Imminent and severe market correction

[Real1ty]

At some point, probably soon, there will be a large correction to this move down. It has been one way traffic since November. Whether or not it is the ultimate market bottom is a moot point.

We should be very close to a tradeable rally, especially given the D+G in some of these threads.

bye

brty

And what do you actually base that theory on?

I wouldn't rule out a small bounce sometime soon, but a "large correction"....you're kidding yourself

 

[motorway]

At some point, probably soon, there will be a large correction to this move down. It has been one way traffic since November. Whether or not it is the ultimate market bottom is a moot point.

We should be very close to a tradeable rally, especially given the D+G in some of these threads.

bye

brty

Some times that were similar

roughly

02 to 03
92 to 93
94 to 95
89 to 91

and so on

motorway

 

[Uncle Festivus]

Thanks for that. I am sure that's a fresh view that no one has thought about. That one day soon we may rally and it may or may not be the bottom.

Aw.. come on TH, it's the first post, we should encourage wider discussion .

There could be something in it as one last flip out of spec commodities and back into equities could occur; just not sure what the trigger would be though, it looks shot to me.

 

[brty]

Hi all,

Thanks for the warm welcome.

Let's see if there is any argument with the following examples.

Will ANZ bank will make $1.6B less this year than last year?

Likewise for each of the other banks.

That is what the market is currently pricing in.

All it would take is for the Fed in the US to drop rates a little more than expected, as well as increasing liquidity in tandem with other CB's and you have the recipe for a rally. Taken with short covering, and those who are looking for a bargain, when it comes it will be explosive.

I may be a new poster on this forum, but I first traded share and commodities in 1981. This gloom and doom stuff that is portrayed here has been talked about for a year now, with subprime problems being known about since then.

The downward momentum in prices is declining, yet the news and the D+G get worse. Come to your own conclusions, I'm just stating my opinion.

bye

brty

 

[Whiskers]

Hi all,

Thanks for the warm welcome.

Hi there brty. :bekloppt:

Good to have some like minded company on here.
:bananasmi:jump:

The downward momentum in prices is declining, yet the news and the D+G get worse. Come to your own conclusions, I'm just stating my opinion.

bye

brty

:iagree:

Motorway, glad you mentioned those dates.

I was thinking of mentioning that one of these so called bear rallies will in fact be the bull bolting out the gate.

Chops, not (blindly) bullish, but positive thinking insofar as there are always opportunities in a changing landscape and one needs to notice the suttle changes to pick the bottom closer. If one takes the 'normal' 'follower' principle the market will have turned and got up a head of steam before most people are confident enough to get on board.

 

[Uncle Festivus]

I may be a new poster on this forum, but I first traded share and commodities in 1981. This gloom and doom stuff that is portrayed here has been talked about for a year now, with subprime problems being known about since then.

The downward momentum in prices is declining, yet the news and the D+G get worse. Come to your own conclusions, I'm just stating my opinion.

bye

brty

I too have been trading for about the same time, except I have never seen conditions as bad as they are now - this cannot be understated/ignored. The sub prime problems have also been known to many for more than a year (longer if you have done some simple research), and each month some person in authority would proclaim a bottom was near or that it would be contained etc, and it would promptly get worse.

Any rally to come out of this would indeed be a suckers bull trap, building up & then promptly dumping the last few gullibles and relieving them of their cash. It is a possibility that we will get a sympathy rebound but what we are dealing with is a secular negative financial credit/derivative contagion - it's not going to get fixed overnight at least. This is not normal.

 

[josjes]

Hi there brty. :bekloppt:

Good to have some like minded company on here.
:bananasmi:jump:



:iagree:

Motorway, glad you mentioned those dates.

I was thinking of mentioning that one of these so called bear rallies will in fact be the bull bolting out the gate.

Chops, not (blindly) bullish, but positive thinking insofar as there are always opportunities in a changing landscape and one needs to notice the suttle changes to pick the bottom closer. If one takes the 'normal' 'follower' principle the market will have turned and got up a head of steam before most people are confident enough to get on board.

Yeah Welcome onboard BRTY. Just trying to infuse some positive thinking in this thread. Hopefully I won't get kicked out

What I see is this:

Ben Bernanke does not want an election year recession as otherwise he will be a Fed chairman one term only and be out of a job in January 2010. The US politicians will do all in their power to avert recession in this election year no matter what. (After election year, let the market forces talk). Therefore expect interest rate comes down to 1% if necessary. And US consumers do respond to rate cut.

Congress has enacted $160 billion tax cut package. $100 billion for consumers in June and July, $630 billion for business depreciation allowance.

So we've had several actions in the last month to try and revive the economy. Federal Reserve policy, tax cuts, and getting borrowing powers.
And if all else fails, bailout by the Fed is not imposible.

As an aside, notice that there is a distinct rotation of sectors in ASX today:

Materials down -5%
Energy down -1.8%
Utilities up 1.3%
Banks/Insurance up 2.9%

Since Banks/Insurance is what brought this market down in the first place, perhaps the market is trying to tell us something here ???

 

[sam76]

Japan's certainly finishing strongly

http://www.bloomberg.com/index_asia.html

 

[Kauri]

As an aside, notice that there is a distinct rotation of sectors in ASX today:

Materials down -5%
Energy down -1.8%
Utilities up 1.3%
Banks/Insurance up 2.9%

Since Banks/Insurance is what brought this market down in the first place, perhaps the market is trying to tell us something here ???

In the WSJ there ia an article suggesting the Fed may try new measures.. i.e bailing fred and fan... and repo's for a wider range of financial instos besides banks... may have put a spark under our financials??
Materials reacting to drop on LME and Chinas latest outlook...
I thunk...

Cheers
.........Kauri

 

[dhukka]

Hi all,

Thanks for the warm welcome.

Let's see if there is any argument with the following examples.

Will ANZ bank will make $1.6B less this year than last year?

Likewise for each of the other banks.

That is what the market is currently pricing in.

I would be interested to see how you arrive at that calculation

 

[dhukka]

I posted this before in another thread about 2 months ago but I think it is worth repeating here.

Allow for "clearing rallies" without speculating on them

It is crucial to recognize that the market downturns associated with recessions are never one-way movements. The basic feature of bear markets is that they maintain the hope of investors all the way down. The stock market often “rides the Bollinger band” lower, becoming more and more oversold, but will then unpredictably clear those oversold conditions by producing explosive advances that are “fast, furious, and prone-to-failure.” The 2000-2002 bear market, which took the S&P 500 down by half and the Nasdaq down by more than three-quarters, included three separate 20% trough-to-peak advances in the S&P 500, and many more 5-7% rallies. We did capture a portion of those, but "clearing rallies" are always prone to failure, so we could remove only a fraction of our hedges. Unless we observe a very broad improvement in market action, that sort of trade would require more modest valuations than we see at present. Generally speaking, when valuations are stretched (on normalized earnings) and both market action and economic measures have turned negative (as they have now), you can expect that “buying-the-dip” will result in a brief feeling of genius and success followed by profound regret

 

[explod]

I posted this before in another thread about 2 months ago but I think it is worth repeating here.

Now you are talking (and you did way back then) Got to hand it to you.

Just buy some gold and silver bulllion to protect your cash then blue chip property when that exhausts and you family will love you

 

[Kauri]

A lot of hedgies are coming under pressure... hope they don't have some of their better performing assets seized and sold out from underneath them... NYT...
Cheers
.........Kauri

 

[sassa]

Wouldn't have anything to do with the expiration of the SPI futures on March 30?Manipulating?

 

[Kauri]

the Fed announced coordinated central bank liquidity adds with the Fed providing $30 bn to the ECB and $6 bln to the SNB. The Fed will also increase swap lines with the ECB and SNB and will lend $200 bln in USD treasuries for 28 days.
That should fire the markets up... for a whiles..
Source... the Fed
Cheers
..........Kauri

 

[ithatheekret]

I'm happy , the ASX200 tested 5200 so has the ORDS , could go a touch lower , the financials are those I want to see cheaper , even though earnings are in single digits mode . Few more shuffles and we should be able to get back to linear projections .

There's still problems offshore and more to come , so I'm only looking at local banks etc. , I expect some consolidation soon too .

The ASX50 could get softer as well . But I'm looking at Gas plays right now .

 

[brty]

Hi all,

Bit of a no brainer, a rally has started. S&P up over 30 in overnight market, fed and other CB's offering great liquidity. The perma bears are about to get a fright.

Who would have thought it possible??

And no Real1ty, I'm not kidding myself at all.

bye

brty

 

[Kauri]

the Fed announced coordinated central bank liquidity adds with the Fed providing $30 bn to the ECB and $6 bln to the SNB. The Fed will also increase swap lines with the ECB and SNB and will lend $200 bln in USD treasuries for 28 days.
That should fire the markets up... for a whiles..
Source... the Fed
Cheers
..........Kauri

Guess work on my part.... but...
The Fed may have to indicate less aggressive rate cuts ahead, if at all, in order to cool US inflation fears but also contain the commodities bubble which has been getting up speed from low US cash rates and less than aggressive inflation stance from the Fed. A more hawkish Fed tone is a risk to commodities and to the $USD crosses as well, and is more likely after the current liquidity measures. until the next disaster of course
......or not???
looking to short the skip?? if and when things settle
Cheers
...........Kauri

 

[chops_a_must]

Chops, not (blindly) bullish, but positive thinking insofar as there are always opportunities in a changing landscape and one needs to notice the suttle changes to pick the bottom closer. If one takes the 'normal' 'follower' principle the market will have turned and got up a head of steam before most people are confident enough to get on board.

It's subtle. I notice subtle things.

Blind... hmmm... a lot of your comments seem to remind me of the CNBC perma brigade.

But I dispute the positive thinking. I'll continue to take trades as they appear. Bias in thinking should only be reflected in the sectors you choose to analyse, not what individual trades you should take. I have positive thinking on the hot rocks stocks, but that attitidue wouldn't have stopped people losing 30-50% recently.

The leverage out there is unparallelled in history. And the individual leverage of people is unparallelled. To think that positive thinking will stop the charts from looking bad is crazy.

It looks like the fed is softening everyone up for an eventual massive bailout. Dig dig, chop chop, print print, money money.

Certainly all I see is a large pop in gold, silver and agri. And I think that says it all there. No positive thinking, no negative thinking, just what I see, just what is there to trade for the longer term.

FWIW I'll look to go long some banks for the next little while. A trade for a week or so... See, no thought bias required to put on a trade.

 

[dhukka]

Hi all,

Bit of a no brainer, a rally has started. S&P up over 30 in overnight market, fed and other CB's offering great liquidity. The perma bears are about to get a fright.

Who would have thought it possible??

And no Real1ty, I'm not kidding myself at all.

bye

brty

Who would have thought we would get a rally? Basically anyone with a brain in their head. Rallies are part and parcel of bear markets. The Fed is injecting 'great' liquidity, what does that mean exactly? As opposed to the not so great liquidity they've been injecting for 6 months? Once again, the Fed is not injecting new money, it is temporary in nature...as this rally will be.