Recovery or Dead Cat Bounce?

Nyden · 15 April 2009

MrBurns said:
Haha if I have to throw money away so I wont be called a coward, count me out.

Calculated risk is one thing gambling is another.

I dont care about lows or picking the bottom I just dont want to put money into a market that may sink any second, coward ? no, just not dumb ars* bullish stupid.

No, you're not a coward Burns because at least there are actions behind your judgements, you act on your beliefs. You sell if you believe there's to be a downfall, and you buy if you believe there's upside.

When I mention the cowards, I'm referring to those that simply state that they're "ready for the new lows"; yet do nothing when they hit! They say they're cashed up, and ready to buy - but if / when we hit 2800, will they actually do anything? I doubt it.

Burns, what I will say about what I've witnessed recently from you though, is that you were using the market to gamble, not invest.

When you first decided to buy into Bluescope, it sounded as though you had a long term view; that steel would eventually rise. Yet you sold out 2 days after, why? The reason I say you were gambling, is because it seemed as though you had no plan. Did you decide if it was a short-term or long-term holding, how did you select your position size (I'm guessing it was too large), did you have a target sell price, or a stop loss?

Or, did you simply buy in because, "I want to make 2k in one day"; that's the difference between gambling and investing.

Datsun Disguise · 15 April 2009

OK so employment is a lagging indicator, the markets forward looking - so that means that the crashing employment rate is just a result of the markets a few months ago right?

WRONG.

We aree not in a theoretical situation her - this is real. Last year before christmas saw the first preparatory steps by companies to insulate themselves from the impending crisis caused by the credit crunch. The real world hadn't yet been hit by the crisis (real world being jobs and being able to spend our salaries). So now we are in the midst of the the second round of sackings that are being driven by real balance sheets problems. ie no one is buying anything, major projects have stopped. Spoke to a mate last night, he has been retrenched from his job at a stone masons. he was well paid and considered the gun, but too expensive to keep when no-one wants rocks on their walls anymore. He along with heaps of others were given the hairy elbow skin 2 weeks ago. The size of the cut was 66%.... Where I work we have reduced our development spend by 50% over the last few months - that equates to 150 jobs. The next round of cuts gets going next week....

We have only just started to see the real impact to real people and their capacity to buy stuff. The next lot of emplyment figures are going to look pretty dire.

I'd be surprised if we don't revisit the bottom again this year...

MrBurns · 15 April 2009

Nyden said:
No, you're not a coward Burns because at least there are actions behind your judgements, you act on your beliefs. You sell if you believe there's to be a downfall, and you buy if you believe there's upside.

When I mention the cowards, I'm referring to those that simply state that they're "ready for the new lows"; yet do nothing when they hit! They say they're cashed up, and ready to buy - but if / when we hit 2800, will they actually do anything? I doubt it.

Burns, what I will say about what I've witnessed recently from you though, is that you were using the market to gamble, not invest.

When you first decided to buy into Bluescope, it sounded as though you had a long term view; that steel would eventually rise. Yet you sold out 2 days after, why? The reason I say you were gambling, is because it seemed as though you had no plan. Did you decide if it was a short-term or long-term holding, how did you select your position size (I'm guessing it was too large), did you have a target sell price, or a stop loss?

Or, did you simply buy in because, "I want to make 2k in one day"; that's the difference between gambling and investing.

No I wasnt gambling but I thought the market was heading down again and I had $14k in there and really didnt feel it was safe.

I have no risk tolerance and shouldnt be in there at all, but my neighbor used to rib me about that ..........now he's probably a million down and I'm not so go figure........

MACCA350 · 15 April 2009

MrBurns said:
No I wasnt gambling but I thought the market was heading down again and I had $14k in there and really didnt feel it was safe.

I have no risk tolerance and shouldnt be in there at all, but my neighbor used to rib me about that ..........now he's probably a million down and I'm not so go figure........

I've been holding $16k worth of Bluescope for about 4 months now. Bought in at $3.16 and have ridden the market as I have no doubt that it will be a good investment for the future as things recover.

I started buying up stocks in November and are now invested in 13 different stocks from a variety of different sectors with some blue chip and some more speculative. Some are long term investments, some are short term.

cheers

Uncle Festivus · 15 April 2009

Nyden said:
Completely agree. Burns, even in raging bull-markets, there is always the chance you'll just be a shocking loser and pick all the wrong buys!

Jeez, just look at the bearishness here. So many people posting their little 's, wishing for new lows to be re-tested?! Why? Are you guys short? No, probably not. Upset that you missed a short-term bottom? Yes, that sounds about right.

If we do hit new lows, will you guys actually do anything with that ? No, because you're whinging little cowards who will only keep calling for new lows, in the hopes of perhaps hitting zero? Just let me know when some of you buy in, so that I may sell.

Spoken like someone who has done their money and now is bitter and resentful?

You misunderstand bearishness for reality. The markets have got it wrong with the pre-emptive bullishness or as they say 'forward looking', despite evidence of worsening conditions (See Datsuns post for reality). Nothing wrong with that as there's a lot of people lost real money by following the advice of all these so called experts. But what I see is a bounce that's not covered by volume, in fact some may see it as the last chance for an exit.

If you start degrading the thread with comments like "whinging little cowards" then you put yourself forward to justify your post's by showing us how you are handling the situation - tell us how a real pro trades/invests in this market? From this and other postings your sentiment changes with the wind, but always with the same venomous disregard for others point of view.

These markets sort the men from the boy's, reality from fiction!

What are you doing???

Datsun Disguise · 15 April 2009

Just because the market is dead doesn't mean there isn't investment/gambling opportunities available. If you invest on good information with a good reason for taking the risk then you'll make money in most markets. Investing for the 'long term' in times like this in companies that will be good 'in the long run' is a great strategy if you aren't interested in doing the real research.

As for investing / gambling argument. Anything with an element of risk is a gamble, you can't decouple them imo.

Uncle Festivus · 15 April 2009

Here's how 'forward looking" the market is - a leading indicator say's it's only just begun?

TOKYO (MarketWatch) -- A leading economic index for Australia fell in February to its weakest level in more than two decades, pointing to a possible heavy contraction for the nation's economy, according to data released Wednesday.

The headline month-on-month rate contracted 0.3% in February from January to an annualized rate of 5.1%.
That result for the index, compiled by Westpac Banking Corp. and the Melbourne Institute, was the lowest level since September 1982, according to reports. The annualized rate, meanwhile, was well below the long-term trend of 2.9%.
The index is meant to signal the likely pace of economic activity in three to nine months into the future.

http://www.marketwatch.com/news/sto...x?guid={791FA8C0-004D-4460-8D6C-1C02DE22BF87}

MRC & Co · 15 April 2009

Gordon Gekko said:
Haven't heard much from the bears in the last couple of days? Does that mean they are starting to believe this rally actually has legs?

Nope, still waiting for a quick come-down, but I would really like to see a spike up into the 3800s (preferably high 800s) and hopefully the S&P does the same, hitting around 875s.

Been looking for shorts more and more though lately, and trading with a strong short bias as of today (previously cautiously bearish), only took about 5 longs today out of about 70 trades. First time I have been so biased, unsure exactly why I am taking such a big bias, but I sense the time for some big downers is right around the corner now, I can almost sniff it (spike up first would be nice though).

nunthewiser · 15 April 2009

IS A BIG BAD BEAR

just waiting for a few more goldilocks moments before i finish settin my trap

could be wrong tho , but hey the dude asked where we are . here i am .....

but hey on a side note , been one bewt rally and sure been an easy one to jump in and out of ....

blessem all i say

Trembling Hand · 16 April 2009

The Boyz didn't like the GDP out of China today. Is this going to be the catalyst that kills the cat??

China’s Economy Expands at the Slowest Pace in Almost a Decade

Uncle Festivus · 16 April 2009

Trembling Hand said:
The Boyz didn't like the GDP out of China today. Is this going to be the catalyst that kills the cat??

China’s Economy Expands at the Slowest Pace in Almost a Decade

No, no.. it's good news - it means we are at the bottom, again! Now they can start making things for the worlds consumers, again. Just need to make the worlds consumers consume, again?? Small flaw in the plan, but worth spending a few trillion to debunk an untried theory?

Aussiejeff · 16 April 2009

Hmmm. I suspect the only "bounces" we are having these days are being fueled primarily by Big Bailed-out Banks worldwide throwing free taxpayer gifted Bailout Buck$ at a zillion $upa-cheep stocks in the hope they can punt some big winners.

Let's face it, they have been given cast-iron political guarantees that they will NEVER, EVER be allowed to go bust (remember the "too big too fail" mantra?), so now they have a great big green light to go gamble like crazy with bucket loads of Bailout Buck$ no matter what the risk.

Lemme see. If I was given 10's of Billion$ of FREE Bailout Buck$ to "invest" errr.... *coff* ..... GAMBLE ... in the stockmarkets, would I sit on it or GO NUTZ!

I think we know the an$wer.

How many heavily traded stocks now have big banks as their major shareholders? I re$t my ca$e.

MRC & Co · 16 April 2009

Trembling Hand said:
The Boyz didn't like the GDP out of China today. Is this going to be the catalyst that kills the cat??

China’s Economy Expands at the Slowest Pace in Almost a Decade

Yeh, market didn't like that one after all the buzz out of China lately! Didn't expect such a hammering of the figure, but hey, I'll take it!

And for the first time today in quite some time, I saw a legitimate seller in there, even after the Nikkei and S&P went haywire, they couldn't push us through this guy! I think some profits are starting to be taken off the table.

Uncle Festivus · 16 April 2009

JP Morgan 'results' out now, and surprise surprise they come in 'better than expected'. Futures did a pole vault then ho hum again.

Some charts to mull over; it's bit like Wile E Coyote after running off the cliff and momentarily realises what's about to happen next?

Ascending wedge

Too bullish??

>Apocalypto< · 16 April 2009

Uncle Festivus said:
The markets have got it wrong with the pre-emptive bullishness

Markets never get it wrong, people with opinions do.....

Gordon Gekko · 17 April 2009

If the market can break through 3800 and hold those levels into the weekend, is that bullish?

At what point is a dead cat bounce considered a sustained recovery?

Get On Board!!!

Best

G

aleckara · 17 April 2009

Who ever said the stock market follows the economy? It follows its own patterns - the economy is normally an excuse for something happening that would of happened anyway (the market was overbought/oversold)

The economy troubles may be beginning. But the effects (credit restrictions and such) that are doing this do lag a fair bit - banks and everything are still in contracts to provide after all. When the government is in massive debt maybe then we will see a correction.

Aussiejeff · 17 April 2009

Uncle Festivus said:
JP Morgan 'results' out now, and surprise surprise they come in 'better than expected'. Futures did a pole vault then ho hum again.

At the same time, US new housing starts come in with a *surprise* 'much worse than expected' result after the previous month's *surprise* 'much better than expected' results.

Every day it is *surprise*, *surprise*...

So, either the stats out of the US can't be believed due to flaky procedures and methods (ala Aussie Bureau of Stats rubbish) or..

Who is pulling our chains?

Aussiejeff · 17 April 2009

aleckara said:
Who ever said the stock market follows the economy? It follows its own patterns - the economy is normally an excuse for something happening that would of happened anyway (the market was overbought/oversold)

The economy troubles may be beginning. But the effects (credit restrictions and such) that are doing this do lag a fair bit - banks and everything are still in contracts to provide after all. When the government is in massive debt maybe then we will see a correction.

So, where is the historical precedent where almost all the World's big banks (those surviving now becoming more like "behemoth banks" IMO) had SO MUCH taxpayer funding thrown at them in a desperate attempt by all the world's gummints to float them back into stratospheric profit making?

I don't think any previous "recessions" have ever been on this massive scale or seen the same rapidity of 100% government-backed "free boosting" of the wealth and financial market power of the Behemoths?

Of course, I stand to be corrected.

moXJO · 17 April 2009

With the amount of spin coming out of Washington you have to be very careful in picking one solid direction. I posted a link to a forum (posted it a few months back). That was saying the exact same things about the state of the US economy, as are posted on this forum. It took me a minute to realize that it was actually from 1999-2000. So the illusion that is Wall Street finance may just soldier on. So long as they can fudge the books and turn the tide of sentiment.
But when will all this crash into a screaming mess? The debt just keeps snowballing.

I have read that China has cottoned on to the fact, and is now stock pilling metals instead of western securities. Something about pegging their dollar to a broader spectrum of metals, instead of just gold. So at least our mines should (hopefully) stay relatively busy.

Recovery or Dead Cat Bounce?

Nyden

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Datsun Disguise

MrBurns

MACCA350

Uncle Festivus

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