# Bottom picking the All Ordinaries



## Snakey (4 July 2008)

Well by charting the all ords over the past 10 years I would say the bottom should be around 4800 but could be as low as 4200. Any one else like to give there newly updated figures?


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## Sean K (4 July 2008)

Snakey said:


> Well by charting the all ords over the past 10 years I would say the bottom should be around 4800 but could be as low as 4200. Any one else like to give there newly updated figures?



3500


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## nomore4s (4 July 2008)

kennas said:


> 3500




3500

lol, been hanging around the bears too long Kennas?

My best guess down for this leg is 4900-4950, after that not too sure at this stage, depends a bit on the next rally imo.


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## Snakey (4 July 2008)

The red line top 
The dark blue line bottom
The green line 50%(should settle back to here at least)
The yellow line worst case bottom( panic over shoot of half way point)


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## Trembling Hand (4 July 2008)

Some time this morning we will get a low for this leg down.


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## Sean K (4 July 2008)

Snakey said:


> The red line top
> The dark blue line bottom
> The green line 50%(should settle back to here at least)
> The yellow line worst case bottom( panic over shoot of half way point)



Snakey, need to do that on a semi log scale for reference.


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## gfresh (4 July 2008)

4000 in the next 12 months, maybe within the next 6 .. 10,000 on the Dow Jones also seems a given during that time.  

Little positive sentiment left, no safe sectors now, no chance of a quick recovery.


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## CAB SAV (4 July 2008)

4392


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## Snakey (4 July 2008)

kennas said:


> Snakey, need to do that on a semi log scale for reference.




As being a Jack of all trades and a master of one (not charting). I have no idea what your talking about  but I think I know what you mean

Care to give yours on a "semi log scale" for future reference? Or post reference link?


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## Sean K (4 July 2008)

Snakey said:


> As being a Jack of all trades and a master of one (not charting). I have no idea what your talking about  but I think I know what you mean
> 
> Care to give yours on a "semi log scale" for future reference? Or post reference link?



Scale that takes into consideration inflation.

For eg,

It's like comparing the price of an apple in the year 1900 to 2000.

And, I do not have one.....


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## doctorj (4 July 2008)

Personally, I reckon we're a fair way off the bottom in equity markets - the chart below represents the Dow Jones Index and the Volatility Index (VIX)...  excuse the bad scaling, I had to use Yahoo Charts to get it.

What it does show is that significant bottoms tend to be put in place when the VIX is pushing 30.  Right now it's just shy of 25, so I think there's a way to go yet. 

Why is the VIX relevent for picking bottoms?  The VIX represents movements in the premium paid by purchasing puts for protection in a downward market - bottoms tend to be put in when there is irrational fear and people/institutions want out at any price.  Until we get that spike of fear, I don't think we've got a bottom.


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## dhukka (4 July 2008)

I'm sticking with previous forecasts of between 3400 - 3800.


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## wayneL (4 July 2008)

doctorj said:


> Personally, I reckon we're a fair way off the bottom in equity markets - the chart below represents the Dow Jones Index and the Volatility Index (VIX)...  excuse the bad scaling, I had to use Yahoo Charts to get it.
> 
> What it does show is that significant bottoms tend to be put in place when the VIX is pushing 30.  Right now it's just shy of 25, so I think there's a way to go yet.
> 
> Why is the VIX relevent for picking bottoms?  The VIX represents movements in the premium paid by purchasing puts for protection in a downward market - bottoms tend to be put in when there is irrational fear and people/institutions want out at any price.  Until we get that spike of fear, I don't think we've got a bottom.




Yup...

...and got up into the 40s in 01 and 02.

So plenty of panic is possible before a capitulation low.


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## Sean K (4 July 2008)

wayneL said:


> Yup...
> 
> ...and got up into the 40s in 01 and 02.
> 
> So plenty of panic is possible before a capitulation low.



But, 

There doesn't have to be panic.

Does there?

Why not a controlled adjustment?

So far, the correction looks controlled and managed by the powers to be and us punters...

The irrational capitulation doesn't have to happen...

Or it does?

eeeeeek


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## doctorj (4 July 2008)

kennas said:


> So far, the correction looks controlled and managed by the powers to be and us punters...



Or dangling the carrot of hope to allow the big players an orderly exit before letting the great unwashed know that the game is up.


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## Whiskers (4 July 2008)

kennas said:


> But,
> 
> There doesn't have to be panic.
> 
> ...




It's those oil speculators this time, I tell you... those mega funds manipulating the market. :


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## explod (4 July 2008)

doctorj said:


> Or dangling the carrot of hope to allow the big players an orderly exit before letting the great unwashed know that the game is up.




Yeh, Michael Heffernan on 3AW this morning was very bullish on the market and also said interest rates should not have been put up and will probably return to 5 or 6%.     So if you are a follower of Heffernan you know to look out below.   

Like the old Telstra 2, it was all about helping the smart money out; and when you suffer a loss you learn the lessons well.


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## Sean K (4 July 2008)

Geeez,

Do the manipulators have the power to contol our market?

4800 has been my bottom for some time.

Don't know why.

Nice number.

I think I wore 48 once,,,


The **** looks to be 3500 though.

I have a few coins laying about for that possibility.


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## wayneL (4 July 2008)

kennas said:


> But,
> 
> There doesn't have to be panic.
> 
> ...




That's always been what I think is most probable this time around..

... a re-run of the 70's.

Buuuuuuuut... the speed at which things have turned to sh!te over here has left even me aghast.

I'm not ruling anything in or out. And I have turned very timid about my short term downside exposure.


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## explod (4 July 2008)

The 1929 crash was only part of it, the market continued to tank in steps for years from that point.

The real bottom line on higher food, oil and debt has not hit the government figures yet.  Things will look very bad in the next year or two when they do.  The jawboning cannot hide the truth indefinately.


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## wayneL (4 July 2008)

explod said:


> The jawboning cannot hide the truth indefinately.




My observation is that more and more sheeple are turning into people and are questioning the nonsense they are dished out by the gu'mint and the medja...

...and actually thinking for themselves. The conclusions are almost unanimous.


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## Sean K (4 July 2008)

wayneL said:


> That's always been what I think is most probable this time around..
> 
> ... a re-run of the 70's.
> 
> ...




There has already been lots of panick.

Are we forgetting that we've already dropped xx % in xx days?

Worst June since 1940, worst year since ?? eeeeek! Or whatever..

If the market we have created works, then we are going to see some great long term opportunities eventuate shortly. 

Or longly....



Or, maybe capitalism doesn't work..


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## Speewha (4 July 2008)

Hello

There is a whole lot of bottom talk on ASF. At least two threads and lots of comments. Which is a good indication of where we seem to be heading and where we might end up 

Anybody know the ASX code for a good toilet roll manufacture.

I know we used to have Bowater Scott but I think they bottomed out years ago. 

Regards


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## juw177 (4 July 2008)

Hey guys the bottom IS IN ALREADY!!!
aord will go back to 6000 by end of year.


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## doctorj (4 July 2008)

juw177 said:


> Hey guys the bottom IS IN ALREADY!!!
> aord will go back to 6000 by end of year.



That's very reassuring - I'll be going 100% long now.  Thanks!


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## Speewha (4 July 2008)

Hello,

JUW177 You are an endangered species an optimist ! Good to see there is one left.  
Regards


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## grace (4 July 2008)

juw177 said:


> Hey guys the bottom IS IN ALREADY!!!
> aord will go back to 6000 by end of year.




I'm glad you're confident.  I'm not.  Bottems always feel like, you are falling and falling and falling and there is no bottem.  That's when finally the bottem forms. It makes you feel a bit sick in the stomach.  That's when you need courage to buy!  I haven't felt that yet.  Not this time anyway.  We need one of those days.  The sooner the better!


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## Broadway (4 July 2008)

The usd seems to be doing exactly what it did in mid-jan and mid-march.

This may not be the low of year but we may get a break for a while.

It would be nicer if vix peaked, but does it have too?


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## korrupt_1 (4 July 2008)

Another reversal candle?

This latest one is alittle more positive than the one made early this weekk.

Did we just see the bottom of this current leg down?

Fingers crossed... Aussie markets can't be that bad to justify further downward pressure????


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## juw177 (4 July 2008)

US holidays are know to have a bullish bias worldwide, with low volume.


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## MichaelD (4 July 2008)

I'll stick my neck on the chopping block and declare the bottoming process to have gone as low as it's going to. What the heck, 'tis a fun game.

Why?
 - there has been a blow off - yesterday (as requested by WayneL) - a good shake-out of all those in resources.
 - the mainstream news has officially declared it a bear market.


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## Sean K (4 July 2008)

MichaelD said:


> I'll stick my neck on the chopping block and declare the bottoming process to have gone as low as it's going to. What the heck, 'tis a fun game.
> 
> Why?
> - there has been a blow off - yesterday (as requested by WayneL) - a good shake-out of all those in resources.
> - the mainstream news has officially declared it a bear market.




Sorry Michael, are you calling a bottom, or what?)


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## explod (4 July 2008)

MichaelD said:


> I'll stick my neck on the chopping block and declare the bottoming process to have gone as low as it's going to. What the heck, 'tis a fun game.




I would not stick it out, even if there was only a remote chance of a falling blade.

However I do often suffer foot and mouth on this forum so am no judge.


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## Speewha (4 July 2008)

Hello,

Bottoms that have blown off.. how low can it get !


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## korrupt_1 (4 July 2008)

MichaelD said:


> - the mainstream news has officially declared it a bear market.




Do you think it will stop going down now that it's a confirmed Bear market on the DOW?

I doubt it...

The confirmation may entice some bargain hunters to top up on oversold stocks and a much needed relief rally may start, but fundamentally its going to go lower...



> The Dow slipped into a bear market for the 12th time since 1962 yesterday, according to Westport, Connecticut-based research firm Birinyi Associates Inc. Prior declines averaged 29 percent and lasted 322 days, Birinyi data show. The biggest was a 45 percent drop over 694 days starting in January 1973.  http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aghpdCq8n9xo


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## Aussiejeff (4 July 2008)

korrupt_1 said:


> Do you think it will stop going down now that it's a confirmed Bear market on the DOW?
> 
> I doubt it...
> 
> The confirmation may entice some bargain hunters to top up on oversold stocks and a much needed relief rally may start, but fundamentally its going to go lower...




As of late, I would call it the *up, DOOWWNN, up, DOOWWN* syndrome.... 



AJ


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## roland (4 July 2008)

sort of more like up, down, down, down, up, down, down, down - now if I could just get a couple of ups before the next down, then I could dig myself a little out of my financial hole I'm in ...


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## Bushman (4 July 2008)

Aussiejeff said:


> As of late, I would call it the *up, DOOWWNN, up, DOOWWN* syndrome....
> 
> 
> 
> AJ




Wouldn't want to be your lady mate. 

I'm tipping the bottoms in for the next little while given it was a nice capitualtion yesterday. Will be a dead cat bounce when the US financials announce the next round of write downs later this week. Keep an eye on Israel vs Iran too. Could add another boost to the POO. 

In the longer run, who knows? Its round 9 in the Rumble in the Jungle and the bears have the upper hand. But if POO/commodities come off and property starts faltering, do investors return to equities?


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## ta2693 (4 July 2008)

An very old proverb.
when there are some companies whose cash or assets is more than their market cap, it is the time to buy.
When people on street are talking about shares, it is the time to sell.
I find some companies' cash position is above its market cap now. 
It is time to take a long position. I am 120% long.
The winter has come, the spring should not be far away.


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## Family_Guy (4 July 2008)

I couldn't care less if it falls a little more. I have got in on some very cheap buys, some go up the next day to make my small %age goal and i sell and move on. I have some dogs (read - most of them) and i have some that are just flat out going no where. I can't see a much bigger drop but i'm prepared and cashed up for it. All i know, is in the long run when the markets return, i'll be richer for the wait. Bring it!!



he says with fingers and toes crossed.


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## jersey10 (4 July 2008)

ta2693 said:


> An very old proverb.
> when there are some companies whose cash or assets is more than their market cap, it is the time to buy.
> When people on street are talking about shares, it is the time to sell.
> I find some companies' cash position is above its market cap now.
> ...




who?


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## ta2693 (4 July 2008)

jersey10 said:


> who?



Here are some. Their chart looks ugly. but the value is there.
below cash value IPR, CCI, for risk control reason I can not have more. My fund is limited.CFE a few days ago when the price is 65c. right now it is back. 
the market is very abnormal. I think we should start a thread for stock whose market cap below cash in hand?  ridiculous, I have never seen this happened before. it is illogical as well. 
I do not know whether it is the case in 1960s?


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## LittleMak (4 July 2008)

> I think we should start a thread for stock whose market cap below cash in hand?




I agree... if you have any more fire away or start a new thread 

Cheers

LM


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## kotim (4 July 2008)

Look at the market, if it tanks straite down then it ens up being oversold to quickly and we must see a fast run back up  If it is not a slingshot into the bottom then we must have a sideways period of accumulation if we are to have a bottom.

Anyways, people who talk about 3000 and 1929 are crackers.

Super money is forced into the market every payday now and it is a substantial amount of money.  Effectively it can only go into cash property or shares and we all know that the real earners are shares and property so they are the ways to go.

The major  funds are currently trading in the commoditeis arenas, at some point when they decide to pull out of their they will come back over the shares and when they do it must go up.

There is just oo much money(credit) continually being pumped into the markets these days to suffer humungus falls like 1929 and 1987 etc.  Those days are gone and will not happen like that again unless the protections put in place are removed to allow for such things.


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## MichaelD (4 July 2008)

kennas said:


> Sorry Michael, are you calling a bottom, or what?)



Everyone mainstream now expects the market to go lower. That's good enough for me to suggest that the vast bulk of the bottoming is done with and it is time for the smart money to go buying again from the punters now that prices are back at wholesale levels.

I should of course point out that declaring tops and bottoms has no effect whatsoever on my trading - it simply chugs along following plans. Remember, I don't believe there is any predictive value in FA or TA.

This is pure entertainment.


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## NotaDuck (5 July 2008)

Somehow I don't get excited by looking at forecasts from chicken footprints (charts). Why? Because chartists didn't stop prices falling when 911 happened. You could draw all over your charts and the market just ignored them with grin. "Sorry trend line, was I supposed to rest here and turn around?"

So what is the MAIN fundamental reason for the fall this time?   OIL!   OIL!   OIL! When ever OIL price stops increasing, the ALLORDS will stop falling ... NO BOTTOM in view!!!


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## Sean K (5 July 2008)

MichaelD said:


> I should of course point out that declaring tops and bottoms has no effect whatsoever on my trading - it simply chugs along following plans. Remember, I don't believe there is any predictive value in FA or TA.
> 
> This is pure entertainment.



Another Legend.


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## MRC & Co (5 July 2008)

lol, on a role lately eh Kennas!


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## Sean K (5 July 2008)

MRC & Co said:


> lol, on a role lately eh Kennas!



Nice change of avatar MRC. Put my $2 on black!


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## Trembling Hand (5 July 2008)

NotaDuck said:


> Somehow I don't get excited by looking at forecasts from chicken footprints (charts). Why? Because chartists didn't stop prices falling when 911 happened. You could draw all over your charts and the market just ignored them with grin. "Sorry trend line, was I supposed to rest here and turn around?"



What a silly Post!! It just shows there are still idiots who want something to be wrong even if they don't understand what the hell they are commenting on.


As for a preferred "chicken foot print" I have been thinking about what would be the Best scenario. If I could order something I would ask for an accumulation pattern rather than a "V" or "W" bottom. Something like the patterns below. It would give time for the SO strong shorts to orderly cover their positions.
Note the bottom pattern is actually the topping pattern from last year turned upside down.


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## WRONG'UN (6 July 2008)

Well said TH - you have a great website and I have learnt a lot from it.
NotaDuck - the following quote from John Carter in his "Mastering the Trade" interests me:
"Many day traders I talk to ask about the wisdom in swing trading. The biggest question I get involves the risk of being exposed to an overnight position. The most common question is, "What if there is another terrorist attack?" After trading the markets for nearly 20 years, there is one thing I am absolutely convinced of - there is always somebody who knows about the upcoming market move and this person is in the process of getting positioned for it. After the crash on 9/11, one of the ways the government tracked down terrorist cells was to look at all the brokerage accounts that showed heavy short selling in the weeks before the attack. This led to multiple arrests, as people who knew about the upcoming attacks had been shorting insurance companies and airlines aggressively." He goes on the describe the weakening technical picture in the market prior to 9/11, and then does the same for the Oct 19 crash of 1929.
Refer to charts as "chicken footprints" at your peril.  
Cheers, Wrong'un.


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## motorway (6 July 2008)

> As for a preferred "chicken foot print" I have been thinking about what would be the Best scenario. If I could order something I would ask for an accumulation pattern rather than a "V" or "W" bottom. Something like the patterns below. It would give time for the SO strong shorts to orderly cover their positions.
> Note the bottom pattern is actually the topping pattern from last year turned upside down.




refer to my post in the Mkt Ind Thread

tops look like tops because of HOPE
bottoms look like bottoms because of FEAR

A bottom is not a top "upside down"

But we did have a lot of fear already 

motorway


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## Trembling Hand (6 July 2008)

motorway said:


> refer to my post in the Mkt Ind Thread
> 
> tops look like tops because of HOPE
> bottoms look like bottoms because of FEAR
> ...




So motorway all bottoms are Vs are they? All bottoms are fear driven without accumulation????????

how do you explain the first bottoming pattern??


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## motorway (6 July 2008)

Trembling Hand said:


> So motorway all bottoms are Vs are they? All bottoms are fear driven without accumulation????????
> 
> how do you explain the first bottoming pattern??




By distinguishing  between the bottom
and the resumption of of an uptrend

before and after the "bottom"
there can be accumulation
sometimes for a long time
sometimes there might be nothing much  after the bottom

If I make a film of anything
eg walking 

and then play it backwards

It is not the same as the way real walking backwards is...

same with throwing a ball

played backwards it is not the same as really catching one

A top is different to a bottom

though that does not mean flipping charts
is very valuable

eg 

here is the top of CNP

it slid on hope for over a year

The chart is flipped
the breakout ( down ) was where the realization and fear
took hold

on a relative chart
the different dynamics are even more stark..

nothing is always or absolute
but fear is different to hope.

and tops and bottoms have been recognized as different

eg in P&F why are low pole reversals more reliable than high pole reversals

zones of fear and hope create different dynamics

eg why does the B%

bull or bear mkt spend most of the time above 50% compared to below

Hope can last and last ( till you go down with the ship )
Fear and Panic exhausts and is self limiting
It kills quick.



> the twig snaps and all hell breaks out
> and over the cliff we go




motorway


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## Trembling Hand (6 July 2008)

Motorway as usual lots of words but no answer to my question. The top chart I posted WAS an accumulation pattern that WAS a bottom. But of course that doesn't happen


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## motorway (6 July 2008)

> So motorway all bottoms are Vs are they? All bottoms are fear driven without accumulation????????



nothing is always or absolute


in other words NO
But 

The distinction between tops and bottoms
I find useful

and along the lines in my post

a useful point of departure
suggestive I would think

befores are not the mirror image of afters

accumulation is not the mirror of distribution

Fear is different to hope

and no doubt we could put a whole spectrum of emotions 
that  unfold in between.

eg what precedes hope ?
what follows fear ?

but that would take too many words

what ever way you capture opportunity
may you prosper 


I would also distinguish 

a base ,both,  in terms of time
but also work on the "figure chart"

time does stop
when hibernation
is in play
and NO work gets done

so how big is a base really ?

depends on how you measure those V bottoms
time or work


too many words 

motorway


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## subaru69 (6 July 2008)

This is all getting a bit complicated:

I'm sure this must fit in somewhere.

"Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering." - Yoda


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## Broadway (7 July 2008)

Thought I might continue this thread.

The question is - have we put in a bottom in the markets for a week or more?

Most said no, don't be stupid, look at oil.

Some said yes, my argument was because the USD has popped up. 

So, what's happened so far?

XAO still looks bad, but I put that down to lower BHP from lower copper and oil.
HSI looked good, 400 point rally this morning.
Nikkei managed 180 points up.
K200 managed 3 points up.
USD still climbing.
Globex ES up 5 points.
Oil down to 143.50 from 146.
Gold down to $925 from nearly $950.

These are, ofcourse, only hints of a mood change, what do others think?


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## Snakey (7 July 2008)

Broadway said:


> Thought I might continue this thread.
> 
> 
> 
> These are, ofcourse, only hints of a mood change, what do others think?



 I think the road down is going to be a slow and hard road. Probably will end in a ridiculously low spike somewhere in the next two to four months before rebounding sharply. a lot of cheap stocks now but i think fear will drive them lower. It will take a lot of time to shake out all the scaredy cats.
I just wish the market had a fast forward button so we could get to the good times a lot sooner. Don't see a bottom for this year yet.


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## MRC & Co (7 July 2008)

I personally, agree Broadway.

I think it is time for a short-term rally (will probably happen too with my inability to find any long set-ups and being overweight in shorts)!

On another note, I have been looking at quiet a lot of short set-ups lately and have seemed to notice accumulation taking place in many of them, with a heap of major charts approaching longer-term support on the daily.

Not to mention, the broader markets in the US are not looking so bad, in comparison to the DOW.

Another bounce coming over the next month or two, before it continues it's waves down to 4000 by mid next year.  That being said, this is traditionally a poor performing time of the year and of the month, as far as seasonality.  But in this kind of environment, does any of that matter?  It is a emotions boiling pot out there at the moment!


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## wavepicker (7 July 2008)

Despite our heated exchanges in the past, in this rare instance I agree!! Some interesting stats below:-

 The Dow was down 10.9% in June. We went back to January 1940 and found that the Dow has only had 9 other down months of more than 10% declines. As you can see from the table below, in 8 of the 9 instances, the Dow was higher 6 months later.  So a rally could be in the making soon, but IMO this will only be just that, a rally in a bear campaign


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## sassa (7 July 2008)

gfresh said:


> 4000 in the next 12 months, maybe within the next 6 .. 10,000 on the Dow Jones also seems a given during that time.
> 
> Little positive sentiment left, no safe sectors now, no chance of a quick recovery.




If these analysts are correct,there will be a few wrong prognostications by our contributors in this thread.



> uly 7 (Bloomberg) -- Deutsche Bank AG, Lehman Brothers Holdings Inc. and UBS AG say the Standard & Poor's 500 Index will gain the most in 26 years during this year's second half







> Strategists at Deutsche Bank, Lehman Brothers and UBS are the most bullish and expect the benchmark for American equities to climb to a record in the second half. Binky Chadha, Deutsche Bank's New York-based chief strategist, says the S&P 500 will end the year at 1,650, up 29 percent from June 30




http://www.bloomberg.com/apps/news?pid=20601087&sid=aTjWQbjpkpxk&refer=home


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