# It's so quiet here - is fear gripping you?



## yonnie (28 July 2007)

hi folks,

did you see all the red on your screen last Friday and likely more to come on Monday?

well it aint that bad.

US GDP for the last quarter grew fastest for the year
US inflation very benign
US consumer sentiment better than expected and up on the month before despite the housing market and the sub-prime mortgage issues
underlying fundamentals of the global economy are strong.

so dont fret, its just a little hiccup.


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## chicken8 (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*

my watchlists were redder than a whale's periods

its a bit unnerving knowing that the XAO tends to follow the DJI quite closely

but the markets been so bullish lately, i think there'll be alot of amateur investors out there at the moment also expecting a minor correction and jumping in when the prices are cheap.

we may bounce back from this very strong


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## motorway (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*

Nope 

Whats that knocking sound I hear ?



> Prices 'will stay sky-high for years'




http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/27/cnhamb127.xml


motorway


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## aaronphetamine (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*

Could be time to wheel the old meth lab out, to make a bit of money


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## yonnie (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



motorway said:


> Nope
> Whats that knocking sound I hear?motorway




do you agree with that motorway?

I would think if demand for Chinese produce drops from the US/Europe/Japan, the building boom in China would grind to a stand still.
Its not as if China is isolated from the rest of the world and will build on regardless.


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## purple (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



chicken8 said:


> my watchlists were redder than a whale's periods




Ouch. that was gory - the whale, i mean. spare me the details! 



motorway said:


> Nope
> 
> Whats that knocking sound I hear ?
> 
> ...




good read. Yes, the Rio Tinto - Alcan takeover bodes well for the future of Australian resources.  $44billion, at 3x higher than the nearest competing bid, is a *very high price to pay *if you're not expecting the resources boom to last.


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## Wysiwyg (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



aaronphetamine said:


> Could be time to wheel the old meth lab out, to make a bit of money





We don`t need that garbage "made available" to the youths of Australia.

Wake up to yourself .


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## wayneL (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*

Of course fear is gripping the market... for good reason. 

Business as usual for swingers though.


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## GreatPig (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



> Prices 'will stay sky-high for years'



Hmm...



> Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as they have predicted. I expect to see the stock market a good deal higher within a few months.



Dr. Irving Fisher, Professor of Economics at Yale University, one of the most important US economists of his day, speaking on October 17, 1929, a few weeks before the Great Crash.

GP


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## krisbarry (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



aaronphetamine said:


> Could be time to wheel the old meth lab out, to make a bit of money




Yes I have my tomato crops ready to plant...only 1 problem water restrictions


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## Absolutely (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



chicken8 said:


> my watchlists were redder than a whale's periods




Mine too but this comparison sure drew a smile at least !!


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## purple (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



chicken8 said:


> my watchlists were redder than a whale's periods




er...was that a sperm whale?


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## yonnie (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



purple said:


> er...was that a sperm whale?





no, just a bloody whale


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## theasxgorilla (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



Stop_the_clock said:


> Yes I have my tomato crops ready to plant...only 1 problem water restrictions




For some reason STC, when you say _tomato crops_ I don't think you actually mean _tomato crops_...do you?


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## purple (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



yonnie said:


> no, just a bloody whale




LOL!
now it's not so quiet anymore - laughter is gripping me!


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## dhukka (28 July 2007)

*Re: Its so quiet here - is fear gripping you?*



yonnie said:


> hi folks,
> 
> did you see all the red on your screen last Friday and likely more to come on Monday?
> 
> ...




Since there has only been 2 quarters this year and the first one grew a paltry  0.7% not such an amazing feat. 

The irony is that whilst the US economy grew at a robust *3.4%* in 2Q07 the underlying economy continued to deteriorate.

Consumer spending increased *1.3%* in the second quarter after a *3.7%* gain in the first. Since the US economy is 2/3 driven by the consumer I'd say this is of major concern. Retail numbers in June were anemic. The consumer is tapped out and feeling the pinch of higher food and energy prices.



> US inflation very benign




Benign if you subscribe to the school that measures inflation ex-inflation. Core inflation (excluding food and energy) rose at an 1.4% annual rate in the second quarter from 2.4% in the first pushing the yearly gain down to *2.0%* - the top end of the Fed's perceived "comfort zone".

However headline inflation accelerated to a *4.3%* annual rate, the fastest pace since the fourth quarter of 1990. 



> US consumer sentiment better than expected and up on the month before despite the housing market and the sub-prime mortgage issues




My bet is the consumer won't have such a rosy picture of things next month. 



> underlying fundamentals of the global economy are strong.




Any weakness in US domestic demand tends to show up in other major economies 6-9 months later. Continued deterioration in the US economy will have repercussions for the rest of the world.


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## yonnie (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*

thank you dhukka for your contribution.

so you think we all should be very fearful if long only?


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## Pommiegranite (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*



dhukka said:


> Since there has only been 2 quarters this year and the first one grew a paltry 0.7% not such an amazing feat.
> 
> The irony is that whilst the US economy grew at a robust *3.4%* in 2Q07 the underlying economy continued to deteriorate.
> 
> ...




How about the fact that there is low unemployment levels in the US? Usually high unemployment is a precursor to a depression.

My only fears are, now  that I hold 50% cash, I may jump back in too early.


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## dhukka (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*



Pommiegranite said:


> How about the fact that there is low unemployment levels in the US? Usually high unemployment is a precursor to a depression.
> 
> My only fears are, now  that I hold 50% cash, I may jump back in too early.




Pommiegranite,

Official numbers have growth in non-farm payrolls this year averaging *145,000* a month down from the *2006* monthly average pace of *189,000*. 

Remember that the US needs to add *150,000* new jobs per month just to keep pace with population growth. 

Consider this from Hoisington Investment Management 

_"Non-farm household employment (population and payroll-adjusted by the BLS), an alternative jobs measure that historically has been more accurate at cyclical turning points, expanded 45,000 per month this year compared to a 235,000 average monthly gain in 2006, an *80%* decline."
_

_"Further, employment at temporary help agencies, which has led employment in the past, declined this year"_

If you read the article there is a chart that shows temp employment is a reasonable leading indicator of employment.

The employment picture is far from dire but I'm skeptical of the official numbers that paint a rosy picture.


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## BIG BWACULL (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*

Whats that crashing sound!! (Oh its just the market):hide:


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## chops_a_must (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*



Pommiegranite said:


> Usually high unemployment is a precursor to a depression.



The only precursor to a depression is a recession.


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## 2020hindsight (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*

They say 
a) "sell on good news", and 
b) "buy on bad"
trouble is I don't have any money to "buy" with, lol - I forgot step a)  

ahhh shinbone - money is of no consequence - unless you have none.


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## BIG BWACULL (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*

Did someone say something? i'm still here :hide:
Depending how tomorrow goes i may still be here :hide:


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## krisbarry (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*

There's a *bear* in there and stories to tell...Open wide, come inside, its play school.


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## It's Snake Pliskin (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*

I'm looking forward to the next few weeks. 

I'm not over leveraged, invested, nor, bearish. I like play school though, and big ted is in control.

Have fun.


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## 2020hindsight (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*



Stop_the_clock said:


> There's a *bear* in there and stories to tell...Open wide, come inside, its play school.



what's the guess for the Dow next weekend? 
at this point, you are still (probably) ahead if you stayed with the market, rather than take the "sell in may".  but things could change if those storm clouds keep bucketing on us. 

when to come in? - surely this week sometime (?)


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## dhukka (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*



yonnie said:


> thank you dhukka for your contribution.
> 
> so you think we all should be very fearful if long only?




On the contrary if you are long quality stocks that you bought at reasonable prices ensuring a margin of safety then why be fearful? 

If however you buy stocks without any reference to intrinsic value you may well have something to fear. As Buffet once said: 

_"Its only when the tide goes out that you see who has been swimming naked"_


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## BIG BWACULL (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*

Am 38.39% in front at the moment  But :hide:


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## Spaghetti (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*

I do have fear. I do not fear the facts relating to resource stocks but I fear market sentiment being out of tune with mine. You can read all you like on the facts but you need to be able to read the minds of thousands to get through this patch. And if everyone waits to see what everyone else is doing nothing will happen. This market will only get turned around by the big end of town.


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## 2020hindsight (29 July 2007)

*Re: Its so quiet here - is fear gripping you?*



BIG BWACULL said:


> Am 38.39% in front at the moment  But :hide:



Exactly  - but I'm sure many bears around here have been criticised on that score before. right eventually - but at what cost ?

Spaghetti - yep - well put - difficult to be in step with the market when it can be such an illogical beast (IMhumbleO) - not that I know enough to know what is logical either  

when to come in? - Here are some dice to help you decide.


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## BIG BWACULL (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*

:hide:


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## trading_rookie (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*

Good to see some green on my watchlist...it was a very nervous weekend indeed.


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## tech/a (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*

Corrections/or prolonged downturns dont manifest themselves as a "V" reversal.

The key to watch is volume.
If the index goes up or indeed shows some form of strength on LIGHT VOLUME,then the strength should be veiwed as weak.

Often short term corrections will take the shape of 3 waves.
One impulsive down,One weak move toward old highs,followed by a stronger move below the first waves lows.
If this then becomes a prolonged down move (which I suspect) then the corrective pattern will turn into a 5 wave down move with wave 4 showing similar characteristics to wave 2.

*VOLUME* and *RANGE* watch these for clues.

Not over yet by a long shot.


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## 2020hindsight (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*

welcome to **** Creek. Sorry, but after last week , we're right out of paddles - Good luck!


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## BIG BWACULL (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*

:grenade::hide: I'm safe i'm under a chair lol


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## Morgan (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*

To tell the truth, today's complete disregard of Friday's fall on the DOW is making me even more nervous!  I'm exiting a few breakeven postions this afternoon to be on the safe side- after all, it only costs $30 to buy them back.
If the DOW has a fall again tonight- then could be very interesting tomorrow....


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## BIG BWACULL (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*

:jump::hide:


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## lusk (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*



2020hindsight said:


> welcome to **** Creek. Sorry, but after last week , we're right out of paddles - Good luck!




lol

Thats ok, its the bear in the back seat and the crocs in the water that have me worried.


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## 1stunnedmullet (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*

If this then becomes a prolonged down move (which I suspect) then the corrective pattern will turn into a 5 wave down move with wave 4 showing similar characteristics to wave 2.

if your getting into classic elliot wave here then I thought the corrective waves usually alternated, between simple (3 wave down up down) and complex (all over the shop with a general direction..messy way of putting it)?

am i getting flogged..yep
am i worried..to an extent but I gotta hold my nerve

charts will tell the story over the coming days, starting uni with the market like this does not help 

just thinking, people have 'stops' in place but with markets down like this how many have honoured them? or turned around and said this is panic selling if i sell 'with the crowd' now then I'll be watching it soar next week?


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## nioka (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*



Morgan said:


> - after all, it only costs $30 to buy them back.



Plus $30 to sell them. And what if you have to pay more to get back in. OK for the day trader but not for the genuine investors. Maybe this situation is created by the brokers on a regular basis as a means of increasing turnover.


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## Pommiegranite (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*

Can anyone tell me how accurate US stock futures actually are?

I'm assuming they become less accurate the further into the future of the day they are trying to predict..i.e more accurate predicting the open than the close.

Would me nice not to have to wake up early to see how the Dow performed.


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## wayneL (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*



Pommiegranite said:


> Can anyone tell me how accurate US stock futures actually are?
> 
> I'm assuming they become less accurate the further into the future of the day they are trying to predict..i.e more accurate predicting the open than the close.
> 
> Would me nice not to have to wake up early to see how the Dow performed.



With the possible exception of treasuries, futures do no predict prices at all, they reflect the cash price plus or minus factors such as cost of carry, forward demand vs current demand etc.


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## Pommiegranite (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*



wayneL said:


> With the possible exception of treasuries, futures do no predict prices at all, they reflect the cash price plus or minus factors such as cost of carry, forward demand vs current demand etc.




Thanks WayneL,

So the headline on http://www.marketwatch.com/ should be in a smaller font size?


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## CanOz (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*



wayneL said:


> With the possible exception of treasuries, futures do no predict prices at all, they reflect the cash price plus or minus factors such as cost of carry, forward demand vs current demand etc.




Generally though Wayne, wouldn't you agree that index futures _usually_ indicate where the index will open.

Cheers,


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## wayneL (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*



Pommiegranite said:


> Thanks WayneL,
> 
> So the headline on http://www.marketwatch.com/ should be in a smaller font size?



The futures in the premarket will reflect

A/ what's happening in Europe
B/ whats happening in after hours trading of stocks

It is still responding rather than predicting.

****Re marketwatch; Journalists are muppets


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## wayneL (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*



CanOz said:


> Generally though Wayne, wouldn't you agree that index futures _usually_ indicate where the index will open.
> 
> Cheers,



Only *immediately* before, by which time aftermarket is in full swing and bid/asks are entered ready for the open of stocks not already trading.

Still resposive to what IS happening, and not predictive.


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## CanOz (30 July 2007)

*Re: Its so quiet here - is fear gripping you?*



wayneL said:


> ****Re marketwatch; Journalists are muppets




CNBC is much worse IMO...i used to honestly think that most news moved markets...its actually the opposite in most cases. Most news outlets seem to wrap stories around the price action of the particular market...sure large stories move sentiment and markets, but most minor news is irrelevant or already priced into markets.

It just annoys me that every little bounce or rally, dip or slide is always the result of news rather than technicals...what a bunch of crap.

Cheers,


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## explod (14 April 2013)

*Re: Its so quiet here - is fear gripping you?*

Of late I have sensed a vibe of pessimism in the news, here on ASF and in fact this thought has made me realise that there is a lot of anger and picking between posters here on ASF of late too.  Not just the pollie stuff either.

Nearly started a new thread but on musing dusted this one off and had a read through (worth the little trip).  It covers the period leading up to the 2008 crash so there was a feeling of unease back then.

I have my ideas and think we are close to a brink again, and much bigger.  This could be one of the underlying causes.

Many here know me as a bit of a conspiracy theory doom and gloomer so I will try to restrain myself to see what others think.   And I would like to lift the spirits of our bit of cyberspace here too.  It is lonely when there is no honest (not hating) fighting around the place.  He he., no names no pack drill .


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## YMI (14 April 2013)

*Re: Its so quiet here - is fear gripping you?*

I think it was 2009 when I heard the story about someone who had predicted the 2008 financial crisis correctly, apparently before it happened. Can’t remember his name but you would expect an economist, far wrong his field was psychology. But he also predicted another financial crisis, much worse and much longer than the 2008 one. He assumed it would start in 2012 and reach its worst point in 2015.

I found this interesting because 2009 looked more like recovery than a new financial crisis but soon after it seemed as if increasingly news were reporting about enormous national debt of certain European countries and then USA. Since then it has become even worse and doesn’t matter how hard they try to save money, the debt continues to rise and there is no prospect of considerable decrease.

Not sure if that will actually happen in 2015 but I think if there is another financial crisis, there is a chance that it’s not caused by an outbreak of a war or bankruptcy of a bank but maybe by national debt of some bigger countries.


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## pixel (14 April 2013)

*Re: Its so quiet here - is fear gripping you?*



YMI said:


> I think it was 2009 when I heard the story about someone who had predicted the 2008 financial crisis correctly, apparently before it happened. Can’t remember his name but you would expect an economist, far wrong his field was psychology. But he also predicted another financial crisis, much worse and much longer than the 2008 one. He assumed it would start in 2012 and reach its worst point in 2015.
> 
> I found this interesting because 2009 looked more like recovery than a new financial crisis but soon after it seemed as if increasingly news were reporting about enormous national debt of certain European countries and then USA. Since then it has become even worse and doesn’t matter how hard they try to save money, the debt continues to rise and there is no prospect of considerable decrease.
> 
> Not sure if that will actually happen in 2015 but I think if there is another financial crisis, there is a chance that it’s not caused by an outbreak of a war or bankruptcy of a bank but maybe by national debt of some bigger countries.




One didn't have to be an economist, nor a psychologist, to get a forewarning of the 2008 crisis. Even in Forums like this one, analysts voiced concerns as early as mid-2007 about an imminent and severe correction. If you can still find posts by kahuna1, he arrived at the conclusion from his observation of global markets. I didn't know him then, but my charts of the XJO and Overseas indices suggested a sufficiently strong chance of the downturn, that, by October 2007, I was close to 90% in cash. Throughout 2008, I traded by Bear Market rules, and from March 2009 was back to 90% invested.

The current chart is starting to resemble its equivalent in early to mid-2007; consequently, I'm reducing my market exposure until the picture becomes clearer.

Monthly chart with MACD Divergences;



Weekly chart warned early in 2007, starts showing a similar MACD Divergence now:


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## sptrawler (15 April 2013)

There is fear out there, people feel wedged between a rock and a hard place.

The U.S is devaluing their currency, with the result that their manugactured goods become more competitive. Just check out the increase of sales in something like the Jeep Grand Cherokee.

http://www.southport.cjddealer.com....ents/jeep_grand_cherokee_breaks_sales_records

http://wot.motortrend.com/jeep-sets...d-by-grand-cherokee-312547.html#axzz2QUADp2nN

This along with cheap money is driving the U.S markets, understandably.
What is happening here? Manufacturing collapsing, retail collapsing, mining slowing, this causes insecurity. 
Add to that increasing taxes, lowering interest rates, reduncancies and closures, the list just about covers all Australians.

So what does the government do? Rather than lead with a calm reasurring hand, making small sensible adjustments in a controlled manner, they jump from pillar to post abusing all and sundry.

Now we have a scenario where the currency is too high, the only tool at the RBA's disposal is interest rates.
So as they drop them, nervous investors jump into dividend shares and housing, which is already overpriced.

So how can it not end in tears? 
The government, instead of changing taxes that assist in tackling the underlying issues e.g negative gearing, they introduce new taxes to cause further mayhem. New grandiose ideas, that everyone knows are going to compound the problem and further increase taxes. 
Where is the money for all these new 'clean' technology jobs, the carbon tax was going to bring about. 

So is fear gripping me? the short answer yes.


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## MrBurns (15 April 2013)

I've been waiting for a real estate crash for 5 years but things just keep churning along.

Europe and everything else that's wrong with the system doesn't stop people wanting to invest so I really think things will just continue on as they have been.

At some point there will be a panic and markets will drop but they'll bounce back because people have to put their money somewhere.


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## VSntchr (15 April 2013)

In 2008 a lot of stocks looked pretty expensive, whereas now - many stocks seem to be about fair-value...some expensive, some still cheap.

This doesn't mean we can't still crash though! Just worth considering


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## skc (15 April 2013)

Back in 2007/2008, the financials crashed hard yet the materials managed to stay high for some time. For instance, CBA's top was ~Nov 2007, while FMG peaked in Jul 2008.

Now we are seeing the exact opposite. CBA is at all time high, while FMG just barely above 4 year low.

The question of course is which way will it break...


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## chops_a_must (15 April 2013)

skc said:


> Back in 2007/2008, the financials crashed hard yet the materials managed to stay high for some time. For instance, CBA's top was ~Nov 2007, while FMG peaked in Jul 2008.
> 
> Now we are seeing the exact opposite. CBA is at all time high, while FMG just barely above 4 year low.
> 
> The question of course is which way will it break...




The problem is, people are still in love with their miners.

So many people are trying to buy falling knives. We've got a little way to go yet, but people need to adjust their thinking, and have a look at some different areas of the market.

There are great stocks, with great charts out there. And on my watchlist, not too many have dropped.


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## Gringotts Bank (15 April 2013)

For no apparent reason, a fairly big sell off today.  In the news tonight, the market commentators will say "the Ords was off 70 points because of factor X", but this is never the real truth.  The truth is that sentiment changed and no one knows why, so we try to come up with an explanation.  If economic news caused markets to move, then we would not see negative news getting shrugged off in bouyant times.  Nor would we see positive economic news get ignored when sentiment is low.  But both these things _do happen_ - we've all seen it.  Sentiment changes how we perceive the very same data.

Truthful market commentary would say "The market was down 70 points today because there was more fear, and we don't know why, but there was.  Sentiment changed.  Now it's over to Jim with all of today's weather.  Jim what have you got for us this week?"


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## skc (15 April 2013)

Gringotts Bank said:


> For no apparent reason, a fairly big sell off today.




Commodities got canned Friday night leading to a pretty weak open. The big Chinese data miss drove the market down another ~50pts since noon. 

So there're some pretty apparant reasons.


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## Trembling Hand (15 April 2013)

Gringotts Bank said:


> For no apparent reason, a fairly big sell off today.  In the news tonight, the market commentators will say "the Ords was off 70 points because of factor X", but this is never the real truth.  The truth is that sentiment changed and no one knows why, so we try to come up with an explanation.  If economic news caused markets to move, then we would not see negative news getting shrugged off in bouyant times.  Nor would we see positive economic news get ignored when sentiment is low.  But both these things _do happen_ - we've all seen it.  Sentiment changes how we perceive the very same data.
> 
> Truthful market commentary would say "The market was down 70 points today because there was more fear, and we don't know why, but there was.  Sentiment changed.  Now it's over to Jim with all of today's weather.  Jim what have you got for us this week?"




Clueless, 

http://www.bloomberg.com/news/2013-...less-than-estimated-7-7-in-first-quarter.html

http://www.bloomberg.com/news/2013-...founder-s-birth-amid-heightened-tensions.html


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## Gringotts Bank (15 April 2013)

skc said:


> Commodities got canned Friday night leading to a pretty weak open. The big Chinese data miss drove the market down another ~50pts since noon.
> 
> So there're some pretty apparant reasons.




Why did commodities get canned Friday night?  No one knows.


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## Trembling Hand (15 April 2013)

Gringotts Bank said:


> Why did commodities get canned Friday night?  No one knows.




You know how you like to draw your random lines all over charts. Well _this _time a real important one got taken out.

Now add in China and you have a real explainable reason why all the markets got smashed 2 seconds after the news.


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## Gringotts Bank (15 April 2013)

Trembling Hand said:


> You know how you like to draw your random lines all over charts. Well _this _time a real important one got taken out.
> 
> Now add in China and you have a real explainable reason why all the markets got smashed 2 seconds after the news.




Even when you're wrong, you're quite sure you're right!  It's a rare talent - you and Julia Gillard!  :


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## Trembling Hand (15 April 2013)

Gringotts Bank said:


> Even when you're wrong, you're quite sure you're right!  It's a rare talent - you and Julia Gillard!  :




No worries mate one day you might stop being lazy and learn what moves markets. Then ya can even start trading them with money if your smart enough...... till then.................. :


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## Gringotts Bank (15 April 2013)

Trembling Hand said:


> No worries mate one day you might stop being lazy and learn what moves markets. Then ya can even start trading them with money if your smart enough...... till then.................. :




You sound extra pleased with yourself today!  Head swell factor: 8.5.  You did top out at a 10 the other day but I forgot to mention it.  :


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## Gringotts Bank (15 April 2013)

skc, did you read the bit about where I said if the markets were in a very bouyant phase, that such a report from China would be shrugged off?  Hence news doesn't move markets, sentiment does.


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## skc (15 April 2013)

Gringotts Bank said:


> skc, did you read the bit about where I said if the markets were in a very bouyant phase, that such a report from China would be shrugged off?  Hence news doesn't move markets, sentiment does.




Where do you think market sentiment comes from?

1. An assessment of information available (past, present and forward looking).

2. Gut feel.


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## Gringotts Bank (15 April 2013)

skc said:


> Where do you think market sentiment comes from?
> 
> 1. An assessment of information available (past, present and forward looking).
> 
> 2. Gut feel.




Sentiment = gut feel (Latin, sentio - "I feel").

It comes from an assessment of information available (past, present and forward looking), mainly price action I expect.

How does this change anything?


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## skyQuake (15 April 2013)

Gringotts Bank said:


> Sentiment = gut feel (Latin, sentio - "I feel").
> 
> It comes from an assessment of information available (past, present and forward looking), mainly price action I expect.
> 
> How does this change anything?




You dont need sentiment to move the markets. A fund would assess information available, but not sentiment. An algo would not have sentiment.

Personally I think its just semantics at play here.


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## skc (15 April 2013)

Gringotts Bank said:


> Sentiment = gut feel (Latin, sentio - "I feel").
> 
> It comes from an assessment of information available (past, present and forward looking), mainly price action I expect.
> 
> How does this change anything?




Let's do some algebra.

Sentiment = an assessment of information available.

News = information.

Substitute these words into your statement below gives...



Gringotts Bank said:


> Hence news doesn't move markets, sentiment does.




Hence information doesn't move market, assessment of information available does.

So like SkyQ says it's just semantics.


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## Gringotts Bank (15 April 2013)

skc said:


> Let's do some algebra.
> 
> Sentiment = an assessment of information available.
> 
> ...




Maybe it is.  The point I was trying to make is that information in itself will not move any market until certain institutions have filtered it through a whole range of beliefs/expectations/knowledge.  So the output (buy or sell) won't be a *direct* result of information, but more a result of the way the information is _perceived_.  This perception is very different between different people.  Fund x hears the news and decides to liquidate everything.  Fund Y hears the news and decides to buy on weakness.

Anyway, thank you for the respectful conversation.  You may disagree, or even prove me wrong with your next post.  No problem with that.


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## Trembling Hand (16 April 2013)

Gringotts Bank said:


> Maybe it is.  The point I was trying to make is that information in itself will not move any market until certain institutions have filtered it through a whole range of beliefs/expectations/knowledge.  So the output (buy or sell) won't be a *direct* result of information, but more a result of the way the information is _perceived_.




I disagree. Yesterday China news was a great example. There has been aggressive selling in all China markets for two months. The last week what selling he/they have done has quickly been absorbed. Not so yesterday. Bad news = smash and smash hard because he/they knew they would get away with it on a bad news day.

GB thats why you have squawk boxes on trading floors- actually three different services. It enable you to exercise your trading ideas. Take opportunity in an instant when they show up. Most traders base there day/week around news releases and how to game them.


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## odds-on (16 April 2013)

skc said:


> Let's do some algebra.
> 
> Sentiment = an assessment of information available.
> 
> ...




The first issue with the "information" provided by the news is that it is produced by the mainstream media and the mainstream media all write alike. The second issue with the "information" provided by the news is whether or not it is actually correct. 

I think it is very important to underweight news involving the results of complex economic/political/social interactions, especially if experts and statistics are involved. On the flipside, I think it is important to overweight news that means a change in state for a business (e.g. merger, CEO resignation, selling of assets).

Cheers


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