Recovery or Dead Cat Bounce?

[MRC & Co]

Yes, that is my point Can. Cheers. You have to look how the market reacts to things iff you are going to trade, that or take a long-term fundamental view and put your nuts on it with a HUGE stop (unless you can time a great entry).

Wonder, you state the economic state is dire, the US currency will basically fold, yet you are not long the GOLD ETF (yes, you can afford that), and you are actually looking for LONGS? Shorting does not mean you will loose all your capital, and if you ARE DEFINATELY RIGHT, then you shouldn't be worried anyways.

 

[alphaman]

I'm sure there will be more bad news to come, but the thing is, even bears were expecting a rally. Everyone was waiting for a trigger of any sort. Now that we have got it, just trade it or leave it. Historically bear market rallies are very profitable on their own, not to mention further shorting opportunities later on.

 

[wonderrman]

how much have u actually traded w/m ------------ if u r not a seasoned trader, why do u speak with so much authority?? ------- that to me points to either a youthful ego ----- or someone who has actually had more experience than they admit to ---------- either way, i'm a little unconvinced ---

For the happiness of the masses, from now on believe that I am a 55 yr old multimillionaire who has been away the markets for years. What does a number have to do with anything if the argument I am putting forward is quite logical? What I have been saying regarding the underlying fundermentals of the economy and the US system has not had anything to do with trading, I am not making out that I am a seasoned trader ... except for my comment on holding BHP.

GOLD ETF (yes, you can afford that), and you are actually looking for LONGS? Shorting does not mean you will loose all your capital, and if you ARE DEFINATELY RIGHT, then you shouldn't be worried anyways.

Yes, but what I have been saying on this thread could take a few years to eventulate, therefore I would be waiting a long time for a return of money. Because I have not much capital I need to try and make money in the short term, that is why I would perfer to idenifity uptrends occuring on the stock market were patterns are forming and there is greater chance I can make money on in quick period. That BHP chart is the perfect example. If I go long the gold EFT, or short the the market as a whole, I could be waiting a long time to see the trade come to fruitration. I would prefer to direct my limited capital into a trade that has a better chance of coming to fruitration in a quicker period.

 

[Uncle Festivus]

I think this DCB might have some legs, especially if they co-ordinate the market 'leak' announcements etc, because some of the counterparties like Goldman Sachs etc are getting some big payouts from the taxpayer stimulis via AIG. Each one will studiously put forward their 'profit' results, all making money if you don't count the bail out money's, greasing the bull bounce? Only when the real economy stats becaome overwhelming eg new unemployment consistently coming in at 600k plus PER MONTH, will the market finally capitulate to new lows, and a final low?

http://www.marketwatch.com/news/sto...x?guid={74DD6FC0-D2D8-4925-8B84-F8E4BEBEEADB}

American International Group said over the weekend it had paid over $100 billion of its bailout funds to U.S. states and international banks including Goldman Sachs, Deutsche Bank and Societe Generale.

 

[grace]

One thing we can be more confident of is that the current deleveraging will continue and therefore in real terms it's hard to see last week's low as being the bottom.

In nominal terms, who knows. That depends on how the current deleveraging cycle plays out.

Kohler was on Inside Business on ABC on Sunday saying exactly this. He estimates it will take a few years for the deleveraging to play out. I hope so!

 

[Cartman]

For the happiness of the masses, from now on believe that I am a 55 yr old multimillionaire who has been away the markets for years. What does a number have to do with anything if the argument I am putting forward is quite logical?

just pulling yr chain 'wonder' ---- my comments werent anything to do with yr economic arguments, which all seem logical in essence (although not particularly tradeable on a short term basis) --------- i was just kind of amused at u calling Mirc "delusional" ----

 

[nomore4s]

One thing we can be more confident of is that the current deleveraging will continue and therefore in real terms it's hard to see last week's low as being the bottom.

In nominal terms, who knows. That depends on how the current deleveraging cycle plays out.

The thing is, I think most of the deleveraging in the stock market has already taken place - hence the falls and speed of the decent. All the people leveraged to the eye balls in the stock market have now exited - think Storm, Opes etc etc. And people will be very slow to leverage like that into the stock market again. So we could see more deleveraging in the real economy without too much effect to the stock market.

The other thing to keep in mind is the stock market bottoms well before the real economy - it certainly did during the great depression.

IMO the real economy needs to start to catch up with the doom & gloom of the stock market. There has been a lot of very negative scenarios talked about and put forward and the stock market might have been priced for some of these worse case scenarios. But as yet we haven't seen anything close to this in the real economy especially in Aust - let's be honest, so far we have only seen a mild recession. Until we see some real deterioration in the economy I think the falls are over done - hence the chances of a very strong bear market rally. Also ultra bearish views seem to be the standard view of the media and general public, which normally indicates a turnaround of some sort.

Now before I get flamed and called a moron, I'm not calling an ultimate bottom to the market, new bull market or that we won't get a serious recession/depression etc etc. It's just in my view the market looks to have priced in something close to a depression but we are yet to see anything near to that. In fact my business is going so well I've put on 2 new staff in the last fortnight - and I only had 7 staff on before that.

Don't let your bearish views blind you to the opportunities that are appearing in the market and that the strong bear market rally will present, just manage your risks.

 

[nunthewiser]

Don't let your bearish views blind you to the opportunities that are appearing in the market and that the a strong rally will present, just manage your risks.

BINGO and well said

i personally think we havent seen OVERALL bottom yet on the ASX but that aint gunna stop this norty nun from ejoying the spoils that get tossed my way in the meantime

cheers

 

[Trembling Hand]

but a catalyst is needed. You don't think the email would be it.

Nah we were on our way days before C news. any one with a offer in the market would of felt the buyers about the 5th - 6th

 

[wonderrman]

Don't let your bearish views blind you to the opportunities that are appearing in the market and that the strong bear market rally will present, just manage your risks.

Don't worry I'm not going to put aside the possible opportunities. What I've stated in this thread could take years to play out, in the near term we could see rallies of 40%, 60% etc. before we truely get to the crux of the problem. As I said my trading is purely based on identifiying clear uptrends, the trend is your friend.

 

[Pythagerous]

After yesterday afternoon when the market started to trend south, I thought that the bubble could have burst, but the All Ords is strong today and heading into the vacinty of 3400.

As i see it, from here there are 3 main possibilities.

a) The market continues to head up, and we are past the bottom
b) The market may continue up for a bit, but comes back down to 3100
c) There is a huge sell off, and the all ords head towards 2800

Take your pick.

 

[enigmatic]

Still expecting it to rise up to 3450 or maybe 3500 off the Bollingerbands and then stablise arround 3000-3200.
But we will see if it heads north and stays above the 21Day MVA for a while i might need to buy in.

 

[wonderrman]

a) The market continues to head up, and we are past the bottom
b) The market may continue up for a bit, but comes back down to 3100
c) There is a huge sell off, and the all ords head towards 2800

I don't know the precise movements of the market really in the near term. I've laid out my thoughts, but they could take a few years to eventuate and we could see many a bear market rally in that period.

This could be a massive bear market rally though so I'm just working on a trade by trade basis ... judging each and everyone on it's merits. The trend is your friend.

 

[sammy84]

I was expecting the market to make one more fall lower for the bottom to be in place, but after todays close I am starting to think this Cat has some very strong legs.

 

[sammy84]

Who knows the precise movements of the market really in the near term.

Technical analysts can have a pretty good stab.

 

[drsmith]

The thing is, I think most of the deleveraging in the stock market has already taken place - hence the falls and speed of the decent. All the people leveraged to the eye balls in the stock market have now exited - think Storm, Opes etc etc. And people will be very slow to leverage like that into the stock market again. So we could see more deleveraging in the real economy without too much effect to the stock market.

The other thing to keep in mind is the stock market bottoms well before the real economy - it certainly did during the great depression.

IMO the real economy needs to start to catch up with the doom & gloom of the stock market. There has been a lot of very negative scenarios talked about and put forward and the stock market might have been priced for some of these worse case scenarios. But as yet we haven't seen anything close to this in the real economy especially in Aust - let's be honest, so far we have only seen a mild recession. Until we see some real deterioration in the economy I think the falls are over done - hence the chances of a very strong bear market rally. Also ultra bearish views seem to be the standard view of the media and general public, which normally indicates a turnaround of some sort.

Now before I get flamed and called a moron, I'm not calling an ultimate bottom to the market, new bull market or that we won't get a serious recession/depression etc etc. It's just in my view the market looks to have priced in something close to a depression but we are yet to see anything near to that. In fact my business is going so well I've put on 2 new staff in the last fortnight - and I only had 7 staff on before that.

Don't let your bearish views blind you to the opportunities that are appearing in the market and that the strong bear market rally will present, just manage your risks.

It's the deleveraging in the real economy that concerns me and it's medium to longer term impact.

From this point I feel the best we can hope for is a market along the lines of what happened in the years following the Feb 1988 bottom after the 1987 crash.

 

[CanOz]

I was expecting the market to make one more fall lower for the bottom to be in place, but after todays close I am starting to think this Cat has some very strong legs.

Yep, this is certainly adding some positive information for a continued rally.

Nice move all day long with a strong close. Be interested to what the SPI traders saw today too.

CanOz

 

[Largesse]

this heady optimism is worrying.
what has changed in the last week? NOTHING


see you all at 2500

 

[CanOz]

this heady optimism is worrying.
what has changed in the last week? NOTHING


see you all at 2500

See you there too, a few dollars better off.

CanOz

 

[Largesse]

putputputputput