Correction or crash?

[Julia]

....... sentiment is as important to shareprice as the fundamentals.

Yes. And right now the prevailing sentiment is fear and panic.

 

[Buffettology]

Yes. And right now the prevailing sentiment is fear and panic.

And long-term fundamentals are just as important as sentiment. One is short-term, one is long-term.

 

[bunyip]

Suffered huge losses on BHP and ZFX, I am going to prepare more cash and sit still til I find a good time to go back in.

Fung

Can you explain why you took huge losses on BHP and ZFX? I mean, if your stock is heading downhill in a big way, more than just the usual up and down gyrations that every stock makes, nobody is holding a gun to your head and forcing you to hang on to it. You can always sell out while your losses are within reasonable limits, rather than hang in there until you lose your shirt.
I see that you have 'beginner' under your name.....maybe that goes some way towards explaining your actions. But hell, I see experienced investors doing the same thing, folks who've been in the game for many years - a stock starts plunging and they wait until their loss is huge, then sell out.
I know one bloke who lost more than 150 grand in Pasminco by doing exactly that.
It just doesn't make any sense at all to me.

Not trying to have a go at you here mate, but really, unless you learn to keep losses under control then you're stacking the odds against yourself of ever reaping the full potential of the market.

As Donald Trump says..."Look after the downside - the upside will look after itself".

Bunyip

 

[dhukka]

Yes. And right now the prevailing sentiment is fear and panic.

Julia,

There is definitely fear around, however we are yet to see outright panic selling. The decline has been fairly orderly IMO. The VIX in the US was still under 30 last week (hit 35 in August 07).

 

[josjes]

only joking... really... :couch


Cheers
..........Kauri

Kauri, joking though is your comments, I think your chart prediction has 90% chance of fulfilling, esp. the timing. Are you still holding that prediction ?

 

[ithatheekret]

Crash , correction .......... looks more like to soon to be Collection .

 

[Kauri]

Kauri, joking though is your comments, I think your chart prediction has 90% chance of fulfilling, esp. the timing. Are you still holding that prediction ?

I just drew lines on the chart where I could firt them in.. no real prediction price or timewise... but... that won't stop me claiming it if she co-incidentally happens to follow my lines.
Cheers
.........Kauri

 

[stock_man]

Using a simple moving average line on the XAO chart to define golden and death crosses (50 and 200 day moving averages), it looks like we are approaching a death cross for sure. This is not including today's current 2.1% drop.

The last time the chart reflected a cross of the moving averages was back in 2003...

 

[Ken]

This appears more than a correction.

The selling is constant, and smells of fear

BHP dropping 50 cents in the last 10 minutes.

The Dow is going to get whacked tonight....

Capitulation of markets not far away.

 

[Gundini]

This appears more than a correction.

The selling is constant, and smells of fear

BHP dropping 50 cents in the last 10 minutes.

The Dow is going to get whacked tonight....

Capitulation of markets not far away.

No, the DOW is going to get whacked tomorrow night... Closed tonight.

 

[shaunm]

No, the DOW is going to get whacked tomorrow night... Closed tonight.

Perhaps that may be a small mercy given the finish today.
The futures were down from what I saw so perhaps we might move sideways tomorrow (I hope.)

 

[shaunm]

Fung

Can you explain why you took huge losses on BHP and ZFX? I mean, if your stock is heading downhill in a big way, more than just the usual up and down gyrations that every stock makes, nobody is holding a gun to your head and forcing you to hang on to it. You can always sell out while your losses are within reasonable limits, rather than hang in there until you lose your shirt.
I see that you have 'beginner' under your name.....maybe that goes some way towards explaining your actions. But hell, I see experienced investors doing the same thing, folks who've been in the game for many years - a stock starts plunging and they wait until their loss is huge, then sell out.
I know one bloke who lost more than 150 grand in Pasminco by doing exactly that.
It just doesn't make any sense at all to me.

Not trying to have a go at you here mate, but really, unless you learn to keep losses under control then you're stacking the odds against yourself of ever reaping the full potential of the market.

As Donald Trump says..."Look after the downside - the upside will look after itself".

Bunyip

Would you say 30% is a big loss or is that level still reasonable enough to cut out?

 

[surfingman]

Would you say 30% is a big loss or is that level still reasonable enough to cut out?

All depends on your outlook long term or short, it may come back some time in the future then again it may not? You can always buy back in if you sell.

If the support is broken tomorrow and closes below...... personally I will be staying out for quite a while longer (thats just my opinion though).

 

[Plugger]

Down 1242.3 points. Yesterday I would've said big correction. Today I say crash. It's only because it's been gradual that it doesn't seem extremely bad, but it is.
I call for the mercy rule!

 

[nomore4s]

A 100 point buy-back this afternoon and a 14% correction from Nov. top till now suggests we have hit the bottom. The smart investors get in at ground floor, many may have entered today

A bit early to be calling a bottom I would think.

While I think we will get some sort of rally in the next week or so I seriously doubt it will be the bottom or the last time we test the 5500-5700 area at the very least.
The bar from 18.12.07 has a lot of similarities to todays bar and look at the weak rally we had afterwards.

As soon as STC started calling for the bottom I should have known the a*** would fall out of the market :

 

[MS+Tradesim]

Average bear market decline is 33%. It fell about 22% in 01-02. But then that was largely contained to the tech wreck. This is a crisis of solvency across the US (and spreading to global) financial sector, including a meltdown in the US housing market, with fallout in the retail sector and if the bond insurers fail then we can expect this leg down to look less significant than the next.

We may see a rally but I'm calling @4800 for interim bottom (within the next few weeks or month) based on previous long-term support; maybe a pause at @5500 which was August exhaustion and is a previous support also . Too lazy to post a chart as I previously posted them in the XAO thread.

 

[wavepicker]

We may see a rally but I'm calling @4800

Would have to agree. If one assumes the whole advance from the crash of 87 to 2007 high, then a 38.2% correction(a typical wave 4 correction), then we should look for approx 4700-4800 for a low. Typically this would be a zigzag type pattern so then this move down now might be a wave A.

On the other hand if it's a 5 wave structure at last year peak(alternate count) then the correction would be yet further

 

[chops_a_must]

Average bear market decline is 33%. It fell about 22% in 01-02. But then that was largely contained to the tech wreck. This is a crisis of solvency across the US (and spreading to global) financial sector, including a meltdown in the US housing market, with fallout in the retail sector and if the bond insurers fail then we can expect this leg down to look less significant than the next.

We may see a rally but I'm calling @4800 for interim bottom (within the next few weeks or month) based on previous long-term support; maybe a pause at @5500 which was August exhaustion and is a previous support also . Too lazy to post a chart as I previously posted them in the XAO thread.

Wow... I had a 4200-4400 H&S target on the XAO ready to put up on the forums. But that was my eventual bottom target for the bear market!

Now it seems within in reach if things get really nasty.

 

[MS+Tradesim]

Wow... I had a 4200-4400 H&S target on the XAO ready to put up on the forums. But that was my eventual bottom target for the bear market!

Now it seems within in reach if things get really nasty.

Wouldn't surprise me Chops. I'm only thinking 4800 interim. If USA does turn nasty, well....splutch!

BTW, we didn't have that bad a day relatively speaking. India are about 7% down now and about two minutes ago they were down 8.88%. China down 5%. Hong Kong down 5.5%

EDIT: India currently -10.85% today!

 

[chops_a_must]

Wouldn't surprise me Chops. I'm only thinking 4800 interim. If USA does turn nasty, well....splutch!

BTW, we didn't have that bad a day relatively speaking. India are about 7% down now and about two minutes ago they were down 8.88%. China down 5%. Hong Kong down 5.5%

EDIT: India currently -10.85% today!

Was looking at all these Asian charts over the weekend. I thought... hmmm... they all look like stereotypical C wave correctives... (if you know anything about waves). Should perhaps have paid more attention to it. Ah well... lol!