ASX bounce a bluff

[Ken]

I bought when the all ords were 300 down and sold when they were 120 down.

I decided not to hold over night.

The US is expected to head sharply lower on thursday again.

If this is the case those who bought in on the bounce will be in for more sharp losses.

I dont see how all these stocks are going to recover. Chartwise a lot look very ugly smashing down supports.

We know that stocks that fall bounce.. which is what happened today, but over the trend is down right now.

If you're looking at investing for the long term, is it wise to let the market settle for some side ways action.

I cant see the market recovering all these losses over the space of a week, so there will be plenty of opportunity to pick up good stocks paying good dividends at cheaper prices.

There are no s- you would rather by a stock at $10 going up, than a stock at $10 going down.

If you dont believe in the powers of trend, please see the PGL stock which has gone from $10 to under $3.

If you believe in trend trading, theres a good book out that I am reading. Basically when a trend is set either sideways, down or up, the chances of a change in trend are like 5%.

PSD and PGL are prime examples.

This is probably why so many stocks like MCR, MMX, ZFX have gone untouched for so long. Not saying they want rebound but they are the stats in this book.

There are stocks that trade side ways.... there are stocks that trade down or up. Where is your portfolio headed?

good luck.

 

[UMike]

I'm inclined to agree.

I'm fully in, holding on and riding the ride.

So unlucky not to have sold half my CBH holdings a week ago.

why have the Commodities been hit soooo hard?

 

[CanOz]

why have the Commodities been hit soooo hard?

Any speculative element is being removed. This is good for commods as IMO it should be easier for some to predict price movements based on S/D...i could be off the mark here but it seems only common sense to me.

Cheers,

 

[Captain G]

I also fully agree. The commodities market is full of leverage/hedge and the loans are having to be called in / liquidated as they fall. In fact a very large part of all the share markets everywhere I feel have been over leveraged to the eye balls. That's why until this has been un-winded, then the bottom will begin to be found. Where that is, who knows !!!

 

[kerosam]

when experts say the australian economy's fundamental is still strong (referring to the resource sector i suppose... demand for metals from china & india etc), what do they actually mean?

e.g. resource companies borrow money for exploration, production & export. if financial lenders halt funds to these companies (making it more diffcult to borrow money) or interest rates start to creep into their bottom line, in my humble opinion, highly leveraged companies no matter how prospective it is, will get hit hard in this global crisis. and we are seeing this crisis from an international crisis to a national crisis.

i'm still bearish.

 

[shinobi346]

Not necessarily. Not all their money comes from borrowing from the bank. In fact I'd say a fairly large proportion of a resource companies funds comes from the investors and when they run out they issue more shares. Rinsing and repeating as they go until hopefully they can sell some stuff out of the ground and return some money to the investors or buy another company - another way that a company gets funds.

 

[bean]

why have the Commodities been hit soooo hard?

Several reasons
If the US is going to a recession.
For example the gold market...the market capitalisation of all the gold stocks is less that Microsoft!!!! you can see that some things/indicies are only small so volitility is great. You reap the rewards when market is going forward but feel the pain when it is not.

One thing you may learn out of this is gold!! a small narket but if people run for cover to bonds, US$ and they are not to crash hot. Its when the money goes into gold (thats when wave three starts in itss bull market)

 

[INORE]

Several reasons
If the US is going to a recession.
For example the gold market...the market capitalisation of all the gold stocks is less that Microsoft!!!! you can see that some things/indicies are only small so volitility is great. You reap the rewards when market is going forward but feel the pain when it is not.

One thing you may learn out of this is gold!! a small narket but if people run for cover to bonds, US$ and they are not to crash hot. Its when the money goes into gold (thats when wave three starts in itss bull market)

Hi Mr Bean

can u please explain what u mean by 'thats when wave three starts in its bull market'

cheers

 

[-merry]

Not necessarily. Not all their money comes from borrowing from the bank. In fact I'd say a fairly large proportion of a resource companies funds comes from the investors and when they run out they issue more shares. Rinsing and repeating as they go until hopefully they can sell some stuff out of the ground and return some money to the investors or buy another company - another way that a company gets funds.

yea, typically spec companies are not geared as they are already high risk and gearing will make it worse so much so that it may make it even harder for them to raise funds so instead of taking up loans, they go to the public and institutional investors for funds.

 

[Uncle Festivus]

Several reasons
If the US is going to a recession.
For example the gold market...the market capitalisation of all the gold stocks is less that Microsoft!!!! you can see that some things/indicies are only small so volitility is great. You reap the rewards when market is going forward but feel the pain when it is not.

One thing you may learn out of this is gold!! a small narket but if people run for cover to bonds, US$ and they are not to crash hot. Its when the money goes into gold (thats when wave three starts in itss bull market)

Hi Mr Bean

can u please explain what u mean by 'thats when wave three starts in its bull market'

cheers

One theory is that there are 3 phases to a bull or 'mania' - 1st is when the insiders & smarties take positions, the 2nd when the general investment community get on board, & the 3rd is when the general public eg taxi drivers etc create the manic, blow off phase (and those that got in at stage 1 are selling)

 

[insider]

It seems that the bounce is happening now... :jump:

 

[INORE]

One theory is that there are 3 phases to a bull or 'mania' - 1st is when the insiders & smarties take positions, the 2nd when the general investment community get on board, & the 3rd is when the general public eg taxi drivers etc create the manic, blow off phase (and those that got in at stage 1 are selling)

thanks UF

so is stage 3 of the bulls also stage 1 of the bears which may also be blurred as the stage 1 of the bulls again as the insiders & smarties take positions???

 

[powerkoala]

"Australian shares rose, fell and were back up in a seesaw session as worries about credit markets continued to hit financial shares such as National Australia Bank, while miners dropped on weaker metal prices. The Reserve Bank of Australia injected a larger-than-usual amount to the banking system during the morning session as it tried to temper upward pressure on some short-term market interest rates and meet liquidity requirements. In its regular daily money market operation, the RBA added A$3.87 billion (US$3.07 billion) in cash to the banking system, above a usual daily average of around A$1.8 billion"

taken from cnbc.
maybe this explain why ASX rebound?