Recovery or Dead Cat Bounce?

[nunthewiser]

How much money is to be made before that happens though?

Already we have seen some great opportunities while the bears keep calling for a crash and a new bottom. Even if we do head straight down from here if you have managed your risks and trades well you should have done very well out of this rally.

but who says some of the bears havent ? i still believe that we will venture to new overall lows but not gunna sit around with my finger up my bum waiting for it

trade whats been presented and boy this rally sure has been a doozy

 

[makingmoney]

I tend to agree with most of ur comments..(refering 2 last post by nero64)but hard to say if we wont see lows like (3100-3200 xao)few months ago..but i guess the market is all speculation as you would know.either u follow charts or incoming information or both...we follow the dow...famous quote being " When america sneezes the would catchs a cold" and i dont have much faith in the following news coming out of the dow..due to the covering up or ramping information..e.g: the stress tests for the banks is coming up..well we all know i couldnt all changed over night but with fancy accounting and a slide of hands ..presto...banks r ok lmao..well with what i read with warren buffet talking up wells-fargo..i think he forgot 2 neglect he owns 7% of the company...and that he still hold 20billion in cash...maybe he,s expecting lows...well that,s my opinion..its a rally sure atm..but my gut feeling is a down to come..

 

[Cartman]

i still believe that we will venture to new overall lows but not gunna sit around with my finger up my bum

i for one am glad you have relinquished this habit Nun, and put your efforts into more rewarding spiritual passtimes lol ---- :eek3:

 

[nunthewiser]

i for one am glad you have relinquished this habit Nun, and put your efforts into more rewarding spiritual passtimes lol ---- :eek3:

lol i should edit that to "fingers in my ears" as that post is very un nunly

amen

 

[Aussiejeff]

Its gonna be some crash in a few months when more figures come out and the punters realise what they thought was correct but got sucked in.

Umm?

Excuse me, but I thought the New World Order had decided gummint policy would be to perpetually bailout the biggest "market players" and thus in effect, "the markets" themselves, with gummint created cash because "they" are too big to fail?

Ergo "upticks" & "short" bans that will undoubtedly stay as permanent tools for "sustained growth"?

Hmm. Can't see too many "significant" pullbacks under such an orchestrated and world-wide "aggressive" policy?

Party on...

 

[moXJO]

If its going to drop it will drop in may. Looking back through the charts, the good old rule of sell in May and run away applies.
2003, 2004, 2005(started early) 2006, 2007(went sideways through May then down), 2008(bears dream) all were followed (or already falling) during or very close to may. So the probabilities of a decent fall seem within reason (mid May?)
I'm not to sure if the US is trying to BS the economy into kick starting or what but there is some dodgy data coming out of there. How long can you be force fed $hit and call it ice-cream for?

Better dust off those signs with 'the end is nigh' and start shaking em again

 

[nomore4s]

but who says some of the bears havent ? i still believe that we will venture to new overall lows but not gunna sit around with my finger up my bum waiting for it

trade whats been presented and boy this rally sure has been a doozy

lol, I never said the bears hadn't traded the rally, just that there are very good trading opportunities around atm - despite all the negativity from the bears.

I'm sure there are quite a few bears who have done very well out of this rally just as there are bears and bulls who have missed a good chunk of it.

 

[Wysiwyg]

You have to see it realistically.
Signed realistically...lol

You present a very good case but what do the blue chippers grow into from here? Where is the real demand coming from for their products and services?

signed, missed the bottom.

 

[Uncle Festivus]

What is going to be the catalyst, the panic to cause redemptions and people dropping shares again like they did last Novemeber.

The realisation that the practices of private individuals & investment banks going into debt to speculate with leverage is now being taken up by central banks around the globe?

So we have the situation of the indebted individuals and loose money shuffling banks being joined in indebtedness by ever expanding big government.

When the penny finally drops and people start to see government expediture severely cut back and rates & tax's start to rise to pay for it all, the second wave will already have commenced. Just not sure when the markets forward looking optimism will turn into present looking reality? There's a lot of goodwill & rhetoric and not much more driving this rally?

Remember that 2 weeks have past since we last saw the xjo at this level. It's not driving higher it's being reluctantly pulled higher by the manipulated US markets?

 

[dhukka]

If its going to drop it will drop in may. Looking back through the charts, the good old rule of sell in May and run away applies.
2003, 2004, 2005(started early) 2006, 2007(went sideways through May then down), 2008(bears dream) all were followed (or already falling) during or very close to may. So the probabilities of a decent fall seem within reason (mid May?)

I have no strong convictions about what the market will do in May, however the "Sell in May" adage is not supported by the data. Since 1985, the XAO rose 16 times in the month of May out of the 24 years worth of data, only declining one third of the time.

If you're not happy with that sample size, looking at the S&P500 data from 1950, May was positive 34 times and negative 25 times. Perhaps it gained credence in the 20 year period from 1965 to 1984 when it was negative 15 times out of 20. It is no coincidence that that time period almost exactly equals the horrible secular bear market form 1966 to 1982. So unless you cherrypick the data to prove what you want it to prove, the go away in May adage really has no basis at all.

 

[MS+Tradesim]

Dhukka,

What's your view on possible Asian economic bottoming/stabilisation/recovery over the next 6mths?

Thanks in advance.

 

[dhukka]

Dhukka,

What's your view on possible Asian economic bottoming/stabilisation/recovery over the next 6mths?

Thanks in advance.

Living in Japan I can tell you Japan is not stabilizing, although the rate of decline is slowing. I'll be in Hong Kong next month so that should be interesting to see how things are going there. I have no strong views about China, largely because the data is sporadic and dubious. Sorry, not much help.

 

[MS+Tradesim]

Sorry, not much help.

That's ok. Out of all the economic commentary around this place, I have the most respect for your views so I was just hoping you had some insight.

My are that the global recovery will be lead by Asia but I don't have the fundamental acumen to quantify that. Just the beliefs that USA has pretty much had its day and China will be leading the next growth stage. I do understand that the US is still the largest consumer but I think the next decade will be a major transitional period.

 

[dhukka]

My are that the global recovery will be lead by Asia but I don't have the fundamental acumen to quantify that. Just the beliefs that USA has pretty much had its day and China will be leading the next growth stage. I do understand that the US is still the largest consumer but I think the next decade will be a major transitional period.

That's as good a guess as any. Marc Faber said something interesting a while back. Since the credit crunch has morphed into a full blown cyclical recession and since the US is more of a service orientated economy, that the downturn would not be as sharp or as deep as the manufacturing economies of asia, as manufacturing is what suffers most in a cyclical recession. That also implies of course that the recovery will be sharper and stronger in these same economies once demand returns.

Of course, trying to pick when demand will return is tough, copper which is a decent indicator seems to be saying soon, I'm still skeptical, for demand to return the US has to be part of it, I can't buy the decoupling theory yet, China is still too export dependent. The US is showing signs of stabilization but only because the Fed is plugging every hole in a leaking boat. What happens when they take their fingers out?

 

[nunthewiser]

PERSONALLY

thinks japan will lead the world in those first to recover

i have posted my basic thoughts on this matter elswhere

 

[Aussiejeff]

The realisation that the practices of private individuals & investment banks going into debt to speculate with leverage is now being taken up by central banks around the globe?

So we have the situation of the indebted individuals and loose money shuffling banks being joined in indebtedness by ever expanding big government.

When the penny finally drops and people start to see government expediture severely cut back and rates & tax's start to rise to pay for it all, the second wave will already have commenced. Just not sure when the markets forward looking optimism will turn into present looking reality? There's a lot of [size=+1]goodwill[/size] & [size=+1]rhetoric[/size] and not much more driving this rally?

Remember that 2 weeks have past since we last saw the xjo at this level. It's not driving higher it's being reluctantly pulled higher by the manipulated US markets?

With gummints world-wide having a rapidly increasing "influence" over the use of mass-media "spin" to drive national agendas & economies, it is easy to see how ephemeral factors like "goodwill" & "rhetoric" can support those economies & markets sometimes almost to the point of being totally illogical.

Big Bro Political Rhetoric in the current MUST HAVE NOW age is a migh-tee power-fuel tool in the hands of cunning & clever propoganda ministers. KRudd is a supreme populist, and will massage our minds dailly through populist policy mass-media press releases. The Coalition need a complete re-invention or KRudd will be in power for generations...

To anyone who thinks they have the answers and can remotely change any of this luverrly, democratically elected, free civilised world setup - I say, GOOD FLAMIN' LUCK TO YA!!

I'll just ride this craziness out till my time on Earth is done.

 

[Wysiwyg]

KRudd is a supreme populist, and will massage our minds dailly through populist policy mass-media press releases. The Coalition need a complete re-invention or KRudd will be in power for generations...


I'll just ride this craziness out till my time on Earth is done.

Wrong thread and apologies if this isn`t funny , but here is our supreme populist (bless his righteous soul) doing some gardening. (i know, it has been shown before)

 

[musicman]

Interested to hear what everyone's thoughts are on the last few days of positive trading in the market.

Could this be signs of recovery, or is it simply a rally following Citi's news?

Part of me thinks that this could be signs of recovery, for a couple of reasons.

A) The majority are expecting it to just be a rally, so most investors are treating it with caution.

B) No one expects a recovery to come this early, yet recoveries always come earlier then expected. If they didnt, then everyone would get in at the bottom of the market.

C) Yes unemployment is rising, however the market generally starts to recover before unemployment hits its peak.

D) Australian Business have started to streamline their businesses, much before they came desperate like in the U.S. So by taking cautionary measures, they are going to be in a better position.

E) Interest rates are likely to fall. Combine this with the fact that businesses are becoming more streamlined, there will become a point where companies appear more profitable then low bank interest.

G) Consumers have really tightened their belt in the last 12 months and with lower interest rates, they surely have to becoming more comfortable and confident in their own financial situations.

H) The outlook for the market is bleak, but this has been factored in already.

I) The chances are, that the majority of the investors who sell on a panic, have already fled the market. Any investors that have remained in the market for the past 12 months, have probably come too far to turn back, and are prepared to stick it out, so we are unlikely to see another level of high volume panic selling.

These are just my personal views, and I must admit I am not a financial adviser or scientist for that matter. I do not know the score of pie, and all I am running on is a Tafe Certificate IV in team leadership.

In saying that, I would be interested to hear people's thoughts on my views.

My advice - just watch the 20 day MA. I'll be getting worried if the XAO falls below it for more than a couple of trade days. musicman

 

[Glen48]

This bloke has the answers:
http://www.funnyordie.com/videos/3daa472b6a/ali-g-on-the-economy-from-aligshow_fan

 

[Garpal Gumnut]

My advice - just watch the 20 day MA. I'll be getting worried if the XAO falls below it for more than a couple of trade days. musicman

Excellent comment musicman, and we are coming up to June when many folk rejig their portfolios to sell their dogs. If there is a drop below the 20d ma there may be a panic, and then there is the flu which if it becomes a pandemic may knock production in many countries by up to 60% for up to 8 weeks due to disruption to the labour market, on some estimates.

gg