Recovery or Dead Cat Bounce?

[Aussiejeff]

An interesting snippet from today's The Australian..

An RBA analysis of wealth distribution shows that the richest 20 per cent hold 80 per cent of the directly owned wealth in the share market and 60 per cent of superannuation assets.

This sobering fact might give some insight to some of us mere mortals into the sometimes apparent disconnection between the current sharemarket performance & optimism vs the "real economy" performance & pessimism.

Basically, I reckon you just have to think like a multi-millionaire or billionaire to make sense of the (to some of us) seemingly over-optimistic moves in the share markets.

So, just imagine you have got a $million or two or more to play with. Would you be tempted to buy up and play with blue-chips at today's "bargain" prices? Most likely the answer would be a resounding HELL YEAH!

There's your answer to the conundrum.

Um. So, would one of you 20 percenters like to "loan" me a $million at 0%? I'd like to play too....!!

 

[Gordon Gekko]

An interesting snippet from today's The Australian..



This sobering fact might give some insight to some of us mere mortals into the sometimes apparent disconnection between the current sharemarket performance & optimism vs the "real economy" performance & pessimism.

Basically, I reckon you just have to think like a multi-millionaire or billionaire to make sense of the (to some of us) seemingly over-optimistic moves in the share markets.

So, just imagine you have got a $million or two or more to play with. Would you be tempted to buy up and play with blue-chips at today's "bargain" prices? Most likely the answer would be a resounding HELL YEAH!

There's your answer to the conundrum.

Um. So, would one of you 20 percenters like to "loan" me a $million at 0%? I'd like to play too....!!

Everyone including the rich had to start somewhere. Some may be family money or made through a buisness.
But even the journey of a thousand miles begins with a single step.
If you have a time frame of years then why not start to accumulate at these prices? Should you wait for a pull back that may never come? And even if it did would you buy or wait for it to go lower possibly missing it again?
The rich get richer because they understand cycles and they have the balls to act.
If you dont have the money to lose then don't bother investing at these or any other prices, keep you money in the bank.

This is not ment to be directed to Ausjeff in particular.

Best
G

 

[Uncle Festivus]

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

Ah yes, the infallible charts, which I have posted - explain the set ups forming right now. What is it saying to you?

Too high, too fast, based on hope & rhetoric, and perhaps a tiny little bit of fraud thrown in.

I remember several conversations with you, and others, before this all started and there was a high degree of skepticism and ignorance. Nothing has changed for the better, in fact things are several times worse. It's a technical rally?

I'ts human nature to want to believe that things are getting better when at the very best things are only getting less worse, but there are still the underlying severe structural imbalances that caused this in the first place ie too many Japanese Yens, and now too many US dollars, British pounds etc etc

The lawsuits are building against the big end of town for the great con. It's ironic in that if justice prevails then we are probably heading for much worse?

I have found ascending wedges fairly reliable signals of rally exhaustion?

 

[GumbyLearner]

Are we in the largest global credit contraction in 60 years?

 

[sails]

...I have found ascending wedges fairly reliable signals of rally exhaustion?

UF, I like trendlines and have added another, more unconventional line to your chart and circled the points where it touches. It does go through some other price action, but have found some of these intersecting lines based on medium term highs and lows often give some support / resistance.

However, whether it is a pause, reversal or the market totally ignores it, only time will tell.

 

[Sean K]

I'ts human nature to want to believe that things are getting better when at the very best things are only getting less worse,

It's human nature to follow the lemmings off the cliff too.

 

[Wysiwyg]

Notice the anticapatory correction after the bounce doesn`t happen. Draw them higher, draw them higher then schmacko. Only the greedy and the late comers get burned. Just my worth.

 

[RayG]

Here's a little fun for the bears..

This cat wouldn't vroom if you put 4,000 volts through it.

see.. http://www.youtube.com/watch?v=4vuW6tQ0218

Me? I'm still betting that we have already seen the worst... Buy, Buy, Buy.. Bye

Regards

 

[Uncle Festivus]

The Norwegian Blue Cat??

The boyz will have to dig deep going into the week end to salvage the sell off this arvo to close above the 'psychological' level of 3800 to keep this baby alive?

April 16 (Bloomberg) -- David Tice, the chief portfolio strategist for bear markets at Federated Investors Inc., said the Standard & Poor’s 500 Index will probably plunge about 62 percent.

He spoke during a Bloomberg Television interview today. The Federated Prudent Bear Fund that he founded returned 6.7 percent last year as the S&P 500 plunged 38 percent, the most since 1937.

Tice said the benchmark index for U.S. stocks may slump to about 325. It closed today at 865.30. The measure has surged 28 percent since March 9, the most in five weeks since the 1930s.

Ding dong - 28 percent in five weeks!

 

[nomore4s]

rotflmao, what a surprise - someone who runs a bear fund expects the market to drop.

 

[sammy84]

Thats close wasn't very promising. XJO didn't want to hold past 3820. Where we go from here will be important. I guess we will know the true direction of this rally by at least next tuesday, tight stops till then for me

 

[MS+Tradesim]

Closed all my longs today. Daily and 5min charts for XAO attached. Looks like a top to me. Happy to re-enter if I'm wrong.

 

[studmuffin]

Was there any particular news item that prompted the weak close or was it just exhaustion ? It looks like XJO 3800 and XAO 3750 has an awsome line of ressistance.

 

[MrBurns]

ROFL I just looked at the ASX, havent had time all day, what a roller coaster, WTF is going on ?

 

[wonderrman]

Was there any particular news item that prompted the weak close or was it just exhaustion ? It looks like XJO 3800 and XAO 3750 has an awsome line of ressistance.

There wasn't any negativen news that I am aware of. I would put it as exhaustion, markets can 't run 25% without a breather. Buyer's need a break. As commented previously ~3800 is the resistence line we were all looking at before another push down. Lets see what happens and the way the markets move down (if they do) over the next few week. It is this reaction that will determine my trading strategy over the next few months.

 

[Gordon Gekko]

I thought this article was worth a read.

"There is a tonne of cash on the global sidelines. This is exactly the same in Australia, where financial planners tell me there is a big pool of term deposits about to come due and investors will have to make a choice of rolling to a significantly lower term deposit rate or asset allocating to riskier assets. Planners tell me they believe there will be rotation from term deposits to income based domestic equity fund products."


http://www.eurekareport.com.au/iis/iis.nsf/pages/040BCD14A99B6686CA25759B00178079?OpenDocument

Best

G

 

[MrBurns]

I thought this article was worth a read.

"There is a tonne of cash on the global sidelines. This is exactly the same in Australia, where financial planners tell me there is a big pool of term deposits about to come due and investors will have to make a choice of rolling to a significantly lower term deposit rate or asset allocating to riskier assets. Planners tell me they believe there will be rotation from term deposits to income based domestic equity fund products."


http://www.eurekareport.com.au/iis/iis.nsf/pages/040BCD14A99B6686CA25759B00178079?OpenDocument

Best

G

Makes sense but I've never seen Charlie Aitken get anything right.

 

[MRC & Co]

MS Tradeism, yep, my thoughts exactly on the charts, just the 'spike' through to the 800s and false break I was looking for and talking of since the start of this rally, target achieved.

Uncle, DING DONG 28% in 5 wks shouldn't be taken lightly, an over-extension needs a reaction, again, suits the charts.

Bullish sentiment in the air a bit now for sure, see it on the boards and in the media, funny considering the scepticism at the start of this rally and before it (what has changed, people need confirmation, whereas we are in a better shorting region now than then).

Really all just psychology, the most important aspect of trading IMO. It really is all just pushing, pulling, defending and covering, absolutely no magic.

Studmuffin, Taiwan came off at exactly the same time as us (lunch), as per usual lately, leading the other markets (though their reaction wasn't quite the same). Apparently Toshiba released poor profits around this time............

 

[cfdman]

If its a bounce ..its one hell of one.I treat it as the market shows it .All u can do is follow the support and resistant levels and go from there.Take the opportunity as it happens ,for up or down.

 

[MrBurns]

MS Tradeism, yep, my thoughts exactly on the charts, just the 'spike' through to the 800s and false break I was looking for and talking of since the start of this rally, target achieved.

Uncle, DING DONG 28% in 5 wks shouldn't be taken lightly, an over-extension needs a reaction, again, suits the charts.

Bullish sentiment in the air a bit now for sure, see it on the boards and in the media, funny considering the scepticism at the start of this rally and before it (what has changed, people need confirmation, whereas we are in a better shorting region now than then).

Really all just psychology, the most important aspect of trading IMO. It really is all just pushing, pulling, defending and covering, absolutely no magic.

Studmuffin, Taiwan came off at exactly the same time as us (lunch), as per usual lately, leading the other markets (though their reaction wasn't quite the same). Apparently Toshiba released poor profits around this time............

Congratulations on post 2000