Australian (ASX) Stock Market Forum

Imminent and severe market correction

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nikki said:
:

i noticed that the rally of the S&P last night did not go above previous highs even in intraday trades. any chartists out there - is that a bearish signal.
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This may help understand why there will be no bear market(courtesy GRG55 at iTulip).
weak data = Fed ease, stocks rally
consensus data = lower volatility, stocks rally
strong data = economy strengthening, stocks rally
bank loses $4bln = bad news out of the way, stocks rally
oil spikes = great for energy companies, stocks rally
oil drops = great for the consumer, stocks rally
dollar plunges = great for multinationals, stocks rally
dollar spikes = lowers inflation, stocks rally
inflation spikes = will inflate all assets, stocks rally
inflation drops = improves earnings quality, stocks rally
 
Thats gold sassa, and about spot on....it's all about perception...and as you just demonstrated...it can be spun any which way and whilst the catch-phrase of the decade continues to be 'not on my damn shift!', money in the market is as safe as houses....did I just say that?? :eek:
 
nikki said:
:confused: i was watching the massive drop in the DJIA the other night (morning??) as well - the European central bank governor (or one of them) gave a speech suggesting that the US re European rates needing to go up.

apparently the market interpreted that as a signal to the US federal reserve that they should not drop rates.

most interesting for me about that drop was that resources stayed strong!!

i noticed that the rally of the S&P last night did not go above previous highs even in intraday trades. any chartists out there - is that a bearish signal.
Click to expand...

This article is from a BEAR read!!! Not in this arcticle but a previous one it the DOW can make 15100. Google US$662 (at least) currently $630 its current P/E 54
it looks as though everything is going to rise. Bubbles galore when it ends is a guess but it will end badly however one has to invest capital so as not to miss any gains but one must also take some gains of the table along the way.

http://news.goldseek.com/RickAckerman/1192372800.php
 
bean said:
Bubbles galore when it ends is a guess but it will end badly however one has to invest capital so as not to miss any gains but one must also take some gains of the table along the way.
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Yes, I definitely agree to that. I'm holding very few shares long at the moment, just mostly doing day trades here and there.
 
can anyone help with this query? someone tells me that the rally and drops last week in the DJIA and the S&P were done on really low volumes and that most institutional investors are still on the sidelines.

does this mean anything? can anyone compare this to what it might have looked like in the past years in october of the 1st quarter for the S&P and the DJIA. apparently 12 out of the past 13 1st quarters have been very good for the S&P. unfortunately, i do not have the know-how to figure out the answers to my questions:mad:

i am trying to decide whether to exit a few trades this week but need more evidence so i can be factual about my choice!! any help would be great????:rolleyes:

all this reflection on the 1987 crash is giving me headaches :banghead:
 
Wysiwyg said:
There is no doubt about a correction.I have seen it.

While shopping this evening I observed this beautiful lady with slender legs, ponytailed hair and bright smile.I looked down toward my feet and noticed a massive correction, the likes of which brought a smile to my face and knowingness that all in the world is as it should be.:D
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Great Scott.Did you race straight home or was the missus with you?
 
sassa said:
I've said it before and I'll say it again,"Wallstreeters have no overseeing authority as to how to value their financial instruments."Poor results can be posted as big profits.Now,if this report has substance,then the market has been led astray.
http://money.cnn.com/2007/10/14/news/companies/goldmanearns.fortune/index.htm
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Wow, you would think that after Enron and the introduction of Sarbanes Oxley they wouldn't dare to be that creative with their derivatives accounting. :eek: It will be interesting to see what their external auditors think of this...
 
rub92me said:
It will be interesting to see what their external auditors think of this...
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They have the option of letting things go, and hope they trade out of any problems, or just send the companies to the wall, and lose the revenue from possibly a very large client.
 
sassa said:
I've said it before and I'll say it again,"Wallstreeters have no overseeing authority as to how to value their financial instruments."
And have a read of this from Martin Hutchinson-
Goldman Sachs, for example, reported this week that the “Level 3” assets in its books, those for which liquidity is lowest and valuation most difficult, had jumped by a third in the quarter to $72.05 billion. These “Level 3” assets presumably don’t include Goldman’s multi-billion dollar holding of the Industrial and Commercial Bank of China, quoted daily on a stock exchange, however over-inflated its share price and illiquid its trading market. Instead, they appear to represent mostly derivatives and securitization assets linked distantly to mortgage loans and leveraged buyout deals, whose valuation is carried out by the operating unit itself, based on the price at which it would have to sell the asset to preserve its bonus pool from unexpected losses.
Set against Goldman’s capital of $36 billion, that $72 billion is a frightening figure. At some point, probably in a downturn, the real value of those “Level 3” assets will have to be recognized. No doubt the resulting losses will be written off against capital but even Goldman’s brilliant and gloriously paid accountants will find it difficult to write off $72 billion of losses against $36 billion of capital.
Corporate profits are Wall Street’s main justification for the current over-inflated level of the US stock market; they have been increasing in every quarter since 2002 and are held to justify an S&P500 earnings multiple of “only” 18. However, Thomson Financial reported Thursday that third quarter earnings, those currently being reported, were likely to come in fractionally below second quarter earnings, for the first time since 2002.
If that prediction is fulfilled, and we have now passed the peak of earnings in this cycle, then unexpected losses and the need to return corporate accounting to a reasonably conservative basis will make the downward slope in earnings long and steep, so that even if 18 times earnings were an appropriate level, it would imply a massive drop in the stock market. Such a drop in the stock market, particularly if accompanied by an inflation-caused drop in bond markets, will decimate Wall Street’s profits, throwing overpaid bankers out of work and further pressuring consumer spending. It is a vicious circle, spiraling ever more rapidly into an almost (but not quite) bottomless pit.
It might be time to speculate in a few long term put options – or move your money overseas, but where?
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Ok can somebody please explain why the XJO is up this morning.

Got stopped out of a short last week.

Sat on the fence for the last 2 days getting splinters in my butt, and Dow was down again last night, but as soon as I go short again the damn thing goes up. :banghead:
 
low volumes - the bears are obviously watching!! everyone else in asia is down?

the DJIA, S7P and Nasdaq futures are favouring a very good open tonight!! maybe traders are reading too much into that:confused::confused:
 
nikki said:
low volumes - the bears are obviously watching!! everyone else in asia is down?

the DJIA, S7P and Nasdaq futures are favouring a very good open tonight!! maybe traders are reading too much into that:confused::confused:
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Low volume isn't necessarily a bad thing.It can mean that there is no supply at the lower prices, as well as no demand.

The Dow was only down 0.5%, and off it's lows, so today was never going to be a big down day.
 
nikki said:
the DJIA, S7P and Nasdaq futures are favouring a very good open tonight!! maybe traders are reading too much into that:confused::confused:
Click to expand...

These figures can turn rapidly.Some very important info coming out tonight with the MBA(applications at mortgage lenders),housing starts for September,CPI(pre market consensus of 0.2%),EIA petroleum inventories report and the Beige Book(which will give an indication of of the likelihood of a further interest rate cut).
You would think that on current economic data flowing from the U.S.A.,a moderate rise in the Dow could only be possible.
 
The whole of Asia is down, so if the XJO doesn't finish down today, now that I have gone short, I can only conlude that it's something personal and it just doesn't like me :D;)
 
dubiousinfo said:
The whole of Asia is down, so if the XJO doesn't finish down today, now that I have gone short, I can only conlude that it's something personal and it just doesn't like me :D;)
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DubiousInfo...

Today seem to have respected the overall trend down since Oct11, confirmed by earlier touch of 6760.

SevenFX
 
dj_420 said:
Trouble stirring??? I personally think we are near to another top, the market has run very very hard since that smallish correction. Are we due for more red?

http://in.biz.yahoo.com/071017/137/6m18n.html
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DJ.

The rest of the (DOW, DAX, FTSE, HS) markets haven't seemed to change a whole lot, so why do you think the Indian market will lead????

Though the SPI has traded down since the 11Oct...????

Thanks
SevenFX
 

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