PANIC!!!!! (Strategies for those long)

[MichaelD]

Its getting easier to spot the market fodder! Dont you think.

Nah - it's just history repeating itself, over and over again. This time it's (not) different, and it's not even 12 months since the last time this happened.

Raging bull market -> everyone's a supertrader
First blip -> Screams of pain
Dead cat bounces -> Phew, the correction's over. Bargain basement buying time. Err...oops.
Few more legs down -> Supertraders suddenly go very quiet. A small minority start to pay attention to the things which really make the profits.

Repeat from beginning next bull run.

 

[theasxgorilla]

Michael D,

In your own unique way I expect you just described Elliott Wave...in particular the A-B-C corrective phase

The ASX Gorilla.

 

[Sean K]

Michael D,

In your own unique way I expect you just described Elliott Wave...in particular the A-B-C corrective phase

The ASX Gorilla.

Yep:

A: Screems of Pain
B: Dead Cat Bounce
C: Oh dear......

 

[coyotte]

What no one lighten up when the XJO breached 6000 on Thurs last week?

That's what short term is all about.

Back to 2001 --- Bl**dy Markets won't do what you expect.


Cheers

 

[Out Too Soon]

The market fodder are the self proclaimed experts & the poor sods who follow them whose stops have automatically triggered in the last few days tying in certain losses. Nobody knows if the market will recover next monday even temporarily in which case the screams of pain will be doubled when stop loss addicts realise they didn't have to suffer a loss.

Maybe I should state the obvious, stop losses are a necasary evil for CFDs but I am neither knowledgable enough nor brave/stupid enough to go down that track. They're also useful to protect a profit on a rising stock but it's so much more profitable to pick a peak than let a stop trigger. Also pure gambling on penny dreadfuls (short term trades) use a stop.
The only worthless X-stock I have is CRS & that's from when I first started.

 

[MichaelD]

In your own unique way I expect you just described Elliott Wave...in particular the A-B-C corrective phase

Indeed. I'm not big on Elliott Wave at this stage, but from my rudimentary knowledge, the A-B-Cs have even been beautifully fractal in nature - all 3 days have had dead cat bounces intraday (more or less), and taken as an overall 3 day picture, it's a bigger dead cat bounce.

Fascinating to watch, and where it'll all end up, nobody knows.

 

[nomore4s]

Hi all,

Now I'm fairly new to this investing/trading game and this is the first correction I've encounted and I'd just like to make a few observations (from a novices point of view).
On the morning when the market dropped sharply there were a lot of posters panicking and complaining about how much they had lost (on a relatively small drop), this to me shows that alot of people were very poorly prepared for a pullback/correction. This indicates (as more experienced people have already stated) that people have fallen into a false sense of security with the strong bullmarket over the last few years and have got very poor risk management procedures in place and expect the market to just keep going up & up & up. This I think is very dangerous.
The other thing I noticed was that it didn't take long for posters to start rubbing their hands together saying look at all the bargins and to go on spending sprees, imo without due dilligence (ie without serious consideration that this could be just the start of a decent correction), but what amazed me about this is that a drop of around 3-5% is hardly a bargin as it really is only a slight discount, and it seems as alot of these "bargins" have seemed to have dropped further. Imo if people are viewing a stock as cheap after a drop of 3% or so, even before the drop they must think it is still good value otherwise they are trading on very tight margins.
A lot have people have made a lot of money in the current bullmarket but when it does eventually end (whether this is now or sometime in the future I don't know - imo this current situation is just a correction and it will eventually resume its upward trend) I think a lot of people will lose a packet as they will be -
a) poorly prepared and have poor risk management
b) they will chase the market down thinking they are getting a bargin

These are just my very simple (compared to the more experienced posters, who I might add are a lot smarter and have a much better understanding of the market than me.) observations on the current situation and is only my opinion.

Good luck to all

 

[Goldbug]

Re: PANIC!!!!!

Ok your long and fully committed.

Your caught in the heavy down move and if you sold out would lose 1000s.

In this situation I'm interested in what those who post here are or would be doing.

I have 2 positions only and I know what I will be doing.

Comments.

I'm fortunate to have other sources of income so in a situation like this I won't sell at a loss. I too have 2 long positions in gold stock with 50% of capital still in cash. My plan is to wait for the correction in gold and DCA (Dollar Cost Average) another 25% and keep 25% as reserves.

 

[barnz2k]

NoMore
I think youve described me (aka noob) pretty well there.. I made a hasty decision to buy in on MBL purely because it dropped about 6% and its just one of those ones that has always been mentioned to me as strong in the past.

I guess If im not planning to cash my shares anytime soon I just wait and hope they recover and eventualy continue to increase.

Last year I was travelling and had no idea what my stocks were doing.. Currently I have no job and watching them far too carefully I think.. Making me make stupid decisions like the other day...

Im good at saving cash i just dont know what to do with it to make more lol.

 

[rederob]

The allords has a way to go if it is to replicate the falls of last May, or September 2005.
There is a reasonable chance it will.
Reason is that the market needs to shake off a little more before getting on to a more even keel.
As to when to buy - a matter of personal choice as it will depend as much on good timing as it will the equity right now. But that's a truism for any day.
My view is the real question is about whether or not "panic" is well founded.
A correction was screaming out, but the need to panic was not.
I still can't see any reason to panic, as the charts are showing this to be very much in keeping with regular cyclical movements.
Moreover, we have had US and European markets somewhat out of kilter in recent days.
Panic when they all lose 5% minimum in 24 hours and the dominos keep lining up in readiness to fall.

 

[tech/a]

5 min chart for last few days including now.
Its not saying anything different to last week.
There is no return to buying seen at this time.
Selling on even the slightest strength.

 

[tech/a]

OUCH or YES if your playing short for the last 4 days.
Still no sign of support.
Note the resistance at all consolidation benches.

 

[money tree]

THERES NO SUCH THING AS SUPPORT IN A BEAR MARKET

 

[Sean K]

THERES NO SUCH THING AS SUPPORT IN A BEAR MARKET

It's not a bear market. We are still well in a bull market started in 2003.

 

[tech/a]

Agree Kennas.

Tree.

Define a Bear Market and WHEN it was/is obvious to you that it had turned from Bull to Bear.

I'm with Kennas I'm interested in how 4 days trading with a drop of 500 points can be qualified as a Bear Market.
When there have been 2 other corrections in the last 18 mths that have fallen well below (in total point value) to this current drop.

 

[nizar]

Agree Kennas.

Tree.

Define a Bear Market and WHEN it was/is obvious to you that it had turned from Bull to Bear.

I'm with Kennas I'm interested in how 4 days trading with a drop of 500 points can be qualified as a Bear Market.
When there have been 2 other corrections in the last 18 mths that have fallen well below (in total point value) to this current drop.

We dropped 500pts??

 

[Freeballinginawetsuit]

5450,key support for the all ords...........quicker the better.

 

[tech/a]

We dropped 500pts??

OOOps

Yeh good point.
Try 320.

(maybe I know something?! hahaha).

 

[Sean K]

We dropped 500pts??

400 now I think.

Current situation does not warrant a Bear Market call. Possibly the start of one but too early to call.

This is a heathy correction.

Lucky we are having it because if the market had have kept going verticle we might have had a real crash. pe's will start to look more attractive soon, and the specuative money is being shaken out of resources, especially uranium.

A nice healthy correction.

Everyone keep their head.

 

[Magdoran]

It's not a bear market. We are still well in a bull market started in 2003.

Sure, but that's one hell of a wave 3 (assuming it is), so 4 is a LONG way down... even if it is a bull...