Recovery or Dead Cat Bounce?

[nunthewiser]

Cheers canoz .. now check out BHP chart

this ducky waiting in anticipation

 

[CanOz]

Yep, could be an expanding triangle or an H&S Pattern.....or of course nothing at all! I'll put it in the "shorts pending" list anyway!

Cheers,


CanOz

 

[Uncle Festivus]

CanOz, I think that pattern is referred to as a [FONT=Arial,Helvetica,sans-serif]Reverse Symmetrical Triangle (Megaphone Chart Pattern)[/FONT]? Usually after an advancing phase, but bearish in the end? Who knows in this climate?

 

[Garpal Gumnut]

CanOz, I think that pattern is referred to as a [FONT=Arial,Helvetica,sans-serif]Reverse Symmetrical Triangle (Megaphone Chart Pattern)[/FONT]? Usually after an advancing phase, but bearish in the end? Who knows in this climate?

Festive , I was never in to synchronised swimming so wouldn't have a clue what a reverse symmetrical without lippy looks like, but I do respect the all ords and trendlines, and would appreciate yours and others opinions on the long term trendline of the xao.

I feel this is a dead cat bounce and with time it will stabilise at 3000 or just under.

gg

 

[nunthewiser]

CanOz, I think that pattern is referred to as a [FONT=Arial,Helvetica,sans-serif]Reverse Symmetrical Triangle (Megaphone Chart Pattern)[/FONT]? Usually after an advancing phase, but bearish in the end? Who knows in this climate?

LOL im not up with the lingo but will agree with your terminology as my naming it as a "watch this sucka fall soon " pattern is prolly not as technical

 

[CanOz]

CanOz, I think that pattern is referred to as a [FONT=Arial,Helvetica,sans-serif]Reverse Symmetrical Triangle (Megaphone Chart Pattern)[/FONT]? Usually after an advancing phase, but bearish in the end? Who knows in this climate?

According to the The Pattern Site you are quite right, but Pattern Explorer calls them Expanding Triangles.

Usually associated with markets tops & bottoms.

Cheers,


CanOz

 

[Dowdy]

It's a DCB

You can't have a recovery when all the crap is still in the system. Companies need to fail, assets need to be wiped out (the bad ones) and housing needs to fall to return to normal market price - not government manipulated price

 

[light bearer]

Yeah, it certainly is very gloomy and it sure has taken a long time to get where it is. You can study all the trends and cycles and so on but what may be of most significance is plain human psychology.

People are not in the long term going to change there spending habits. What is going to happen is that greater financial regulation is going to stop people from getting into such deep dodo.

People are borrowing more money for houses as the Australian housing market is not doing to bad with the government incentive. Businesses need to borrow money to make money. Governments are borrowing money to fund the stimulus packages. Money sure makes the world go around and when the worlds money starts moving more quickly it boosts confidence. Consumers in the US are back spending. Not every one is going to hide underneath their beds forever! Not everyone is a Casper Milktoast!

Hopefully with all this free trade continuing to go on poorer people around the world are going to be lifted out of poverty. With more people (consumers) spending there is going to be more work and prosperity for everyone except for the people still under their beds.

A green revolution and medical breakthroughs from genetic research are going to save us all financially as well as the very planet we live on.

America started manufacturing lots of cars after World war 2 and that got the world economy going after the great depression. The internet revolution directed us out of the bad recession in the 1990's (remember the Australian stock market fell by half within a month). It's no different this time and health and green technology are places to be employed and to have money invested.

IT's still going to be painful as life is at times. However in the long term the market is a winner. I'm regularly investing in value and letting compound interest work its wonders. In the long term the market is predictable and there is no guessing.

I think the dead cat impacted the ground with such force as to almost bury itself. Things are going to pick up more towards the end of the year.

 

[Sean K]

Does a dead cat necessarily mean new lows will be made later, or can we have a bear bounce, head back towards the lows, not take them out, and then head sideways for a time and onto recovery?

 

[CanOz]

Does a dead cat necessarily mean new lows will be made later, or can we have a bear bounce, head back towards the lows, not take them out, and then head sideways for a time and onto recovery?

The name of this thread is confusing. Recovery refers generally to the economy, and Dead Cat Bounce, usually refers to the index, or individual equity price.

Sure, both are related but the equity markets usually price in an economic recovery well before it happens...perhaps thats the thread started had in mind.

Perhaps, "New Bull market or Bear Rally?"

Cheers,


CanOz

 

[wonderrman]

People are not in the long term going to change there spending habits. What is going to happen is that greater financial regulation is going to stop people from getting into such deep dodo.

People changed their spending habits in the first place because banks/credit card/mortgage companies aloud them to. People have a very short memory, or don't know anything about market history. Banks have been burnt and hit hard by the current crisis, do you really think they are going to return to lending out so much in the next bull market? I highly doubt it.

I don't think many people know why there was such greater lending in the first place. Since the gold standard was removed, a new asset had to emerge as the international reserve, the US took it's place. Because of this diversion, a huge account deficit in the US emerges. It sits at around $2b per day, and it finds its way into banking systems around the world as new deposits. Enter the Fractional Reserve banking system multipler of 10 times new deposits. This means that banks somewhere in the world have been given the capacity to increase their loans by $20b per day, provided that they can find suitabe borrowers. And they will what ever using what ever means.

Believe me when I say, I'm 100% sure that after this crisis the US dollar will not be the world's reserve. Google an article called Chaos Chronicled by Alf Field for more info on the FRBS and how it manages deposits with banks, to long and to late to write about here.

People are borrowing more money for houses as the Australian housing market is not doing to bad with the government incentive. Businesses need to borrow money to make money. Governments are borrowing money to fund the stimulus packages. Money sure makes the world go around and when the worlds money starts moving more quickly it boosts confidence.

Mate another generalisation. What happens when there is not enough money for the government/businesses to borrow? The stimulus packages are tiny compared to GDP, acc deficit etc. They will do nothing! They're small. Rudd and Obama are simply pissing in the ocean with their stimulas packages. They're a waste of time will have little, if any effect.

A green revolution and medical breakthroughs from genetic research are going to save us all financially as well as the very planet we live on.

They're some great hopes mate! Do you have any inside info that I don't? From what I've read we're no closer to finding a problem to stop CFC emissions, we're no closer to stopping the ice cap's melting which will cause sea levels to rise. Making assumptions is a fools game.

In the long term the market is predictable and there is no guessing.

That is utter bs. So I'm guessing you predicated the downturn óf '08? Please tell me how you can sustain your views that "ín the long term the markt is a winner" and "I believe we are in for a massive increase in prosperity right around the world as usually the next boom will surpass the last." Do you have any evidence to support your claims at all.

Things are going to pick up more towards the end of the year.

Again, any reasons for this to occur? Or is it purely a guess based on no fact or evidence at all.

I'm sorry if I'm coming across as rude or something like that but I'm sick of hearing and reading such uninformed generalised garbage. I would suggest that you take some time learning a bit of market history and how this crisis actually occurred.

 

[alphaman]

Does a dead cat necessarily mean new lows will be made later, or can we have a bear bounce, head back towards the lows, not take them out, and then head sideways for a time and onto recovery?

The cat is dead, so no recovery. But of course we know markets do eventually recover. It just takes a long time.

Statistically this rally is too big to be a bull market rally. In a bull market you get smaller but sustained rises.

 

[CanOz]

Well said Wonderrman.

I think its safe to say there are a few more 'shoes to drop' yet. I think we'll see another new low before Christmas. We're in a downtrend, and we need some serious numbers to be taken out before we can think otherwise.

Check out that pattern site for Thomas Bulkowski's index targets, looks like he is thinking of another low as well!

Cheers,


CanOz

 

[dhukka]

dkukka; you took the words right out of my mouth! A company that (supposedly) creates a profit after having $45b injected into it is not something I consider positive. I will cheer and celebrate when these companies turn a profit without the taxpayer bailing them out every few months with another lousy 20b here, 40b there...

I also find it funny that people can conclude a bottom in this bear market based solely on 3 trading days. It's more logical to consider this a simple rebound after a series of sharp sell-offs. It's also a sigh of relief as the fact that nothing worse had come out of the market in the past few days and all the bad news has been factored in - for now. The better question is how many consider this another bull trap similar to the rebound after the sell-off in November?

It is amazing how quickly sentiment can turn, everyone was talking about DOW 5000 and now after a few days of gains we're off to the races again. We were overdue for a decent sized bounce, we didn't really get anything of significance in December. Tough to see this as any more than a bear market rally though. Might carry through to April until the market sees how dismal 1Q09 earnings are the banks need a fresh round of capital injections

 

[light bearer]

I appreciate everyones comments. I am here to learn and to 'share' (ha ha

I have done some research into genetic engineering at Uni and i am quite certain it is going to make great changes in our life times and within the next few years. Sorry, I am not writing complex essays here - just bouncing a few ideas around.

Science and Technology have continuously given the market a boost through new products and innovations. Everyone knows that. It is interesting to see how much government investment is going this way.

I didn't allow *#!@$$% Finance to put my money into ABC Learning because i could see from a Four Corners report how ABC Learning Centres overly aggressive tactics against competition was going to have bad repercussions. I was basing my decision on more a gut sense rather than all the financial positive indicators.

I have just sacked my financial advisor(leech). I have some managed funds and i believe i am paying them enough to manage my investments. I hope to became more market wise as i have taken control.

It's good to have as many technical market indicators as you can and to have all the necessary facts. What you then must do is meditate on the 'hara' an area an inch below the belly button as is the common practice of Japanese business men and to from there realise an answer as to what action to follow.

Hope this helps

 

[derty]

What you then must do is meditate on the 'hara' an area an inch below the belly button as is the common practice of Japanese business men and to from there realise an answer as to what action to follow.

So you are saying a bit of navel gazing will get us out of this mess? :

btw, I think nanotech is going to fuel the next great boom.

 

[Pythagerous]

There more I think about it, the more I think that this may not neccissarily be a dead cat bounce.

After reading this thread, it would appear that 75% of the people that have commented, view this as a DCB as opposed to a recovery. If the majority of people are expecting this to be a dead cat bounce, then why is the market continuing to move upwards sharply.

I would imagine that those who have panicked previously and sold, are too scared to put there toe back in the water just yet, and with the majority thinking that it is just a dead cat bounce, there wouldnt be too many others rushing to get in their.

The question is, who is forcing the market up. Surely it is not your average mum and dad investor, as they are too scared to invest. If it is simply traders forcing the market up, they are just shooting themselves in the foot, as it appears the majority of people arn't buying it. The more I think of it, the more I have a sneaking suspicion that this is not just a rally, established by people trying to take a quick profit.

 

[enigmatic]

Just thought i add something, if you look at the last few DCB you will noticed they too increased over numerious days after the bounce then stablised for the next 1-3months later declining again.

 

[CanOz]

There more I think about it, the more I think that this may not neccissarily be a dead cat bounce.

After reading this thread, it would appear that 75% of the people that have commented, view this as a DCB as opposed to a recovery. If the majority of people are expecting this to be a dead cat bounce, then why is the market continuing to move upwards sharply.

I would imagine that those who have panicked previously and sold, are too scared to put there toe back in the water just yet, and with the majority thinking that it is just a dead cat bounce, there wouldnt be too many others rushing to get in their.

The question is, who is forcing the market up. Surely it is not your average mum and dad investor, as they are too scared to invest. If it is simply traders forcing the market up, they are just shooting themselves in the foot, as it appears the majority of people arn't buying it. The more I think of it, the more I have a sneaking suspicion that this is not just a rally, established by people trying to take a quick profit.

Bear markets rally sharply because of short covering. Don't forget whos driving this market, and they still allow shorting. If the bears continue to short and then get caught, the rally will still get some good sharp moves up.

CanOz

 

[wonderrman]

There more I think about it, the more I think that this may not neccissarily be a dead cat bounce.

After reading this thread, it would appear that 75% of the people that have commented, view this as a DCB as opposed to a recovery. If the majority of people are expecting this to be a dead cat bounce, then why is the market continuing to move upwards sharply.

I would imagine that those who have panicked previously and sold, are too scared to put there toe back in the water just yet, and with the majority thinking that it is just a dead cat bounce, there wouldnt be too many others rushing to get in their.

The question is, who is forcing the market up. Surely it is not your average mum and dad investor, as they are too scared to invest. If it is simply traders forcing the market up, they are just shooting themselves in the foot, as it appears the majority of people arn't buying it. The more I think of it, the more I have a sneaking suspicion that this is not just a rally, established by people trying to take a quick profit.

We’ve seen a bear market rally all ready back in Nov/Dec were the market rose by 20%. The same thing is happening now, but who knows how long it will go for. Could be weeks or months. I bet your bottom dollar that as soon as we get some very negative news we will revert back to the down trend.

I feel like I have repeated myself a million times over. The world is too leveraged and this leverage has to be undone. The market will continue to go down because the US cannot do anything about it! They either face the problem of allowing the market to play its course or try and do something about it by injecting money into the economy, which will debase the currency and make the dollar worthless.

Actually, on the topic of how opinions can change. I read on the Age website that there is now “confidence that the US has reached the bottom and markets will rebound because eco activity will increase”, something along those lines. I can’t believe how stupid some people are. What good news has seen over these past weeks to indicate an economic turnaround? Absolutely none! Citigroup, which is bankrupt except for the stupid intervention of people on Capital Hill, leaked an email saying they’re profitable for the first two months! I thought they said they weren’t going to cut their dividend? But I’m pretty sure they have. How can everyone believe any of these morons after what we’ve just been through? Let’s just wait to the Q1 results, all the people who think we’ve ‘seen the bottom, or that this is affirmative for a rebound will hit rock bottom yet again. Don’t be suckers boys! The market will play anyone who engages it in times like these, take a step back and look at what is actually happening. Read a bit and learn how this crisis actually occurred.