# All Ords to bottom out at 5800???



## Fuller (15 January 2008)

Where does everyone think the XOA All Ords will bottom out in this latest correction.

I think about 5800.

I'm relatively new to stock market investing. I bought about 50K of stocks back in Nov and I am already down about 4K.

I'm looking to top up some of my stocks soon as there seems to be some really good value at the moment.

Can anyone suggest some good long term blue chips that represent good value currently.

I have only just discovered this web site in the last week. This is absolutely brilliant.


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## Lucky_Country (15 January 2008)

Could go either way atm but my personal thinking is we are near the bottom already.
Some good half yearly reports and takeover activity could push the market higher.
Australian companies in general are in pretty good shape


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## dhukka (15 January 2008)

Fuller said:


> Where does everyone think the XOA All Ords will bottom out in this latest correction.
> 
> I think about 5800.
> 
> ...




Any particular reason and/or analysis to support your forecast of 5800?


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## Aussie2Aussie (15 January 2008)

Lucky_Country said:


> Could go either way atm but my personal thinking is we are near the bottom already.
> Some good half yearly reports and takeover activity could push the market higher.
> Australian companies in general are in pretty good shape




Maybe 5,000, a few peaks and troughs along the way but my guess is it will settle around there before it recovers.
How long it settles there is another question.


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## Sean K (16 January 2008)

I think Great Pig had a chart showing long term up trend support around 5600, which would coincide with what seems to be significant horizontal support around 5650. To be corrected...


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## tech/a (16 January 2008)

Just another technical view.


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## mfp (16 January 2008)

Fuller said:


> Where does everyone think the XOA All Ords will bottom out in this latest correction.
> 
> I think about 5800.
> 
> ...




I may be proven wrong, but i very much doubt this is just another correction Fuller. I think you may have entered the market at the worst possible time. The DOW just got smashed again and closed at 12500 (right on the Aug intraday low). Watch the selling intensify with a close below that. Also, Asian, European and Oz markets are at multi-month lows. 5800 bottom is extremely optimistic and i would not be surprised if we cannot hold 5000 in coming months.


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## Awesomandy (16 January 2008)

mfp said:


> 5800 bottom is extremely optimistic and i would not be surprised if we cannot hold 5000 in coming months.




I would think that 5800 is probably the most likely level we will rebound from, purely for the reason that I think everyone deserves to have a bit of beginner's luck. 

Although, on the pessimistic side (which, unfortunately, is probably a little bit more realistic than the above scenario)... I can quote from someone I know of, who has a great understanding of the market: this period will be referred to in history as the "2007/8 credit market crash". If we add up the announced losses from the subprimes, we get perhaps around 100 - 200 billion dollars. However, based on some of the estimates I've read, losses could be > 1 trillion dollars. My question is, where have they hidden the rest of the losses? They'll have to come out sooner or later...


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## mfp (16 January 2008)

Awesomandy said:


> I would think that 5800 is probably the most likely level we will rebound from, purely for the reason that I think everyone deserves to have a bit of beginner's luck.
> 
> Although, on the pessimistic side (which, unfortunately, is probably a little bit more realistic than the above scenario)... I can quote from someone I know of, who has a great understanding of the market: this period will be referred to in history as the "2007/8 credit market crash". If we add up the announced losses from the subprimes, we get perhaps around 100 - 200 billion dollars. However, based on some of the estimates I've read, losses could be > 1 trillion dollars. My question is, where have they hidden the rest of the losses? They'll have to come out sooner or later...




We will have many bounces, rebounds, rallies or whatever you want to call them, on the way down. That's what bear markets do, they keep you interested all the way to the bottom.


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## The Mint Man (16 January 2008)

Well For the sake of it I will say around 5600 give or take a bit Anyone that says they can predict where it will end up is kidding themself IMO Although I don't do any T/A what so ever, heres something I prepared earlier.



Cheers

EDIT: Of course this assumes our market will keep going down!!!


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## dhukka (16 January 2008)

Awesomandy said:


> If we add up the announced losses from the subprimes, we get perhaps around 100 - 200 billion dollars. However, based on some of the estimates I've read, losses could be > 1 trillion dollars. *My question is, where have they hidden the rest of the losses?* They'll have to come out sooner or later...




It's not just sub prime but delinquencies are rising across the whole range of mortgages, Alt-A, ARMs, Jumbo's and even prime. In addition to the writedowns take note of how much Banks are raising their loan loss provisions. Citi's writedown was *$18* billion but you can add another* $4* billion to that for increased loan loss reserves. Capital put aside for loan loss reserves is capital that can't be lent out, restricting borrowing and curtailing economic activity. 

Jan Hatzius of Goldman Sachs recently said that $400 billion worth of writedowns could reduce lending by about *$2* trillion. That is why the Fed is limited in their ability to stimulate the financial system. They can provide all the liquidity they want but they can't make banks lend it out. Especially if said banks are struggling just to stay afloat. 

If you add up likely defaults in CDO squared's, CDS, Commercial real estate, auto loans, credit cards, all with rising default rates ,you can  get to $1 trillion quite easily. IMO the monoline insurers like AMBAC and MBIA will be the next big show to drop, meanwhile there will be plenty of smaller ones.


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## wayneL (16 January 2008)

Fuller said:


> I think about 5800.



Well SPI is ~5800 right now.

It's now or never. :


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## Awesomandy (16 January 2008)

wayneL said:


> Well SPI is ~5800 right now.
> 
> It's now or never. :




Alright. All bets on black NOW!


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## Sean K (16 January 2008)

XAO hasn't passed 5850 by my screen.


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## wayneL (16 January 2008)

kennas said:


> XAO hasn't passed 5850 by my screen.



It's like Melbourne weather... just wait 5 minutes. :


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## korrupt_1 (16 January 2008)

5 minute chart of the XJO... A nice decending triangle is forming...
Could break 5800 anytime soon..

I'll be shorting on the re-test of the breakout of 5800.


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## tronic72 (16 January 2008)

The Mint Man said:


> Well For the sake of it I will say around 5600 give or take a bit Anyone that says they can predict where it will end up is kidding themself IMO Although I don't do any T/A what so ever, heres something I prepared earlier.
> View attachment 16885
> 
> 
> ...




Actually, I think you may be pretty much on the Mark. I'm current sitting on the same amount of capital I had at this time last year and your resistance line points to November last year.

Glad I put all that time and effort into the Market. Live and Learn huh.


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