How Far Will The Market Fall?

[InsvestoBoy]

Barney
Are you suggesting that the FTSE and or the DAX have some sort of link with the SPI?
That the way they trade could affect the way the SPI trades?

Once the ASX shuts, SPI futs tend to track whatever index is open, no question about it

dark blue is SPI, light blue is DAX, orange is FTSE:


If you see big divergences on those charts, probably caused by currency fluctuation.

 

[tech/a]

Expensive close Barney.

Investor B

do your comparison over a period unlike this and tell me what you see.

 

[barney]

Expensive close Barney.

Investor B do your comparison over a period unlike this and tell me what you see.

Yeah certainly got smashed down as the Dow closed up shop but I'm too old to stay up all night anymore so the early close for me was and usually is the best option If I'd let it run I would have needed an 80 point trailing Stop in place just to stay in the trade

Re the comparison:- Daily correlations between the Ftse/Dax and SPI can be pretty random during trading hours on the SPI but the ducks definitely line up better after the SPI closes/re-opens. Time of day suits me better as well

 

[terryod8]

One of many possibilities. This classic will give us a "U" reversal.

View attachment 101190

Hi

How has the actual next couple of days compared to your chart?

I withdrew my money from our Managed Super and set up a SMSF. I'm wondering whether to enter the market, or wait a bit longer.

 

[tech/a]

Barney

If Im in a good move I have set a stop and Gone to bed
A good % of time I give back a very good profit as the stop is at B/E as soon
as I can get it there. That varies long and short ---- and timing.

But every now and again next morning is MAGIC! certainly of late.

In the past shutting up shop when Im done (usually an hr or so) was
by far the best and most profitable option.
But in these RARE times of Volatility and Prolonged Volatility holding with Minimal
risk is my choice.

 

[Dona Ferentes]

from being a "call the bottom of the falls" less than 2 weeks ago, some of the big money has changed direction. Previously

"Given the price drops and selling we've seen so far, I believe this is a good time to invest, although of course it may prove not (to) have been the best time. No one can argue that you should spend all your money today ... but equally, no one can argue that you shouldn't spend any. The more you want to garner potential gains and don't mind mark-to-market losses, the more you should invest here."

but now more like

..".the market prices of assets have responded to the events and outlook (in a very micro sense, I feel last week’s bounce reflected too much optimism, but that’s me). I would say assets were priced fairly on Friday for the optimistic case but didn’t give enough scope for the possibility of worsening news. Thus my reaction to all the above is to expect asset prices to decline. You may or may not feel there’s still time to increase defensiveness ahead of potentially negative developments. But the most important thing is to be ready to respond to and take advantage of declines."

https://www.oaktreecapital.com/docs/default-source/memos/which-way-now.pdf

 

[lindsayf]

Re Techa's post....that is my approach in this market as well. These trades will be big wins or breakeven.

 

[InsvestoBoy]

Investor B

do your comparison over a period unlike this and tell me what you see.

lol dude here is a thread from 2006 where you say this yourself:

https://www.aussiestockforums.com/posts/41841/ and two posts down from there is @wayneL saying the same thing.

Here's another post from Aug 2008 Broadway saying the same thing:
https://www.aussiestockforums.com/posts/325941/

Another post from Jul 2009 baxter saying the same thing:
https://www.aussiestockforums.com/t...-interactive-brokers.14075/page-4#post-467218

Everybody who watches knows, once the ASX is closed, SPI tends to track whatever big index is open.

 

[tech/a]

lol dude here is a thread from 2006 where you say this yourself:

https://www.aussiestockforums.com/posts/41841/ and two posts down from there is @wayneL saying the same thing.

Here's another post from Aug 2008 Broadway saying the same thing:
https://www.aussiestockforums.com/posts/325941/

Another post from Jul 2009 baxter saying the same thing:
https://www.aussiestockforums.com/t...-interactive-brokers.14075/page-4#post-467218

Everybody who watches knows, once the ASX is closed, SPI tends to track whatever big index is open.

ROFL Dude
Back then there was correlation.
This un coupled back around 2010 ish after the crash.

Certainly in a world event which brings everyone in the same line
all will couple up again.
ROLF Dude love your work!

 

[InsvestoBoy]

ROFL Dude
Back then there was correlation.
This un coupled back around 2010 ish after the crash.

Certainly in a world event which brings everyone in the same line
all will couple up again.
ROLF Dude love your work!

15 min charts from random days in Jan 2020, before the event, showing 6PM AUS until 10AM AUS
08 Jan



10 Jan


13 Jan


15 Jan



21 Jan


24 Jan

 

[finicky]

Robert Milliner of WHSP (SOL) in this interview just a couple of days ago is currently suggesting restraint with your cash:

"Hoard your powder and keep it dry. That’s the key message from billionaire Robert Millner, Chairman of Washington H Soul Pattinson (WHSP), for investors in response to COVID-19.

“If I can give a little bit of advice: I think everybody should keep as much cash as you have. Be patient and keep well.”

You can bet they're currently eyeing off buying prospects though. A couple of 'themes' interesting them:

Ready to pounce

Millner said that while asset valuations were racing away in 2019, largely unsupported by growth in company earnings, WHSP remained cautious, and has positioned itself to have the financial capacity to make new investments during a market correction.

He wouldn’t say if any particular sector of the market had piqued his interest, but mentioned the desire for “cash-generating businesses run by good people”.

In October 2019, WHSP formed a partnership with Provectus Care, an aged care and retirement living operator, to build and operate luxury independent living accommodation for retirees. The company has committed to fully fund the acquisition of its first site in NSW for $39 million.

“We’re very bullish on this market, particularly at the top end - there’s a drastic shortage of very good facilities. I think this is an area where we can go leaps and bounds and we’re very confident.”

In 2H19, the company also spent $100 million acquiring a portfolio of land and water-based agricultural assets across Australia. The portfolio produces a range of commodities including citrus, macadamias and cotton and is part of Millner’s view on Australia’s as a food source for the world.

Full article at:
https://www.livewiremarkets.com/wir...one-of-australia-s-most-experienced-investors

 

[InsvestoBoy]

Thanks @finicky, made me look up the SOL chart, they certainly have an interesting total return equity curve that I respect.

 

[peter2]

How has the actual next couple of days compared to your chart?

After I posted that diagram the market continued lower for many days. This rally is probably the automatic reaction (AR). The virus numbers in the US are getting worse as expected. It looks likely that our market may test the recent low as people realise that the lock down will be longer than first thought. There's no need to invest quickly. Hang on to your cash for now and research which companies you'll most likely invest in. Now or soon will be a good time to start to establish a profitable equity portfolio. I'd be thinking about growth rather than divs. I anticipate that many divs will be reduced or postponed for a while.

 

[tech/a]

Inv

There is certainly Divergence through all of the charts and there is certainly correlation.
If Im to use it as a predictive tool then I should be looking at the hard right edge of the page
at open for the SPI.
Again I see Correlation and divergence.
about 50/50 so no edge.

 

[InsvestoBoy]

Inv

There is certainly Divergence through all of the charts and there is certainly correlation.
If Im to use it as a predictive tool then I should be looking at the hard right edge of the page
at open for the SPI.
Again I see Correlation and divergence.
about 50/50 so no edge.

They are priced in different currencies.

 

[tech/a]

That doesn't Affect the Divergence!

Look at the hard right of 15/1 and 21/1
Divergence
24/1 Correlation.

15/1
2.15 approx Divergence FTSE.
Most of the rest Correlation.
Don't see an edge.
Can you show me what Im missing?

Take a look at now Dax is +170 and we are down 100
no tracking here

 

[kid hustlr]

T/A have ALWAYS enjoy your work but I firmly disagree with the concept of placing your stop at B/E.

Stops should be placed based on market analysis, not your P&L.

Apologies to nit pick the one thing i disagree with over the millions of things you have taught me

 

[tech/a]

That's OK you can disagree.

T/A has a life span and in short time frames that life span is
shorter and less effective than longer time frames.

I dont mind a tick or two loss or B/E.
If Im going to sleep and leave a trade on Im going to set a
stop at B/E even if 100 ticks + on my side.

No way am I setting a hard technical stop with a 30 tick spread
from B/E and going to sleep no matter how good it looks.

 

[Smurf1976]

Hopefully this rally can carry through to the 38.2 and 50% retracement range. 5700 could be looking acheivable with Hurst price projection of 5664

Just wondering if you have any thoughts on the market action since this post?

My thoughts are mixed - Oil's up, speculative things such as Bitcoin still going up but the ASX doesn't seem at all convincing. That's not based on analysis comparable to yours though, it's just an observation.

 

[InsvestoBoy]

Here's a bearish thought to start the week. I had two, but I can only remember one:

For decades now, every payday, 9.5% of the productive capacity of the working class is going into stocks and bonds, mostly Aussie ones. That's a bid for BHP, CBA, WOW, COL, WES, etc, every time someone gets paid.

Those bids are undoubtedly going to dry up in a big way regardless of Government stimulus.

At the same time the very same Super accounts where bids will be drying up will actually, in some cases, be sellers to get their "Super stimulus".

Aside from a loss of marginal bids from Super into the secondary market of existing securities, this is also going to mean Super funds aren't going to be "reaching for yield" on new deals without fresh cash coming in!

Cost of capital for businesses is going to go up. Listed firms will need to issue shares at lower prices. Unlisted firms will issue bonds at wider spreads.