Imminent and severe market correction

[nizar]

It doesnt really bother me if we have a correction or not.
I have stops in place, if they are hit, i exit with a loss.
Iv got profit taking exits in place, if they hit, then i exit with a profit.
If neither than i hold.
Simple really.

Id rather not get involved with prediction.
Ill leave that to the analysts, who make money from their analysis and not their trading (i got that quote from michael but i must admit its gold).

 

[2020hindsight]

...... (d) everyone calls for a Crash and it does not happen like it has over and over again for the last XX years no one takes them seriously (one day they might be right)
(e) we have to watch China that where the correction will start.
(f) we a lemmings true/false
To the bulls good luck to The bears good luck
to those that think and know , we don't need any

Yep, more interesting comments, bean.
d) the boy that cried "bear" - so far it has usually only been a little koala correction - one day this bludy great grizzley will come charging over the hill, lol.
e) China will initiate the correction - you might be right. Would post-olympics withdrawal be a possible trigger maybe? Maybe when the effect of greenhouse emissions start to bite, and the financial world is forced to slow down, who knows.
f) Interesting analogy to lemmings - like the old dilemna, do you subscribe to
"buy on bad news , sell on good" ; or "the trend is your friend" .
I never know which one to follow lol.
Finally I agree with you in wishing everyone (lemmings and loners alike) best of luck.
(and even brave dude traders like nizar lol)

PS No way do I use stops. My biggest mistakes have always been to sell on a small correction when I should have held and weathered the storm . . I swear the manipulators of the markets know just how far to drop the price to trigger those stops, then they make a killing - (and I don't have time to monitor the market full-time during the day). Just another conspiracy theory I hold. (Apologies gents, comments from the peanut gallery here - back to you experts - "over and out" on this one lol

 

[Freeballinginawetsuit]

20/20,

Sorry but I was under the impression that you had exited the market back in March and were watching from the sidelines. If memory serves me correctly?.

I had know idea you maintained youre longs and took the opportunity to trade what was in front of you.

Hope you continue to do well!.

 

[Kimosabi]

I'm sure that while the inexperienced investor is Selling in May and going away, the smart money is Buying in May and staying to Play...

 

[nizar]

Finally I agree with you in wishing everyone (lemmings and loners alike) best of luck.
(and even brave dude traders like nizar lol)

PS No way do I use stops. My biggest mistakes have always been to sell on a small correction when I should have held and weathered the storm . . I swear the manipulators of the markets know just how far to drop the price to trigger those stops, then they make a killing - (and I don't have time to monitor the market full-time during the day). Just another conspiracy theory I hold. (Apologies gents, comments from the peanut gallery here - back to you experts - "over and out" on this one lol

2020.

Just some advice from my experience. Use loose stops, give them some room to move (i give them plenty) and let them run. I thought i was a champion doing a nice quick trade on WMT bought i think 6 and sold 7.4, trying to be a bullmarket daytrader, and now its 40c. If i had put a stop at maybe 5c then i couldve rode the whole trend.

Iv decided i want to go for big profits now, not quick profits.

Also i dont put my stops in market anymore, but instead use end of day stops. For example, i bought AED today. Stop if it closes at or below $4.70. Stop is pretty far from the price action. I actually did buy WMT as well at 40c. Stop is if it closes at or below 29c. Loose stops mean you buy less shares though. But that does mean you will have cash to top up on pullbacks (after the bounce, of course)

Just my opinion.

 

[chops_a_must]

I swear the manipulators of the markets know just how far to drop the price to trigger those stops, then they make a killing - (and I don't have time to monitor the market full-time during the day). Just another conspiracy theory I hold. (Apologies gents, comments from the peanut gallery here - back to you experts - "over and out" on this one lol

Oh my word they do. If you read the Market Wizards books, they tell you they aim for badly placed stops. I think it is more prevalent in professional trading arenas like currencies and so forth, but no doubt it happens in equities as well. I've noticed it tends to happen with stocks on the run, and if you are stopped out there, then you need to change the strategy for next time I guess.

But really... personally, I'm very happy with my returns for this year already, and if we are to see a correction, in the big scheme of things, I'll still be ahead in my mind. We are due for some kind of correction soon no doubt, may be a few weeks away. Who knows, who cares in the scheme of things? Don't think it will be a crash... but if there is one starting, I'm sure I'll be stopped out in the first hour on everything one day, and still be able to preserve capital, which is more than a lot of people on here I guess... And then we can go back to investing like people did when it wasn't trending, hunting dividend yield.

 

[bean]

HINDSIGHT unfortuately I think a crash/sevre correct starts next thursday at latest
and everyone looking at china when it is actually the US.
But I could be wrong but time wil tell

 

[2020hindsight]

20/20, Sorry but I was under the impression that you had exited the market back in March and were watching from the sidelines. If memory serves me correctly?.

I had know idea you maintained youre longs and took the opportunity to trade what was in front of you.

Hope you continue to do well!.

freeball, I'll tell you the full story, lol.
After the cyclone I got out of FMG thinking it would have a plateau for a while. You suggested buying something with a bit more of an afro "for the shearing", lol - so I took your advice and looked around - followed Young Trader's suggestion to buy YML - went up 25% the other day, and I got out .

So indirectly I have you to thank
Although getting back into my original FMG would have been ok as well. lol.

I love it when you can screw up and still win - so much kinder than betting on the horses.

and chops , nizar , bean - well done for "keeping the faith" through the fog of financial war.

fortes fortunes aduvaat , or whatever , " fortune favours the brave" lol. -
I think Julius Caesar was thinking of the stock market when he said that lol. ( or was it someone else, ? who knows, who cares? - as long as we don;t lose our shirts, lol)

PS money is of no consequence - unless you have none

mmm bean , you predict Thursday the 10th May.
could be right - then again, could be case of "thor-deka-may-probia ". lol

(PS. hard to imagine that the USA can continue to throw money at Iraq and Afghanistan at the present rate for ever, yes?)

 

[Freeballinginawetsuit]

freeball, I'll tell you the full story, lol.
After the cyclone I got out of FMG thinking it would have a plateau for a while. You suggested buying something with a bit more of an afro "for the shearing", lol - so I took your advice and looked around - followed Young Trader's suggestion to buy YML - went up 25% the other day, and I got out .

lol, yeah well I was probably talking about letting youre longs grow before cutting them and trading the spikes on the ones youd been following for a while, but were toppy prior .

YML would have been one of the last stocks I would have considered at that particular time/ever..............but thats just me.

Seems we just never gel on our conversations, probably worlds apart on how we trade the market. Thats what I like about ASF, its so interesting to see others views on investment/trading.

After a year posting its clear my methods are from Mars, but hey alls good!.

 

[son of baglimit]

folks it aint rocket science - you know the market is due for a fall when -

people who have never, ever taken one degree of interest in the market suddenly come over to you at work, only because you happen to have a copy of AFR on your desk, and ask for stock tips.

the classic 'last in - last out' crowd - they get burnt due to lack of any understanding, and realise only then they shouldnt have touched the market - but of course they will do it again in about 5 years time - cant help themselves - dont want to be the only one who missed the action.

i always flick them away, telling them to put their money into their boring mortgage / high interest online bank account, and keep away from this dreaded stock market monster - it will only eat them alive.

 

[wayneL]

I am reliably informed by the muppets in my town that the market will never go down.

 

[marklar]

If you are talking about genuine blue chips, why would you have exited them at this stage, or for that matter, at all?

'cos I've got other purposes for the money in the next couple of months and would rather exit them with a profit than with a loss.

If you've made money out of speccies, those would be what I'd be selling if you really have a clear basis for expecting a correction.

I don't have a lot of $ invested in speccies, but it's an amount I'm happy to risk, at least for now.

m.

 

[Uncle Festivus]

Indeed, quite the opposite net effect of what was being forecast on ASF 2 months ago!.

Its not exactly 'rocket science' stating it after the fact now is it UF, and that punters will be locking in profits at some point.

Huh? After what fact? (Wot u talkin bout Willis?)

The sell in May theory has some merit in that it coincides with the end of the quarterly reporting season, the wind down to the financial year end & book squaring and the start of the Summer holiday season - simply all those Americans lock in their profits & go away and enjoy the fruits of their labours.


But, what makes it interesting at this particular point in time is that it loosely coincides with a secular cycle finishing & possibly the start of a consolidation cycle. The particular cycle being the US housing bubble. It's not rocket science to know that building things is a pretty big contributor to a countries economy, and you can see what happens when that stagnates, just look at NSW for the last 2 years.

Multiply that sort of cycle by an amount proportional to the respective economies of the US & Aust. and you then have the US housing bubble. The evidence is in that, even ignoring the sub-prime debacle, the bubble has indeed burst with the most immediate effect being felt by home builders, shown up by the accounts of the large listed companies.

If the numbers coming out were trivial eg normal cyclical aberrations then it would be carry on as per usual, but it's nearly every day that the data proclaims a new record of some sort eg lowest since XX or most since XX etc. Home builders are hurting and I wouldn't be surprised to see the first of them declare bankruptcy sometime in the future.

The crux of the point is that once a bubble like this even mildly deflates (which it has not, it's well & truly busted) then the flow on effects start snowballing, & when it starts to show up in the employment figures then it's time to reassess the market strategy.

Marketwatch report -

The headlines of the report were weak, but the details were even weaker.

• Nonfarm payrolls rose just 88,000 in April, according to the establishment survey. That's the weakest job growth in 29 months. Payrolls have grown by an average of 129,000 per month so far this year, down from 225,000 at this time last year.
• In the separate household survey, employment plunged by 468,000, the most since November 2002.
• The employment-population ratio fell from 63.3% from 63%, the lowest in a year.
• The unemployment rate rose to 4.5% from 4.4%, but the increase would have been larger except 392,000 potential workers dropped out of the labor force altogether, the biggest decline in the labor force in nearly four years. Unemployment grew by 77,000 to 6.8 million.
• The average workweek declined, and total hours worked in the economy dropped by 0.4%.
• Average wage growth was tepid, rising just 4 cents to $17.21, a 0.2% gain. Wages are up 3.7% in the past year, well off of the peak of 4.3%.

The longer the market discounts this sort of data, preferring to focus on excess liquidity driven money shuffling eg takeovers & buyouts (because companies can't see a more productive way of spending the cash) then the harder the consolidation phase.

Praemonitus praemunitus

 

[hacheln_mice]

Food for thought about the US job growth:
------------------------------------
1. Economic Deceleration Contained to Overall Economy

U.S. job growth in April slowed to 88,000, less than the 100,000 economists expected. And that’s actually the good news.

* The bad news is related to the comical shenanigans of the the Birth/Death Model.
* The Birth/Death model contributed 317,000 adds.
* That’s not a typo. That’s 317 thousand adds.
* According to Minyanville Professor Scott Reamer, since 1999 there has been only one other month in which the add was bigger, January 2004.
* For some perspective, in the 36 month period ending March 2002 - 36 months - the total adds from the birth/death model were 353,000. Over 36 months.
* Since the beginning of the year, the birth/death model has accounted for a net 388,000 jobs.
* Last year it added 964,000 jobs.
* The kicker is that the Bureau of Labor Statistics refuses to allow academics and commercial economists access to the models they use for the birth/death additions.
-----------------------------------------
What's a US dollar worth nowadays again?

Looks like another reason Aussie equities will continue to trump US equities for the rest of eternity.

 

[purple]

HINDSIGHT unfortuately I think a crash/sevre correct starts next thursday at latest
and everyone looking at china when it is actually the US.
But I could be wrong but time wil tell

Whoa! you can predict the exact date of the crash?

Please tell me which stock is gonna breakout! I'll put my house on it!

 

[nizar]

Nice to see articles like this in the mainstream media:

http://www.theage.com.au/news/busin...shouldnt-buy-in/2007/05/04/1177788399619.html

To be honest, i think an "imminent and severe market spike" will send my stocks through the roof!

Also, Bill Mclaren reckons 6600+ by June for XJO. Im not a huge fan but i tend to take note of his calls that i agree with LOL

 

[wavepicker]

Nice to see articles like this in the mainstream media:

http://www.theage.com.au/news/busin...shouldnt-buy-in/2007/05/04/1177788399619.html

To be honest, i think an "imminent and severe market spike" will send my stocks through the roof!

Also, Bill Mclaren reckons 6600+ by June for XJO. Im not a huge fan but i tend to take note of his calls that i agree with LOL

Sometimes it's better to disregard the "experts", most of all the headlines in the newspapers. Articles in the papers are traps for the unwary, suffice to say, do your own analysis and study your market well.

Cheers

 

[Cyber Man]

From my own studies and experience I cant see a major market correction happening in the near future. I see no reason fundamentally or technically and I see no major resemblance to any period prior to any major correction in history.

On the spi, I think we will see a top this coming week and then a 500 point retracement down to the middle of June and then a mad rush up to anywhere between 7000 - 8000 until October this year. After that top the market will go down for some time.

Thats just my view on the market at this point in time. I'm not trading at the moment and I haven't traded for years.

 

[YChromozome]

Classic.

I see T-shirtHumor.com's first design - "Take a bath in the real estate market with Mr. Housing Bubble, if I pop you're screwed - (Not affiliated with Mr. Internet Bubble)" ”” become best seller in less than a week.

Can't work out where to buy what appears to be version 2 above. (I'm wondering if I would get kicked out of many open inspections wearing it)

 

[krisbarry]

So you want the market to crash simply to reinforce and rationalise your own decision. As has already been pointed out, you have missed out on some excellent profits by moving to cash as early as you have.

Do what you like. I simply don't care.
But don't wish a crash for everyone else just to justify your own choices.
There are many inexperienced investors out there who would not have the fortitude to cope with a severe correction and who would quite unnecessarily sell, losing money.

Kris, you repeatedly expect other people to empathise with your situation, but as far as I can tell, you are quite devoid of empathy towards anyone else. Egocentricity is a largely unrewarding characteristic.

Don't stress your pretty little head ...Only missed out on 2 up days at this stage, being the 3rd and 4th of May.

Going back through many, many years of charts the May corrections start anytime from now. Almost every year that I can find it shows May as being a pretty rough month.

So...what make you so sure this year will be different?