Correction or crash?

[bunyip]

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

A 30% loss would horrify me, but then I probably have a shorter term horizon, and therefore a lower loss tolerance, than most people on this forum.

For anyone who wants to invest from a longer term perspective but isn't willing to hang on to stocks while they plunge south and lose most of their value, you could do worse than study Stan Weinstein's 'SECRETS FOR PROFITING IN BULL AND BEAR MARKETS'.
Stan has an approach that gets you into strongly trending stocks shortly after they begin trending and keeps you in them as long as their trend continues, which could be years in some cases. But the real strength of his strategy is that it steers you clear of a situation where you make big gains but then end up giving it all back to the market. Or worse still, watching your big gain turn into a big loss.
Even if you don't have a big gain, the damage control component of his system ensures that you'll never suffer account-crippling losses.

Bunyip

 

[Gundini]

I know, a little off topic, but here are a couple of comments made by astute contributors IMO. Maybe stock market traders, but experience none the less.

The all ords should be around 5,200. On average over the past 20+years it grows at 7%, and when it deviates from this, it always comes back. It went 30% too high. Anyone not expecting this correction was in fantasy land. The Australian economy is still strong, and as long as the government doesn't upset things, we may see strength return to the market. I pulled out a few months ago at the peak, but may go back in now.
Posted by: RJ of Sydney 4:20pm today
Comment 13 of 13


About time the market became cheaper, my patience was worn through nearly waiting for some discounts. But it seems there may be some bear trap stocks out there to be weary of. Not all things are cheap for nothing. Also one finds the best bargins when the market psychology is most fearful, and the cause of this is the potential recession in the USA (according to data and yeild curve differentials) .The recession wont cause a downfall in prices, fear of the recession will. One may find acual news about the recession, will make way for a relief rally, once people know how bad things actually are.
Posted by: jason of Brissy 3:35pm today
Comment 12 of 1

More comments here:

http://www.news.com.au/comments/0,23600,23083242-462,00.html

 

[wayneL]

Holy F#$%!!!

A lot of action on the Indicies for a US holiday monday.

SYCOM been as low as 5452

SP futs down 50 POINTS

Dow down ~400 POINTS

 

[wayneL]

Eurostoxx down > 5%

 

[korrupt_1]

This is it people!!! The END IS HERE!!!!!!!!!!

Ok, serriously... SPI Future is bouncing around 5450's.... on a Technicals, where is the next major support????

 

[nioka]

This is it people!!! The END IS HERE!!!!!!!!!!

Ok, serriously... SPI Future is bouncing around 5450's.... on a Technicals, where is the next major support????

The support will not be major. The fall has been gradual and is being kept alive by the usual lemming run and prodded by margin calls. The recovery will be steady helped along by the superfund money needing to find a home and prodded along by day traders. I intend to put in some orders tomorrow as I can see some bargains. In a very minor way the market will get some support from me now, how many there are like me I don't know but I believe a lot of little people will make the turnaround happen. To me the technicals are clouded by the fact that this time things are different. Booming trade, possibly the end of the drought, China and India plus a steady stream of super funds will help to stabilise things quicker than in the past.

 

[nizar]

I pulled out a few months ago at the peak, but may go back in now.
Posted by: RJ of Sydney 4:20pm today

Sold the top..! What an absolute champion!!
Now watch him pick the bottom

 

[numbercruncher]

Finish below 5462 tomorrow which seems certain and we fit the official definition of being in a bear market 20pc off the Nov 1 High of 6828.

 

[Gundini]

Sold the top..! What an absolute champion!!
Now watch him pick the bottom

Roflmao...

Really though, we shouldn't be laughing in times like this. I feel for those caught up in this mess. I know.... I remember a time when I couldn't sleep.

 

[numbercruncher]

I truly feel for those who listened to the vocal, bleeting, uninformed perma-bulls and borrowed (or "leveraged" as they like to call it) long into this mess

 

[BentRod]

Geez almost time to get long with all the bears around here...lol

SYCOM been as low as 5452

SP futs down 50 POINTS

Dow down ~400 POINTS

Wow, lucky it's a holiday over there!

 

[Gundini]

Looking to take a breather the index futures, maybe not the "big one"

 

[Awesomandy]

Now, that looks kinda bounced. It's back up to where it was around 90 mins ago. Hopefully, I haven't jinxed it. I've had completely rotten luck trying to pick anything in the past few days (and it's not just the stock markets I'm talking about).

 

[lesm]

Eurostoxx down > 5%

The DAX isn't fairing any better.

Fair amount of red on FX tonight as well.

 

[Bushman]

I truly feel for those who listened to the vocal, bleeting, uninformed perma-bulls and borrowed (or "leveraged" as they like to call it) long into this mess

No need to feel sorry for anyone. You now have a new generation of investors who understand the word 'risk', 'gearing' and 'leverage'. Also everyone will also understand that it takes time to undwind the mess and that the information flow will be poor. Good lessons for the future.

I do take some umbrage at the word 'uninformed'. A shift in the balance of economic power from the first world to the emerging economies will be a longer trend than the unwinding of sub prime. What the bulls did (myself included) was take their eye off the ball on the domestic front!

 

[lesm]

No need to feel sorry for anyone. You now have a new generation of investors who understand the word 'risk', 'gearing' and 'leverage'. Also everyone will also understand that it takes time to undwind the mess and that the information flow will be poor. Good lessons for the future.

I do take some umbrage at the word 'uninformed'. A shift in the balance of economic power from the first world to the emerging economies will be a longer trend than the unwinding of sub prime. What the bulls did (myself included) was take their eye off the ball on the domestic front!

Would further suggest that some players took their eyes off macro-economics and events unfolding at that level, as they were probably too busy focussing on aspects, such as chindia and the resource boom. Failing to consider that the prevailing bull market of the time may eventually complete its natural cycle.

A number will have only experienced the recent bull market and have never experienced a real crash or bear market or even choppy markets.

Indeed, there are many lessons to be learned from the current situation. A number may now have risk and money management principles reinforced, especially those using leveraging or margin accounts.

The markets are not for the foolhardy and they will tame the greedy, one way or another.

Cheers.

 

[CanOz]

Hi Everybody!

Its very difficult for me to reply, since this site is banned here, but i got a good proxy server tonite. I just thought i would drop in and say hi and hope everyone is in cash, short, hedged, or all three!

Been busy writing and testing new trading plans and so i've been too lucky to be in cash for the last 2 months....thats the only good luck i've had the past 12 months!

Thats quite a bloodbath tonite, perhaps made a little worse by illiquid US futures. One thing i noticed though is that almost all Asian currencies are up, well up. Could be that assets overseas are being sold and the funds being changed back into the local Asian markers by really risk averse Asians...is this something to worry about?

Anyone want to say hello please do at CanOz@gmail.com

I really miss you guys, WayneL, Lesm, Nizar, TechA, Kauri, Nick, Prof and all the rest of you...you all taught me so much over the last two years.

Take care, and stop by to say helloooo!

Cheers,


CanOz.

 

[wayneL]

Hi Everybody!

Its very difficult for me to reply, since this site is banned here, but i got a good proxy server tonite.

I was wondering where you'd got to CanOz. Banned you say? Why would that be?

 

[lesm]

Hi Can,

Banned...now understand why you have been scarce of late, only popping up every now and then.

Will send an email over the next couple of days.

Will send you a link or two that may help with your interest is FX related stats.

Mainly trading indices and FX nowadays.

Cheers.

 

[CanOz]

Hi Guys, i'm guessing that because this site is a public forum, and i frequently accessed it. I can post on other forums but i've only recently started this. Blogs are definatly out of the question unless a proxy is used.

Now is a great time to be trading FOREX, so i've been testing a new system based on the book Bird Watching in Lion Country. Low leverage, reversion to mean, simple with a bit of fundementals. What a fantastic time to be in the markets, soaking this up!

Keen to add more edges with seasonals and or stats....thanks Les!

Also, Wayne you would be proud to know that i'm currently studying options too with a view to developing a commodity futures option trading plan. I'm finding this very challenging.

And as Nizar knows i'm still dabbling in mechanical systems too...although i have little time left for this right now.

Good trading everyone.

Going on Holidays soon for Chinese New Year, take care Y'All!

CanOz