand up to get bailed out from the FED. It'll be like begging of a nation at the highest level not the poor at street level. Could bring the end of FIAT a lot sooner for a complete system re-boot. It's the only way when the core is corrupted.


----------



## aus_trader (18 April 2020)

OmegaTrader said:


> What is the take away from this?
> Does this breadth keep increasing?
> or do the leaders/broader market revert?
> 
> ...



Some thoughts come to mind with regards to the markets led by the big cap stocks. Firstly it's the big money managers, Fundies and investment banks that are likely buying and it's either because they sold early in the panic and buying back (or short covering) or they are buying the most liquid stocks that can be let go easily if there is another panic.


----------



## sptrawler (18 April 2020)

Westpac 4th May and Nab 7th May, will give some indication of where all this is going.
Just my opinion.
Im still only buying shares, in companies that arent relying on consumer spending.
Just my


----------



## investtrader (19 April 2020)

My take is what is happening in the US is that the largest stocks are better placed to ride out the type of economic shock that is happening eg MSFT, AMZN. The market is saying that these types of companies and going to recover pretty quickly. The Russell 2000 however is getting hammered for the opposite reason.


----------



## MrChow (19 April 2020)

Nasdaq is higher than December.


----------



## aus_trader (19 April 2020)

investtrader said:


> My take is what is happening in the US is that the largest stocks are better placed to ride out the type of economic shock that is happening eg MSFT, AMZN. The market is saying that these types of companies and going to recover pretty quickly. The Russell 2000 however is getting hammered for the opposite reason.



This is what I observed also.

Also there is quite a possibility that a lot of smaller cash-strapped companies will go under unfortunately. Probably the reason why there is very little buying in these companies from the facts of my own research despite the possible talk of FED bail outs for all.

Not sure what'll happen but I'll be happy to watch from the sidelines. I think it'll be safe to watch if the talk of widespread bailouts materialises or just bluff. If it isn't bluff, then investing would have to be done with a new way of thinking. Things could get really messy and ugly if there is a FIAT reset or emerge of a replacement instrument. It's something I actually ignored up to this point (even after those bank bailouts in GFC) as an outlier that wouldn't happen in my lifetime 

Will still have a nibble at ASX stocks selectively.


Knobby22 said:


> So glad to be Australian.



Amen


----------



## aus_trader (19 April 2020)

MrChow said:


> Nasdaq is higher than December.



Yep, Tech stocks (especially the mammoth ones) are leading the way...


----------



## sptrawler (20 April 2020)

aus_trader said:


> Things could get really messy and ugly if there is a FIAT reset or emerge of a replacement instrument. It's something I actually ignored up to this point (even after those bank bailouts in GFC) as an outlier that wouldn't happen in my lifetime
> 
> Will still have a nibble at ASX stocks selectively.
> 
> Amen



We have been talking about how all the stimulus from the GFC would be unwound, the massive asset price increases has caused a huge problem and had to be addressed sooner or later. Whether this incident presents the opportunity, time will tell, but if it doesn't cause the FIAT reset or replacement instrument it will certainly lay down the roots IMO.
We just need to notice the indicators, as this will be the start of a new growth phase IMO.
Changing the way we do business, opens the door for some sectors and closes the door on others, being able to see which is which is the trick.
Just my opinion.


----------



## Logique (20 April 2020)

aus_trader said:


> Yep, Tech stocks (especially the mammoth ones) are leading the way...
> View attachment 102456



Yes the W-shape/U-shape crowd need to have  a look at the Nasdaq action


----------



## Garpal Gumnut (20 April 2020)

We begin the fall, the long often slow grinding, sometimes rapid with minor corrections fall, before the calm. 

gg


----------



## basilio (20 April 2020)

Check out this analysis on the current economic situation in Australia and consider how our economy is being affected by COVID 19

*China’s GDP collapse caps off a week of bad Australian economic news*
By
Robin Bromby
-
April 18, 2020
China’s economy contracted 6.8% in the March quarter.
FacebookTwitterLinkedInEmailPrint
China has been reporting quarterly GDP figures for 28 years and there has never been a contraction — until the March quarter just ended and the contraction came in at 6.8% on Friday.

That sent a shock wave around the world. It ended a surge of Chinese economic growth that dates back to 1976.

It will be an especially hard jolt to Australia with its heavy reliance on China as an export market.

Even before the Chinese data was released on Friday, Australian Prime Minister Scott Morrison earlier in the day was warning Australians that the economic impact of the COVID-19 virus will hit this economy “like a truck”.
https://smallcaps.com.au/china-gdp-collapse-bad-australian-economic-news/


----------



## aus_trader (20 April 2020)

sptrawler said:


> We have been talking about how all the stimulus from the GFC would be unwound, the massive asset price increases has caused a huge problem and had to be addressed sooner or later. Whether this incident presents the opportunity, time will tell, but if it doesn't cause the FIAT reset or replacement instrument it will certainly lay down the roots IMO.
> We just need to notice the indicators, as this will be the start of a new growth phase IMO.
> Changing the way we do business, opens the door for some sectors and closes the door on others, being able to see which is which is the trick.
> Just my opinion.




Spot on sptrawler, opportunity has presented itself to flush the system of mal-investments and let nature take it's course on poorly run zombie companies that are not productive. That way there is going to be a new economy that'll adapt to the current environment and therefore thrive and grow. 

This wouldn't happen when tax payer money (current and many generations into the future) end up paying for bailing out companies that have been run poorly. It's not happening in our nation yet, but this is something we all need to be aware of, because we have a habit of following others and fall into complacency. This is a time to lead not follow.


----------



## aus_trader (20 April 2020)

basilio said:


> Check out this analysis on the current economic situation in Australia and consider how our economy is being affected by COVID 19
> 
> *China’s GDP collapse caps off a week of bad Australian economic news*
> By
> ...




With figures like that, we have much less reasons to be optimistic about.

There are reports that point to high Iron Ore price that will save us. I am not so sure if Iron Ore will stay high if China is contracting...


----------



## InsvestoBoy (20 April 2020)

aus_trader said:


> With figures like that, we have much less reasons to be optimistic about.
> 
> There are reports that point to high Iron Ore price that will save us. I am not so sure if Iron Ore will stay high if China is contracting...




I doubt it would "save" us, given mining (excl oil/gas) only contributes 6% to GDP and that contribution includes coal, gold, copper, etc not just iron.

That said, China contracting => AUD down => Iron ore priced in AUD up, or at least flat, is possible.


----------



## aus_trader (20 April 2020)

In case other members don't have a clue of what I was on about earlier, a recent article has been published that explains exactly what I was talking about:

https://www.theage.com.au/business/...-in-a-world-without-risk-20200420-p54le7.html


----------



## sptrawler (20 April 2020)

aus_trader said:


> With figures like that, we have much less reasons to be optimistic about.
> 
> There are reports that point to high Iron Ore price that will save us. I am not so sure if Iron Ore will stay high if China is contracting...



From a personal perspective, I'm struggling to work out where the demand for iron ore is going to come from, post the virus. My gut feeling is that there will be a lot of surplus capacity in the commercial property space, especially as a lot of firms will have slimmed down and others adapted to working on line.
The same will probably apply to retail, those who survive online, will probably vacate a lot of their lease exposure.
It will take a long time if ever, for people to re adjust back to the lifestyle before, maybe consumption wont return to the previous level for some time.
I'm wondering if the push to electrification isn't going to increase markedly, the car industry has been in the doldrums for a couple of years, it seems like a good time to start a concerted effort to encourage the change in some way. How that encouragement manifests will be interesting to see.
I guess it is just hard to see where the growth is going to come from ATM.


----------



## MrChow (21 April 2020)

I see May/June as a key period as the world will be looking to Australia and NZ to see what a Winter wave looks like.  If it's more severe than the current it's going to scare global markets for 6 months.


----------



## aus_trader (21 April 2020)

MrChow said:


> I see May/June as a key period as the world will be looking to Australia and NZ to see what a Winter wave looks like.  If it's more severe than the current it's going to scare global markets for 6 months.



Yes, we have to monitor the numbers going into peak Flu season...


----------



## IFocus (21 April 2020)

sptrawler said:


> From a personal perspective, I'm struggling to work out where the demand for iron ore is going to come from,




My new Stratco shed thats coming will drive demand


----------



## jbocker (21 April 2020)

MrChow said:


> I see May/June as a key period as the world will be looking to Australia and NZ to see what a Winter wave looks like.  If it's more severe than the current it's going to scare global markets for 6 months.



I don't think they will notice, probably think we don't have a 'real' winter. If they do watch us and we keep up our good work and keep the numbers to a minimum, it may lead them into making false assumptions.


----------



## sptrawler (21 April 2020)

sptrawler said:


> From a personal perspective, I'm struggling to work out where the demand for iron ore is going to come from, post the virus.



Well it looks as though BHP is thinking along the same lines.

https://www.smh.com.au/business/com...clouds-commodity-outlook-20200420-p54lcs.html


----------



## finicky (21 April 2020)

Anyone else getting a creepy uneasy feeling today? I don't like how my 'portfolio' is behaving. I checked out the ASX200 (XJO) chart then resorted to the VAS chart for volume information which only bemused me more because volume looks low and downtrending recently - weakening rally? VAS being an ASX200 reflective etf from Vanguard. I'm in the camp of a 3 wave down bear market, not a V recovery, so I've been dreading signs of a sputtering rally. The XJO chart suggests a break of any uptrending support line for the rally that you might draw - bearish rising wedgie? DJIA futures negative after a down night yesterday, gnash gnash.


----------



## wayneL (21 April 2020)

IFocus said:


> My new Stratco shed thats coming will drive demand



I'm handmaking my shoes from Australian or English (the profile steelnot made here), rather than Chinese readymades, so doing my bit.


----------



## sptrawler (21 April 2020)

wayneL said:


> I'm handmaking my shoes from Australian or English (the profile steelnot made here), rather than Chinese readymades, so doing my bit.



I hope your embossing your initials and made in Brisbane, they will probably become collectibles.
In a 1000 years time they will say, things were that tough in 2020 we had to start using horses again and even had to make our own shoes.


----------



## wayneL (21 April 2020)

sptrawler said:


> I hope your embossing your initials and made in Brisbane, they will probably become collectibles.
> In a 1000 years time they will say, things were that tough in 2020 we had to start using horses again and even had to make our own shoes.




I stamp them if they're good enough, but if they're crap I don't want anyone to know they are mine


----------



## Garpal Gumnut (21 April 2020)

wayneL said:


> I'm handmaking my shoes from Australian or English (the profile steelnot made here), rather than Chinese readymades, so doing my bit.




Good to know @wayneL . I usually get mine sent over from Crockett and Jones or Barker in London. 

If you ramp your operation up it might save me a journey to London every three years for a re-measuring. By the way, Barker have a sale on atm with many brands under $1000. A steal. 

I hate going through LHR. Give me AMS any old day.

gg


----------



## Garpal Gumnut (21 April 2020)

The market continues it's slow inevitable march down.

gg


----------



## basilio (21 April 2020)

I think the economic reality of what is happening around the world is going to start impinging on the nominal stock market values of current companies and whole industries.

For example I think the oil industry could be seeing a terminal turning point  as renewable energy projects gather pace and in particular electrification of transport quickens.
The travel and tourist industry ? Wouldn't be holding my breath on airlines and cruise ships returning in a big way. That then knocks out many "tourist traps".

Overall I also wonder how quickly people will willingly go back to mindless consumerism?  New products just for the sake of it ?

Last couple of days have seen big drops on ASX.


----------



## flightcrank (21 April 2020)

finicky said:


> I'm in the camp of a 3 wave down bear market, not a V recovery, so I've been dreading signs of a sputtering rally.




it was never gonna be a V shape. Looks like we're at the top of a dead cat bounce.


----------



## MrChow (21 April 2020)

https://www.cnbc.com/2020/04/20/cor...p-to-55-times-bigger-than-reported-cases.html

If the mortality rate is 55 times less than reported it's on a par with the regular flu.

The strategy then is to just keep the sick and at risk at home and let everyone go on with their lives which would be hugely bullish news for the medium term.


----------



## aus_trader (22 April 2020)

basilio said:


> For example I think the oil industry could be seeing a terminal turning point as renewable energy projects gather pace and in particular electrification of transport quickens.



I think this is a short to medium term decimation of oil prices. Oil will still play an important part in the economy once economic activity resumes at some stage in the future.

It'll probably be a slow recovery though. For example it'll take a long time for cruise ships and airlines to come back online. They use tanks of fuel that is produced from crude oil. There is no alternative to oil for these fuel guzzlers however. Haven't come across any running on a re-chargeable battery yet.


----------



## Smurf1976 (22 April 2020)

aus_trader said:


> I think this is a short to medium term decimation of oil prices. Oil will still play an important part in the economy once economic activity resumes at some stage in the future.




One question which comes to mind is the extent that any hedge funds or other institutional investors have "blown up" with the extreme volatility in oil prices?

Given that we've seen moves in a matter of minutes which under normal circumstances would take years, it's at least possible that someone somewhere has lost serious $ with it all and is now financially dead or close enough to it. Someone as in "someone who matters".

That's pure speculation on my part but it would seem at least plausible.


----------



## peter2 (22 April 2020)

The tide has definitely gone out in the oil market and we'll soon see who's been swimming without bathers.


----------



## basilio (22 April 2020)

Smurf1976 said:


> One question which comes to mind is the extent that any hedge funds or other institutional investors have "blown up" with the extreme volatility in oil prices?
> 
> Given that we've seen moves in a matter of minutes which under normal circumstances would take years, it's at least possible that someone somewhere has lost serious $ with it all and is now financially dead or close enough to it. Someone as in "someone who matters".
> 
> That's pure speculation on my part but it would seem at least plausible.




Certainly on the cards isn't it ?  Fact is most of the "investments" are sophisticated gambling games. When someone/something upends the tables the players can be seriously hurt - as can the people who are backing them.


----------



## waterbottle (22 April 2020)

I'm out.
Given what's happened to oil, I've decided to tighten my stops and I've been pushed out of this market for now.
Earnings + potential for contagion is too much risk for me


----------



## sptrawler (22 April 2020)

Smurf1976 said:


> One question which comes to mind is the extent that any hedge funds or other institutional investors have "blown up" with the extreme volatility in oil prices?
> 
> Given that we've seen moves in a matter of minutes which under normal circumstances would take years, it's at least possible that someone somewhere has lost serious $ with it all and is now financially dead or close enough to it. Someone as in "someone who matters".
> 
> That's pure speculation on my part but it would seem at least plausible.



It is an interesting situation, I read Santos had 30% of 2020's oil production hedged at $43, that leaves 70% not hedged.
So if this is protracted, it will be haircuts all round.

https://www.asx.com.au/asxpdf/20200403/pdf/44gp4gp7kytzgj.pdf


----------



## moXJO (22 April 2020)

IFocus said:


> My new Stratco shed thats coming will drive demand



Those bastard didn't charge you an arm and a leg.


----------



## IFocus (22 April 2020)

moXJO said:


> Those bastard didn't charge you an arm and a leg.




I didn't feel completely raped after paying 

The spec is OK for what it is plus they changed a few things for me.

It gets delivered 1st of May guess I'll find out putting it up.


----------



## sptrawler (22 April 2020)

IFocus said:


> I didn't feel completely raped after paying
> 
> The spec is OK for what it is plus they changed a few things for me.
> 
> It gets delivered 1st of May guess I'll find out putting it up.



A tip, that you may already have covered, if it doesn't include insulation under the roof tin. Grab some like insulbreak or similar and get the guys to chuck it under the roof sheets, it makes it bearable in summer.
Just a thought, but you probably have already covered it.


----------



## InsvestoBoy (23 April 2020)

Market thought:

The first leg down was sharp and deep.

The reflexive rally since then has reflected relative strength of different sectors and countries.

Everyone is speculating about V bottom vs re-test of the lows or whatever. People are thinking the next leg will be the same as the first leg.

My thoughts are that we will probably go lower, but it is going to be an ugly/drawn out/choppy route.

The most common market reaction after big vol spikes across all asset classes is extended chop, even within a trending environment.

Those positioned for a repeat of the first leg might eventually be right in price, but not in time and space.


----------



## sptrawler (23 April 2020)

InsvestoBoy said:


> Market thought:
> 
> The first leg down was sharp and deep.
> 
> ...



Good summation IB, I can't help but feel the underlying market fallout, isn't going to be as bad as expected.
Discretionary spending, hospitality, tourism and education will be hammered, but the productive side of the economy still seems to be ticking over, I feel the Government spend has kept the consumer staples ticking over which flows through into the agricultural sector and mining is still bubbling along.
So as you say, I also think if there is a fall or rise, it will be a long protracted event.
There will be good news mixed with the bad.


----------



## wayneL (23 April 2020)

sptrawler said:


> Good summation IB, I can't help but feel the underlying market fallout, isn't going to be as bad as expected.
> Discretionary spending, hospitality, tourism and education will be hammered, but the productive side of the economy still seems to be ticking over, I feel the Government spend has kept the consumer staples ticking over which flows through into the agricultural sector and mining is still bubbling along.
> So as you say, I also think if there is a fall or rise, it will be a long protracted event.
> There will be good news mixed with the bad.



...and central banks are buying everything in sight


----------



## InsvestoBoy (23 April 2020)

wayneL said:


> ...and central banks are buying everything in sight




Buying junk bonds or whatever *in the secondary markets* using bank reserves is completely ineffective and will have no effect on the real economy and if it has any effect on asset market it is only via a trick of perception on real money accounts who are foolish enough to believe the Fed has power, not by virtue of any technical actions they took.


----------



## wayneL (23 April 2020)

InsvestoBoy said:


> Buying junk bonds or whatever *in the secondary markets* using bank reserves is completely ineffective and will have no effect on the real economy and if it has any effect on asset market it is only via a trick of perception on real money accounts who are foolish enough to believe the Fed has power, not by virtue of any technical actions they took.



Yeah but that's not all they're buying


----------



## InsvestoBoy (23 April 2020)

wayneL said:


> Yeah but that's not all they're buying




Bank reserves are inert.


----------



## wayneL (23 April 2020)

InsvestoBoy said:


> Bank reserves are inert.



So are the chemical properties of Gold.

The alphabet soup of Fed activities (both disclosed and undisclosed) are distortionary(sic) for price discovery however.


----------



## Smurf1976 (23 April 2020)

An issue I see is the contrast between Australia and the US with the background situation of COVID-19 and responses to it.

Given this is an Australian site and most of us are investing at least partially on the ASX there's a natural tendency to focus on the Australian situation. Looking at the US though, well they're on track to hit 1 million COVID-19 cases about Tuesday - Wednesday next week Australian time. They've got a shockingly high death rate and overall a situation that's drastically worse than that in Australia at the present time.

Whilst Australia might be considering re-opening for business a few weeks from now, it's going to be considerably longer in the US at least unless they're willing to end up with a huge death toll. It's hard to say exactly what the time lag is, but Australia achieved a leveling off in active cases 3 weeks ago and that has since been followed by decline. The US hasn't achieved that leveling off yet, so they're at least 3 weeks behind where we are and probably longer. It's not back to business as usual in a hurry.

So far as the market is concerned, well my concern is that no matter what factors either technical or fundamental might support the ASX going up or sideways, we could well see it dragged down by influences from the US in particular. Some will argue that there's not really that much correlation between the two but I'll pose a question. If the S&P 500 re-tests the lows or goes to new lows, then does anyone seriously think the ASX won't at least see a decent slump?


----------



## aus_trader (23 April 2020)

wayneL said:


> So are the chemical properties of Gold.
> 
> The alphabet soup of Fed activities (both disclosed and undisclosed) are distortionary(sic) for price discovery however.



As you said more probably more undisclosed ones, but below is some of the disclosed


----------



## aus_trader (23 April 2020)

peter2 said:


> The tide has definitely gone out in the oil market and we'll soon see who's been swimming without bathers.



OK, my turn to guess. Let's see...  … will it be the US shale oil producers !


----------



## CBerg (23 April 2020)

aus_trader said:


> As you said more probably more undisclosed ones, but below is some of the disclosed
> 
> View attachment 102566



It would be funny to see them start a program abbreviated as STIMMY


----------



## aus_trader (23 April 2020)

CBerg said:


> It would be funny to see them start a program abbreviated as STIMMY



Well, you never know in time. For now, get your head around these...



It just goes on and on... Enjoy !


----------



## InsvestoBoy (29 April 2020)

peter2 said:


> My comments pertained to the equity markets in general.  Today's price action in the ASX was very bullish. This may not be apparent in the banks and the top 20 but buyers were happy to pile into riskier equities (XSO and XEC). Did we see a panic selloff just before the close today, knowing that it's a extra long weekend for the ASX?  FOMO is alive and well in the ASX today.




Still feeling this vibe @peter2 ?


----------



## peter2 (29 April 2020)

That comment seems so long ago. Gold and oil have both gone up and down since then. The XAO still struggles to go up and the bounce off the low is only 38%. There's been plenty of opportunities to trade stocks in the bounce off the lows but that seems to have petered out. Buying now seems like chasing. I've gone to cash anticipating another dip to the low but there's no panic selling atm. Talk about easing restrictions and restarting the economy has strengthened the demand. Nobody has a clue how the shutdown has impacted most companies until they report. Ascertaining value must be difficult without information. I ride the coat tails of the large insto investors and I'm still waiting for them to show up. 

If the XAO closes above 5600 I have to start buying, but I'll do it cautiously and sparingly. I'd love to see a dip to the low again soon. In the meanwhile I'm buying into gold rallies, shorting oil rallies and day trading US equities.


----------



## aus_trader (29 April 2020)

I have also been very much on the cautious side and not having the confidence to participate, especially with the big Banks not participating in the rally. There is signs they may join in, based on price rise today:












My thinking was, without broader market participation, you can get caught up in some of the growth speculation stocks that are bouncing back. If history is any guide, they will usually reverse the moment I catch them after chasing the fast rallies 

Anyway, today I have decided to dip the toe in, very selectively though because I think some sectors may be too risky to venture into even now.

So I bought Beach Energy Ltd (*BPT*) today which is a really well run stock in the Energy sector, been following this stock for years. Beach has cash to withstand the Oil crash and no debt as well as low production costs. Price has crashed along with all the other risky Energy stocks in the sector giving me a chance to buy around 50% discount to the Jan peak. Will update purchase details in Speculative Stock Portfolio later in the evening...


----------



## Skate (29 April 2020)

aus_trader said:


> So I bought Beach Energy Ltd (*BPT*) today which is a really well run stock in the Energy sector, been following this stock for years




@aus_trader "The Ducati Blue Bar Strategy" chart confirms "dipping your toe in" at this time is warranted as a buy signal has been generated today. 




"The Ducati Blue Bar Strategy" has the uncanny ability in picking the move. Will this move be successful, only time will tell. 

Skate.


----------



## aus_trader (29 April 2020)

Skate said:


> @aus_trader "The Ducati Blue Bar Strategy" chart confirms "dipping your toe in" at this time is warranted as a buy signal has been generated today.
> 
> View attachment 103056
> 
> ...



Excellent Skate, always like getting some technical support to back a buying decision.

This stock has fallen far more than what I expected, dragged down by the broader market sell down as well as ETF sell down. BPT is in the ASX top 200, so any of those local Index ETF's would have it as one of it's constituents.

I also bought a finger-licking stock close to the market close .  Will detail that one as well as BPT later in the evening in the spec portfolio thread.


----------



## MrChow (30 April 2020)

S&P500 looks to be pushing 3000 to end April.

Seems amazing they're within 13% of their all-time high.


----------



## InsvestoBoy (30 April 2020)

wayneL said:


> Yeah but that's not all they're buying






aus_trader said:


> Well, you never know in time. For now, get your head around these...
> View attachment 102578
> 
> 
> ...




Do suggest @wayneL and @OmegaTrader and anyone else who thinks the Fed or other CBs are printing  or the alphabet soup programs they are undertaking means anything, or that markets are rallying because of technical action from the Fed, takes 20 mins out of their day to listen to the latest MacroVoices All Stars with Jeffrey Snider for a quick primer on why that isn't the case!

For those with time, I do suggest going through the back catalogue and listening to every Jeff Snider appearance on the show, especially including the old Eurodollar University series.

I make his blog at Alhambra Partners where he is Chief Economist https://alhambrapartners.com/commentaryanalysis/ part of my daily schedule.


----------



## Bazzi (30 April 2020)

peter2 said:


> If the XAO closes above 5600 I have to start buying, but I'll do it cautiously and sparingly. I'd love to see a dip to the low again soon. In the meanwhile I'm buying into gold rallies, shorting oil rallies and day trading US equities.




Hi @peter2 We are getting close to 5600 .... I look forward to know which of the shares are under your radar to re-enter?


----------



## aus_trader (30 April 2020)

InsvestoBoy said:


> Do suggest @wayneL and @OmegaTrader and anyone else who thinks the Fed or other CBs are printing  or the alphabet soup programs they are undertaking means anything, or that markets are rallying because of technical action from the Fed, takes 20 mins out of their day to listen to the latest MacroVoices All Stars with Jeffrey Snider for a quick primer on why that isn't the case!
> 
> For those with time, I do suggest going through the back catalogue and listening to every Jeff Snider appearance on the show, especially including the old Eurodollar University series.
> 
> I make his blog at Alhambra Partners where he is Chief Economist https://alhambrapartners.com/commentaryanalysis/ part of my daily schedule.




I love this cartoon from your Blog


----------



## wayneL (30 April 2020)

InsvestoBoy said:


> Do suggest @wayneL and @OmegaTrader and anyone else who thinks the Fed or other CBs are printing  or the alphabet soup programs they are undertaking means anything, or that markets are rallying because of technical action from the Fed, takes 20 mins out of their day to listen to the latest MacroVoices All Stars with Jeffrey Snider for a quick primer on why that isn't the case!
> 
> For those with time, I do suggest going through the back catalogue and listening to every Jeff Snider appearance on the show, especially including the old Eurodollar University series.
> 
> I make his blog at Alhambra Partners where he is Chief Economist https://alhambrapartners.com/commentaryanalysis/ part of my daily schedule.



I did actually see that video, very interesting, and very credible, but a couple of things didn't really ring true to me, even if most of it made perfect sense. Contradicts many other voices too.

Have to admit it's all beyond my pay grade really.


----------



## InsvestoBoy (30 April 2020)

wayneL said:


> I did actually see that video, very interesting, and very credible, but a couple of things didn't really ring true to me, even if most of it made perfect sense. Contradicts many other voices too.
> 
> Have to admit it's all beyond my pay grade really.




It is just a 20 minute "update" segment, he goes into extreme in depth on the blog, previous full length interviews and in Eurodollar University series .


----------



## ducati916 (1 May 2020)

InsvestoBoy said:


> Do suggest @wayneL and @OmegaTrader and anyone else who thinks the Fed or other CBs are printing  or the alphabet soup programs they are undertaking means anything, or that markets are rallying because of technical action from the Fed, takes 20 mins out of their day to listen to the latest MacroVoices All Stars with Jeffrey Snider for a quick primer on why that isn't the case!




It would seem that you support (advocate) this chap's position. Now I have only quickly skimmed 4 of the articles re.: Bond Kings etc. I wasn't impressed. The reason that I wasn't impressed is that he is critical of the 'Bond Kings', which is always easy if they are unable to respond and light on explanation. It is possible as I had to read it quickly that I missed the central point.

This is a topic that interests me. If you are willing to summarise the argument, I will respond (Federal Reserve and FOMC actions/alphabet soups/Repo.) I will re-read them later when I have additional time.

jog on
duc


----------



## Garpal Gumnut (1 May 2020)

MrChow said:


> S&P500 looks to be pushing 3000 to end April.
> 
> Seems amazing they're within 13% of their all-time high.



And then Trump had his stroke.

Unknown, unknowns await.

gg


----------



## wayneL (1 May 2020)

Garpal Gumnut said:


> And then Trump had his stroke.
> 
> Unknown, unknowns await.
> 
> gg



Perhaps unknown unknowns of known knowns?

The playbook is the same, but a crapper load more dangerous now.


----------



## finicky (6 May 2020)

Grok this for a super contrarian visionary view of the next few months through the next few decades.

Melt up from here - gold over $2,000 USD, S&P500 new highs over 4000 by Labor Day (Sept 7 2020), Oil $40-45 

Then second leg down of the 'deflationary bust'. Rapid. Gold cut in half, S&P500 to lose 80% from the top. Oil 10 bucks again. Won't take long, rapid like the first leg. 

Recovery off the bottom - Gold to reach $10,000+ USD, Silver $300, Oil $300
Commodities boom during industrial driven hyper-inflationary recovery phase fuelled by massive money creation. Gold stocks like dotcom boom of the 90's. All before 2030.

Fed balance sheet 20-30 trillion. Boom rolls over by 2027-2030. Interest rates way up like in 1981 (I was getting like 18% on a bank term deposit in early 1980's).

Then it all falls apart for the final time by 2030, all the cracks wrenched apart with the hyperinflation and massive debt build-up, Central banks have shot their bolt - because more money creation, more intolerable inflation.

Then utter gloom - deflationary depression lasting couple of decades starting late 2020's - 2030.

https://palisaderadio.com/david-hunter-gold-and-silver-miners-to-be-the-next-dot-com-bubble/


----------



## aus_trader (6 May 2020)

Very interesting finicky. So much volatility to be expected. Not sure if that scenario will play out but will have to be prepared either way I guess.


----------



## finicky (6 May 2020)

He's changed my mind, I'm going to slavishly follow his roadmap unless I find more persuasive reasoning. So going by that we won't see the March lows again on our market until we first see new all time highs - that's making the easy assumption that our ASX follows the S&P500. So that vindicates whoever said on this thread a V shaped reversal due to the scale of intervention - someone did (waterbottle?).

Our gold miners are going to take off with gold going to over  $2,000 USD by early September, so I'll be trimming goldies then in anticipation of the second part of the crash. I'll also be trimming my general stocks then so I'll have something to spend when the second crash takes the market down 80%. Might even put something into BBOZ then. Meanwhile I might even buy a few stocks.
By the way, David Hunter interacts with people on twitter @DaveHcontrarian


----------



## Smurf1976 (7 May 2020)

finicky said:


> I'm going to slavishly follow his roadmap



The argument made does seem to be a considered one, it's not over the top "end of the world" stuff and so on but a reasoned argument.

That doesn't mean he's right, but it's worth listening to.


----------



## Garpal Gumnut (7 May 2020)

wayneL said:


> Perhaps unknown unknowns of known knowns?
> 
> The playbook is the same, but a crapper load more dangerous now.



It is very dangerous now @wayneL .

The marks are being set up to maintain liquidity. Then the mother of all lows. 

gg


----------



## MrChow (9 May 2020)

I had previously wondered why China and Korea's numbers couldn't be replicated around the world but it looks like now western countries are adopting their mass testing and tracing strategies for later in the year when secondary waves may occur.   I think that level of supression will limit the down side and see the March lows as the lows of this cycle globally.  Australia has a bit of an extra risk with our Winter coming sooner than the U.S and Europe though.

There will be industries that take longer to recover.   Banks have effectively a 6 month delay because of distressed loans being put off for this period of government intervention.   International tourism and education may be the last businesses to recover as they require a full coordinated recovery.


----------



## basilio (9 May 2020)

I'm struggling to see where an economic recovery is going to come from.

Each and every country around the world is facing a severe to catastrophic economic contraction. As well as that the march of illness and death across businesses is inhibiting any sustained economic recovery.
There is no certainty that any country will be able to successfuly reopen for business without risking more dramatic illnesses and death numbers

We can  be 100% certain that international tourism, air travel and therefore international business travel will be slashed. There are serious risks to supply lines for products which will be wild cards.

The US administration is  ramping  up  anti Chinese activity which can only undermine trade and economic activity.

We havn't even started to see the  current effects  of the economic contraction on financial institutions. We already have sovereign debt defaults and these can only  expand as countries economies crack. 

And yet commentators are talking about recoveries?


----------



## SirRumpole (9 May 2020)

basilio said:


> I'm struggling to see where an economic recovery is going to come from.
> 
> Each and every country around the world is facing a severe to catastrophic economic contraction. As well as that the march of illness and death across businesses is inhibiting any sustained economic recovery.
> There is no certainty that any country will be able to successfuly reopen for business without risking more dramatic illnesses and death numbers
> ...




It won't happen overnight , but it will happen. 

People will still need our agricultural products and our minerals, but tourism and education will be smashed for a while, unless uni courses can go online and more Australians travel domestically.

I think we will change the way we live, but humans are pretty adaptable and we will find other ways of doing things.

Maybe governments will have to earn their keep instead of relying on the panacea of immigration, a Ponzi scheme if ever there was one, designed to let real estate agents and property investors get fat at the expense of ordinary home buyers.


----------



## basilio (9 May 2020)

SirRumpole said:


> It won't happen overnight , but it will happen.
> 
> People will still need our agricultural products and our minerals, but tourism and education will be smashed for a while, unless uni courses can go online and more Australians travel domestically.
> 
> ...




What I'm said Rumpy is that we havn't even *started* to see the  consequences of this crisis. The  slow motion crash is still happening. The  extent. of the damage is still uncertain. And we already have passengers wanting to  open their safety belts..


----------



## noirua (9 May 2020)

basilio said:


> I'm struggling to see where an economic recovery is going to come from.
> 
> Each and every country around the world is facing a severe to catastrophic economic contraction. As well as that the march of illness and death across businesses is inhibiting any sustained economic recovery.
> There is no certainty that any country will be able to successfuly reopen for business without risking more dramatic illnesses and death numbers
> ...



The world downturn may well last as long as the the 1929 depression. This only really bottomed in 1932 and then a gradual recovery before being plunged into war.
This situation isn't any different so it will probably be 2023 before a recovery really starts. France refused to pay its debt in 1930-32 and the sum has never been repaid. https://en.wikipedia.org/wiki/Mellon–Berenger_Agreement


----------



## Dona Ferentes (9 May 2020)

Garpal Gumnut said:


> It is very dangerous now
> 
> The marks are being set up to maintain liquidity. Then the mother of all lows.



every Power That Is, is treating this as a liquidity crisis.

And when it morphs into a solvency crisis?

In Aust, in a better position than many, "Conventional policy, the short-term interest rate, was set at effective-zero in March by the RBA. Forward guidance assured financial markets that this would stay for the duration. Nothing more to do here. The March package had two more objectives. First, to encourage the banking sector to play a shock-absorber role by funding the cash-flow consequences of business hibernation and recession. Second, to ensure that the government could fund the huge deficit in prospect."
https://www.rba.gov.au/speeches/2020/sp-gov-2020-04-21.html

but that is a bit of wishful thinking. Sure we're in "accelerated opening up"; but
- behaviours are going to lead to a second wave. Too many people don't get 'physical distancing'.
- whole sectors are non-functioning and will for a long time
- the pinch time is Sept.

Let’s see how this works out over time. It would be unfortunate if the RBA extends its yield-curve management to the long end of the curve, as this commitment could be difficult to unwind when interest rates need to return to normality.

The message of the statement is that the RBA, in its March measures, has done all it can sensibly do to help bridge the downturn. The heavy lifting has to be done with fiscal policy. And that's Government, and I can't see them doing it.


----------



## finicky (12 May 2020)

Gold to $800-900 USD in 2020
Consistent with David Hunter's view. Kondriatev Winter references.


----------



## aus_trader (13 May 2020)

finicky said:


> Gold to $800-900 USD in 2020
> Consistent with David Hunter's view. Kondriatev Winter references.




Sometimes I wander if these views being spread around is for these guys to pick up Gold at a discount to the current price. They do believe much higher prices in the long term. So what's their short term agenda ? And how do they know it's going to more than halve to $800 in the short term, what crystal ball do they have ?

I think it's a perfect recipe to spook the Gold and Gold stock investors to let go of their positions, so these guys can pick them up on the cheap. Even I got spooked when I saw $800 Gold, but then I started thinking... what's in it for them


----------



## Smurf1976 (13 May 2020)

finicky said:


> Kondriatev Winter references



The only alarm bell that rings is that I'd forgotten the term after reading lots and lots about it.

In 2002.

A child born when I was reading that is now an adult. VHS tapes were still in widespread use back then as were CRT TV's and there was no such thing as an iPhone or YouTube. Music released back then is either now long forgotten or  considered as retro. And so on. An awful lot's happened in that time but anyone waiting for the Kondratiev Winter has likely given up waiting by now.

That's not shooting down your posting of it but sounding a warning about the concept. It may well be right but it has been claimed to be "imminent" for a very long time now......


----------



## qldfrog (13 May 2020)

In term of market gall my paper daily trading system cancelled all its 7  buys after the US market results.
So 7 buy yesterday at 9pm 0 this morning.How many traders or trader systems will be like mine today?


----------



## PZ99 (13 May 2020)

qldfrog said:


> In term of market gall my paper daily trading system cancelled all its 7  buys after the US market results.
> So 7 buy yesterday at 9pm 0 this morning.How many traders or trader systems will be like mine today?



Any sells ?


----------



## qldfrog (13 May 2020)

PZ99 said:


> Any sells ?



sells unchanged..had a few.
as i just paper trade it did not get too involved but for example MYR was paper buy Monday, and paper sold yesterday or Tuesday, initially a buy today which was discarded by DJ and VIX results last night.
Just wondering if we are getting into that second fall many expected


----------



## PZ99 (13 May 2020)

I have a use for days like this... I sold BOQ at 4.65 open and got them back for 4.60 - nothing to crow about but for me that's a 5c dividend for the day


----------



## basilio (13 May 2020)

I think the next three months in the US will be critical to where the economies, the US stock stock market and  the world economies end up.

Trump and the republicans have decided to open up the economy again.  All the evidence and medical advice is that the outbreak is not under control, there are insufficient tests available and the contact tracing capacities to track down sources of new outbreaks are minimal.

Professor Fauci has warned that in the event of fresh and extended outbreaks it may be impossible to control the epidemic. That would mean a majority  of people , 250m plus,  becoming infected at some stage

*It took two months for US deaths to go from 11 to 80,000*. With the push to reopen the economy in full swing  *and the virus now fully entrenched across all the US* what are are chances of  business staying operational? Translate that into earnings, confidence and the market.


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## Garpal Gumnut (13 May 2020)

basilio said:


> I think the next three months in the US will be critical to where the economies, the US stock stock market and  the world economies end up.
> 
> Trump and the republicans have decided to open up the economy again.  All the evidence and medical advice is that the outbreak is not under control, there are insufficient tests available and the contact tracing capacities to track down sources of new outbreaks are minimal.
> 
> ...



Thanks @basilio . 

I said somewhere, unsure if in this thread that with coronavirus if one trades daily, change to weekly, weekly to six monthly and six monthly to 1-2 yearly.

This is not the season for the "brave".

It ain't going away soon.

And we are far from the bottom for some stocks.

gg


----------



## Smurf1976 (13 May 2020)

Garpal Gumnut said:


> This is not the season for the "brave".
> 
> It ain't going away soon.
> 
> And we are far from the bottom for some stocks.




Looking at the S&P 500 as an example, it's currently at the same level it was at in October 2019 so 7 months ago.

Looking at the real economy however, well there's entire industries shut down and everything from local theatre performances through to the Olympic Games is cancelled. The current actual economy and the medium term (1 - 2 years) outlook are both vastly inferior to those of 7 months ago.

To the extent there's an argument for stocks to rise, the obvious one is inflation.


----------



## Garpal Gumnut (13 May 2020)

Smurf1976 said:


> Looking at the S&P 500 as an example, it's currently at the same level it was at in October 2019 so 7 months ago.
> 
> Looking at the real economy however, well there's entire industries shut down and everything from local theatre performances through to the Olympic Games is cancelled. The current actual economy and the medium term (1 - 2 years) outlook are both vastly inferior to those of 7 months ago.
> 
> To the extent there's an argument for stocks to rise, the obvious one is inflation.



I don't follow the S&P 500 or the USA economy in general. 

I don't understand their way of doing things in any sphere. 

All I know is that they are going to sh*t in a basket and I believe that the S&P 500 will go there too. 

I believe some ASX 200 stocks will survive but many will go ar*e up or get taken over so price movement will not be uniform 

Inflation may play a part but the extent to which that will occur will be determined by the virus, not by economists.

gg


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## aus_trader (14 May 2020)

Smurf1976 said:


> Looking at the S&P 500 as an example, it's currently at the same level it was at in October 2019 so 7 months ago.
> 
> Looking at the real economy however, well there's entire industries shut down and everything from local theatre performances through to the Olympic Games is cancelled. The current actual economy and the medium term (1 - 2 years) outlook are both vastly inferior to those of 7 months ago.
> 
> To the extent there's an argument for stocks to rise, the obvious one is inflation.




I like your thinking there *Smurf* and for someone who prefers simple any day over complex (like myself), what you said makes sense. But I don't think there is real inflation in the economy, in fact there is more likely to be deflation due to industry disruptions and shutdowns which has led to an uptick in unemployment.

The big Caps and tech stocks staging a price recovery I reckon, is driving the index.


----------



## qldfrog (14 May 2020)

With US down again today/tonight, we should see some real fall today.
What the hell was yesterday: from -1.4 to +0.3..in a starting trade bash with China and a world on its knees?
Actually i think the ASX rejoiced at the prospect of my state buying Virgin...Paluchet dream of becoming an air hostie becoming...what a world...
All this could be so funny if we as taxpayers and investors were not to pay the cost ultimately


----------



## Smurf1976 (14 May 2020)

qldfrog said:


> With US down again today/tonight, we should see some real fall today.



You could well be right, I'm somewhere in the middle, but the difficulty I'm having with the bearish case is that a significant decline from this point would be among the most anticipated bear markets ever which I take as a bullish signal.


----------



## qldfrog (14 May 2020)

Agreed on that planned fall..


----------



## Dona Ferentes (14 May 2020)

There was an article yesterday, syndicated widely, by an ' influencial columnist' about going to *cash*. I read it and went through it again; all I could see was the same old stuff, nothing new. 

Too late bud.


----------



## wayneL (14 May 2020)

Smurf1976 said:


> You could well be right, I'm somewhere in the middle, but the difficulty I'm having with the bearish case is that a significant decline from this point would be among the most anticipated bear markets ever which I take as a bullish signal.



I'm a fan of contrarian contrarianism. When there are many contrarians, the contrarian view is actually counter contrarian. Lots of new players are jumping into the market like madmen.

But, the current market is simply not a mechanism for true price discovery, so who the hell knows?


----------



## InsvestoBoy (14 May 2020)

Smurf1976 said:


> Looking at the S&P 500 as an example, it's currently at the same level it was at in October 2019 so 7 months ago.
> 
> Looking at the real economy however, well there's entire industries shut down and everything from local theatre performances through to the Olympic Games is cancelled. The current actual economy and the medium term (1 - 2 years) outlook are both vastly inferior to those of 7 months ago.




Yeah but you are reading the vagaries of market cap based weighting into this supposed disparity between index and economy.

Equal weighted SPX to market cap weighted SPX since Oct 2019



or market weighted Russell 2000 to market weighted SPX since Oct 2019






> To the extent there's an argument for stocks to rise, the obvious one is inflation.




In general, stocks don't do well in inflationary circumstances until after the first inflation shock has hit and even then they just tend to track inflation in nominal terms, not outperform in real terms.

That said, inflation might be an argument for stocks to rise on the ASX and emerging markets where the weights are heavily tilted to cyclicals, especially materials and financials. Won't be the same for the US.


----------



## InsvestoBoy (14 May 2020)

finicky said:


> Gold to $800-900 USD in 2020
> Consistent with David Hunter's view. Kondriatev Winter references.





uhhh his view is exactly opposite of David Hunters view? i.e. Davids view is that gold will explode up, then down? This guy is saying gold is about to ~halve and then explode upwards?

What's the point of posting trash like this? Do you really expect to make money in the markets following random Elliott Wave prognosticators on YouTube? Hoping people on here will be tell you "yeah, great call, let's all go short in our CFD accounts"?


----------



## InsvestoBoy (14 May 2020)

Dona Ferentes said:


> The message of the statement is that the RBA, in its March measures, has done all it can sensibly do to help bridge the downturn. The heavy lifting has to be done with fiscal policy. And that's Government, and I can't see them doing it.




That was even the message before this crisis, and the same one being spouted by the other inept CBs, "we have pulled all the levers we can pull, and even though we told you they would work lead to a glorious inflation of 2%, for some reason unrelated to our incompetence, we'll need you to go ahead and do some fiscal stimulus too please".

For some reason, people still listen to these goofballs at the RBA and other CBs who are just consistently wrong in their forecasts for growth and inflation and completely unable to influence either despite all their "quantitative" easing.


----------



## qldfrog (15 May 2020)

InsvestoBoy said:


> For some reason, people still listen to these goofballs at the RBA and other CBs who are just consistently wrong in their forecasts for growth and inflation and completely unable to influence either despite all their "quantitative" easing



Fully agree about growth ,inflation and forecasts but there is IMHO one reason we listen to them, they are the ones supporting the market with pe in the 20s and above..
Without them we would have seen a salutary in my view crash back to the real world years ago


----------



## aus_trader (15 May 2020)

InsvestoBoy said:


> Hoping people on here will be tell you "yeah, great call, let's all go short in our CFD accounts"?




Exactly. Would've turned out great today in that account !


----------



## aus_trader (15 May 2020)

qldfrog said:


> Fully agree about growth ,inflation and forecasts but there is IMHO one reason we listen to them, they are the ones supporting the market with pe in the 20s and above..
> Without them we would have seen a salutary in my view crash back to the real world years ago



Yes it's worked like a charm in inflating markets in the past.
But I think there is a chance that the real (underlying economy) filtering through as time goes by especially for US, so the Index is not something I look at with total trust.


----------



## InsvestoBoy (15 May 2020)

qldfrog said:


> Fully agree about growth ,inflation and forecasts but there is IMHO one reason we listen to them, they are the ones supporting the market with pe in the 20s and above..
> Without them we would have seen a salutary in my view crash back to the real world years ago




I completely disagree.


----------



## wayneL (15 May 2020)

InsvestoBoy said:


> I completely disagree.



I don't, between the monetists and neo-monetarists, Keynesians and neo-keynesians, resulting in the current frankenomics, we wouldn't be so malinvested, nor so unreasonably leveraged.

We are where we are sikeli because of the current economic theory and actions of Central Banks.

Additionally the next chapter of economic and political (un)reality, re proles will have to navigate, is precisely because of the actions of Central banks and attendant political policy.

Yes the world would be different than it is today in lots of other ways, but I would have been preferred to navigate that reality than this one, to be honest.


----------



## Smurf1976 (15 May 2020)

aus_trader said:


> Yes it's worked like a charm in inflating markets in the past.
> But I think there is a chance that the real (underlying economy) filtering through as time goes by especially for US, so the Index is not something I look at with total trust.




I see it as much like anything. Short to medium term just about anything can happen but in the long term fundamentals win.

If the amount of water taken out of the lake each year is more than the average inflow then eventually it does run dry. A flood might postpone it or a drought might bring it forward but if it's fundamentally unsustainable well then ultimately it comes to an end.

Same concept with most things. Timing is hard to predict but if it's not sustainable then ultimately it ends at some point, usually rather dramatically when some external factor brings about the final plunge.


----------



## qldfrog (15 May 2020)

InsvestoBoy said:


> I completely disagree.



I "like" as I appreciate healthy debate but still disagree


----------



## wayneL (15 May 2020)

qldfrog said:


> I "like" as I appreciate healthy debate but still disagree



It's great to view a really good debate from the sidelines, especially if both sides make really good points.

Who one thinks has won the debate would be a matter of opinion and bias, but it is still very educational.


----------



## Smurf1976 (15 May 2020)

wayneL said:


> It's great to view a really good debate from the sidelines, especially if both sides make really good points.



Agreed - it's always important to fully understand the opposing view.

That doesn't mean you have to agree with it, but it's important to understand what the argument is and the reasoning behind it.


----------



## sptrawler (15 May 2020)

wayneL said:


> I don't, between the monetists and neo-monetarists, Keynesians and neo-keynesians, resulting in the current frankenomics, we wouldn't be so malinvested, nor so unreasonably leveraged.
> 
> We are where we are sikeli because of the current economic theory and actions of Central Banks.
> 
> ...



I'm with you on the norm is being written as we speak.


----------



## aus_trader (15 May 2020)

I also like to see both sides of the argument and totally respect the slightly opposing view such as that of qldfrog's.

As to what my stance is: very cautious but not entirely on the sidelines. In other words, not buying the stocks across the board as I normally do, but taking very selective positions in stocks that I have done some research on and believe has the best possibility of doing well even in the current environment. In fact I have added a couple of Aussie Gold stocks to the Speculative Stock Portfolio today, as Gold has broken out of the recent consolidation to the upside.

Those two Gold stocks have been researched as well as I could and compared to some of the best asx listed Gold stocks that I keep in a watchlist. Most have shot to the moon and I am generally not a chaser of rocketing prices even in a raging bull market, as some of you already know. Some came close to ticking all the boxes like my favourite African Gold juniors like PRU and WAF which are in my watchlist, but decided to go with two great Aussie Gold juniors instead.


----------



## sptrawler (15 May 2020)

There are way too many disruptive indicators for me to be able to understand the underlying reasons, Australia has been vehemently opposed to quantative easing, yet all of a sudden embrace it, Labor I could put it down to they love throwing money around, but Libs I'm not so sure.
If it walks like a duck and quacks, it probably is a duck.
So what is the long game?


----------



## aus_trader (15 May 2020)

sptrawler said:


> There are way too many disruptive indicators for me to be able to understand the underlying reasons, Australia has been vehemently opposed to quantative easing, yet all of a sudden embrace it, Labor I could put it down to they love throwing money around, but Libs I'm not so sure.
> If it walks like a duck and quacks, it probably is a duck.
> So what is the long game?




Good question mate. I think these Govt subsidies are unsustainable for the long term...


https://www.afr.com/policy/economy/jobkeeper-costs-130k-per-job-20200515-p54t8y


----------



## sptrawler (15 May 2020)

Absolutely, so they are there for a reason and i bet non of us pick what it is.


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## Smurf1976 (15 May 2020)

aus_trader said:


> I think these Govt subsidies are unsustainable for the long term...



The article says there's 7.7 million either on Job Keeper or the dole.

That's over half the entire workforce and leaves less than a quarter of the population who's actively working and not receiving Job Keeper etc.

I can't see how that's sustainable beyond the short term.


----------



## aus_trader (15 May 2020)

Smurf1976 said:


> The article says there's 7.7 million either on Job Keeper or the dole.
> 
> That's over half the entire workforce and leaves less than a quarter of the population who's actively working and not receiving Job Keeper etc.
> 
> I can't see how that's sustainable beyond the short term.



Yes, I think they'll be wound back.

I also wonder the decision to relax restrictions are also due to the increasing and possibly unsustainable Govt debt being created due to these subsidies. In terms of the health risk, we are not out of the woods yet !


----------



## qldfrog (16 May 2020)

sptrawler said:


> There are way too many disruptive indicators for me to be able to understand the underlying reasons, Australia has been vehemently opposed to quantative easing, yet all of a sudden embrace it, Labor I could put it down to they love throwing money around, but Libs I'm not so sure.
> If it walks like a duck and quacks, it probably is a duck.
> So what is the long game?



I think democracies are socialistic in the long game.
You just distribute wealth from top 49pc to bottom 51 and get reelection.
Borrow budget deficit etc tax the 49pc to the hilt, you are still ok
Until full collapse latin America style with a revolution to reset the clock and a destroyed country..
Nothing new i am afraid except it is now synchronised with the whole of the west going in along the same timeline do might not be a nice show


----------



## aus_trader (16 May 2020)

qldfrog said:


> I think democracies are socialistic in the long game.
> You just distribute wealth from top 49pc to bottom 51 and get reelection.
> Borrow budget deficit etc tax the 49pc to the hilt, you are still ok
> Until full collapse latin America style with a revolution to reset the clock and a destroyed country..
> Nothing new i am afraid except it is now synchronised with the whole of the west going in along the same timeline do might not be a nice show



It's not what it seems qldfrog. It's the middle and average incomes that pays the bulk of taxes etc. The ultra rich pays almost no taxes such as Branson who lives in a tax haven island and Trump who pays none.

I agree with you that system is not working well but it's not the ultra-rich (who have the most tax loopholes) that look after and care for the poor.


----------



## qldfrog (16 May 2020)

aus_trader said:


> It's not what it seems qldfrog. It's the middle and average incomes that pays the bulk of taxes etc. The ultra rich pays almost no taxes such as Branson who lives in a tax haven island and Trump who pays none.
> 
> I agree with you that system is not working well but it's not the ultra-rich (who have the most tax loopholes) that look after and care for the poor.



I agree whith what you say, it is not my point
top 49%=> the half of the population paying more taxes than it receives in welfare
,  no ultra rich involved, ultra richs always manage to sort their mess and win always, everywhere :the US, soviet union, even Nazi germany, China and i would bet Venezuela, or even north korea.

We have a very nice factual example with France, you reach quickly a stage where more than 50% of population does not pay taxes, once that threshold is reached, you get reelected simply by promising to increase taxes (but not the tax base) and give more benefits  (51% of the population does not care and wait for the extra welfare)-> you get reelected for life until the whole economy collapses..done between 20 and 50y based on your starting point;
Note that we are nearly there in Australia


----------



## qldfrog (16 May 2020)

Smurf1976 said:


> The article says there's 7.7 million either on Job Keeper or the dole.
> 
> That's over half the entire workforce and leaves less than a quarter of the population who's actively working and not receiving Job Keeper etc.
> 
> I can't see how that's sustainable beyond the short term.



who cares about financial sustainability? just increase the debt


----------



## qldfrog (16 May 2020)

aus_trader said:


> Good question mate. I think these Govt subsidies are unsustainable for the long term...
> View attachment 103503
> 
> https://www.afr.com/policy/economy/jobkeeper-costs-130k-per-job-20200515-p54t8y



how can it cost $130k per job saved? 3k a month: after a year around $35k ;
with $130k we can "save" a job for nearly 4y......or has our public service become so inefficient that we need to spend  $130k to distribute 35k to a tax payer
after we can argue it will make no difference and that ultimately no job will be saved...


----------



## aus_trader (16 May 2020)

qldfrog said:


> how can it cost $130k per job saved? 3k a month: after a year around $35k ;
> with $130k we can "save" a job for nearly 4y......or has our public service become so inefficient that we need to spend  $130k to distribute 35k to a tax payer
> after we can argue it will make no difference and that ultimately no job will be saved...



I had doubts about that figure as well. I think the figure is not correct. Even if you take tax revenue that will be lost to the Govt due to the job loss it should be marginally higher than $35k per annum as you mentioned. Don't know if there is some other fudge factor involved such as loss of revenue due to the business not making money as well (that is why the business owner or employer can pass on the 'Job Keeper'). Still the figure is far too big !

Please Explain, AFR who published the article ?


----------



## aus_trader (17 May 2020)

Looks like the handouts will be cut back...



https://www.msn.com/en-au/news/coro...-jobkeeper-scheme/ar-BB144eft?ocid=spartanntp


----------



## gartley (18 May 2020)

Market has followed on the projected pattern of trend as per the following post some weeks back:
https://www.aussiestockforums.com/posts/1065137/  post # 448
All that is left now is the final thrust up out of the triangle wave b pattern. If it does happen the measured move is to approx: 5762 and that should be it for the rally for some time.
Weekly cycles still projected upward  (see excel file attached). The 10 week nominal cycle has a projection of 6040-6239 however this can be invalidated with a crossing of price back below 2 offsett lines.


----------



## PZ99 (18 May 2020)

qldfrog said:


> how can it cost $130k per job saved? 3k a month: after a year around $35k ;
> with $130k we can "save" a job for nearly 4y......or has our public service become so inefficient that we need to spend  $130k to distribute 35k to a tax payer
> after we can argue it will make no difference and that ultimately no job will be saved...




If it costs $130b to save a million jobs it's $130k per job.


----------



## qldfrog (18 May 2020)

PZ99 said:


> If it costs $130b to save a million jobs it's $130k per job.



And that conflict with the quick calculation..so it is either BS and it does not cost 130b or we are using fancy data aka
If these guys were paid by the employer and both employer employee were paying taxes etc etc
Jobkeeper is 35k per annum, 1 million employees could be paid a whole year with jobkeeper for 35billions
Where the hell are the extra 100 billions gone? PR and PS hires to manage the scheme?


----------



## Smurf1976 (19 May 2020)

qldfrog said:


> Where the hell are the extra 100 billions gone?



In the absence of any proper explanation I'm assuming it's the usual trick of outright lies by someone (whoever) with a political motive.

That sort of thing has happened quite a few times in the past especially where "subsidies" are involved. Rubbish figures but they get published without question it seems.

I'll stand corrected if there's a legitimate explanation but that's what it looks like to me.


----------



## PZ99 (19 May 2020)

Guys.. the 1 million "saved" jobs is the difference between having jobkeeper and not having it.

With jobkeeper > say 6 million people are stood down and in 6 months maybe 5.5 million might return to work.

Without jobkeeper > say 6 million people are stood down and in 6 months only *4.5* million might return to work.

So the jobkeeper difference is 1 million more people get their jobs back and the program is budgeted to cost $130b overall as per the (possibly scant) treasury figures.

Therefore $130b / 1 million = $130k per job plus or minus the error tolerances...

However.... this shady underground figure with dark glasses suspects a cost blowout hence the Govts recent narrative of partial windbacks or other such evil adjustments 

PS... Looks like a big day coming up today.


----------



## aus_trader (19 May 2020)

PZ99 said:


> PS... Looks like a big day coming up today.




Yes, finished strong today...


----------



## sptrawler (19 May 2020)

qldfrog said:


> And that conflict with the quick calculation..so it is either BS and it does not cost 130b or we are using fancy data aka
> If these guys were paid by the employer and both employer employee were paying taxes etc etc
> Jobkeeper is 35k per annum, 1 million employees could be paid a whole year with jobkeeper for 35billions
> Where the hell are the extra 100 billions gone? PR and PS hires to manage the scheme?



How much of this money, will go back to the Government, in direct and indirect tax?
As we said earlier, it appears to be a very narrow band of the economy, that is getting hammered.
The actual costs, will be really interesting IMO.


----------



## aus_trader (19 May 2020)

sptrawler said:


> As we said earlier, it appears to be a very narrow band of the economy, that is getting hammered.




Do we expect any flow on effects from the sectors that are affected or would everything else go back to normal ?


----------



## sptrawler (19 May 2020)

aus_trader said:


> Do we expect any flow on effects from the sectors that are affected or would everything else go back to normal ?



That is going to be the interesting part, seeing what the flow on effect is and where it is felt.
Fuel, tourism, entertainment, and discretionary spending has been thumped, but consumer staples are up, mining is up, agriculture? Dividends in general are stopped, even if companies haven't recorded a loss
A lot of the losses appear to be on the Governments books, not on the employers books, I really can't get my head around where the massive losses are going to come from yet, but I'm no economist just wondering where the losses are going to be felt. Obviously the banks and companies like Westfield, Stockland, Qantas, Flight Centre, Hoyts etc.
But service providers don't seem to be affected, I just haven't seen anything like this style of stimulus applied before and am interested in seeing what sort of shock absorber it provides.


----------



## aus_trader (23 May 2020)

They got the numbers wrong, so we were right ASF'ers for suspecting those Job Keeper numbers reported:



https://www.msn.com/en-au/news/aust...-stimulus-program/ar-BB14ryx1?ocid=spartanntp


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## IFocus (23 May 2020)

Good pickup guys.....legends


----------



## InsvestoBoy (28 May 2020)

As of last nights NYSE close,

MSCI Australia Index (EWA on NYSE) and FTSE RAFI US 1000 (QUS on the ASX or PRF on NYSE) are outperforming SPX and NASDAQ-100 ETF (SPY and QQQ respectively) off the March bottom




Cyclicals kicking ass. EWA outperforming QQQ by just under 9%!

I hold VAS and QUS.


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## moXJO (28 May 2020)

I don't get the rally.
 Not complaining as I held a bunch of afterpay by accident. 
But I was not expecting it to come back as hard as it did.


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## sptrawler (28 May 2020)

moXJO said:


> I don't get the rally.
> Not complaining as I held a bunch of afterpay by accident.
> But I was not expecting it to come back as hard as it did.



I can't help but wonder if the insto's data is showing most of the solid companies, have dodged a bullet and the recovery is going to be faster than first thought.
As investo boy stated credit card spending is up, medium and large sized companies not attached to financials, tourism, hospitality or discretionary spending have hardly felt a blip, on their bottom line.
Those that have felt a hit have stopped dividends and spending to retain capital, so some sectors will have a slow recovery, but most may not have been affected e.g mining, agriculture, non discretionary spending, consumer staples.
Just my thoughts, but I think the Government has taken the hit, not the economy. That might come later.
Of course that could be all BS and we are just having a dead cat bounce, before the second dip.


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## InsvestoBoy (28 May 2020)

moXJO said:


> I don't get the rally.
> Not complaining as I held a bunch of afterpay by accident.
> But I was not expecting it to come back as hard as it did.




Maybe you don't get the rally because you don't get the crash?

It doesn't appear the crash was a fundamental re-pricing of risk, but rather a liquidity crisis deep in the bowels of the financial system.

So the rally could simply be the cessation of *immediate* liquidity problems (I say immediate because there are still indications in bid/ask spreads and stuff that liquidity is still low).

If everyone who needed to sell has finished selling then the market can easily rally on short covering, put exercises and retail sentiment, especially if liquidity is low (see seasonal rallies in Dec).


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## basilio (28 May 2020)

Well why not follow  the leader ?  If we all believe that the market must know what it is doing then surely now is the time to pile in and beat the rush..

Surely there couldn't be a  massive disconnect between the biggest gambling school in the world and economies where  companies have to pay their bills, people have to have jobs and real products are made  and sold...


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## sptrawler (28 May 2020)

basilio said:


> Well why not follow  the leader ?  If we all believe that the market must know what it is doing then surely now is the time to pile in and beat the rush..
> .



Did that on 10 and 24 March. One lot too early, the next too late. the story of my life.


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## aus_trader (29 May 2020)

moXJO said:


> I don't get the rally.
> Not complaining as I held a bunch of afterpay by accident.
> But I was not expecting it to come back as hard as it did.




I was most surprised myself, especially by the Fintech sector strength, which is comprised of stocks like APT. After watching for a while, then denying for a while, then thinking if I should just go with the flow instead, decided to buy a Fintech junior to get exposure to this speeding sector.


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## qldfrog (29 May 2020)

If my years in the market have told me anything, it is: you have 2 options, go multidecade with value based dividends and invest for an annuation style income , aka what millions did with banks and blue chips.
just hope you are lucky to invest when the market is at low tide and repeat, *time in the market, value *during crash, hold on.
Or follow the lemmings during boom and crash, no need to be right, just agile to jump in time and understand the psyche
Very hard to do when you are a contrarian, sceptical question asking fiercely individual guy..a pain in the xxx to many...
So i try to rely on formula and indicators to read the crystal ball


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## Trendnomics (31 May 2020)

Another question this thread should've asked, is: "How far will the market retrace?". The current market is reminiscent of the large 2008 retracement, prior to the subsequent crash to the 2009 low's. I can fondly remember this period, as this is when I was still cutting my teeth in the world of equity trading.

2008 Retracement:



2020 Retracement:



I'm calling XAO @ 6030 as the peak of the current retracement.

I'm not a fundamentals trader, nor is this call influencing my systematic trading (I'm currently still largely cash, per my system's discretion). But seriously, if you believe in a total V-shaped economic recovery or that government stimulus is our saving grace, then you should open a unicorn petting zoo.


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## InsvestoBoy (3 June 2020)

ASX 200 (black) and S&P 500 priced in AUD (blue) from 23rd March,

alternative title: when FX vol crushes your growth portfolios relative perf


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## InsvestoBoy (3 June 2020)

See this discussion with @Sharkman https://www.aussiestockforums.com/threads/nab-national-australia-bank.1093/page-32#post-1069967 on the NAB thread.

Post Corona rally, VEU up ~11%, IVV up ~15%, STW up (per above) ~27%.

FX vol and sector composition matters.


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## systematic (3 June 2020)

Trendnomics said:


> But seriously, if you believe in a total V-shaped economic recovery or that government stimulus is our saving grace, then you should open a unicorn petting zoo.


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## MrChow (7 June 2020)

MrChow said:


> S&P500 isn't even priced for a bear market at the moment (technically -19%).
> 
> So I think short-term movements: pushing -40% was oversold, getting back within -20% is now overbought, are overshooting both ways and we should see a reversal for some balance.
> 
> On a longer time scale I am high conviction that they can get back to 3000 before the end of September.  I think a secondary wave from October on is the real danger.




https://www.aussiestockforums.com/threads/how-far-will-the-market-fall.35253/page-20#post-1064407

S&P500 has made it back over 3000 as expected.

But the risk / reward now looks worse to me than when there was accepted panic in March.


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## aus_trader (8 June 2020)

Only thing it's having some really good days like on Friday:



So watching how this all unfolds going forward... As I am exposed to "Long Equities", as I have bought some stocks with the bounce from the March Lows.


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