Recovery or Dead Cat Bounce?

[Beej]

Hi kennas.

I was actually ready to invest some spare loot into CBA yesterday at open but had a mind to *paws* a little while and see which direction the market was going to take post open.

I'm happy I held off and shorting ain't my game, so it's back to the tiddly-winks for now.

Good luck,


aj

So did you buy any CBA back in Jan @ $24?? What about 2 weeks ago @ $26? The retail rights issue they did looks pretty good atm if you took that up as well! Any of those 3 would have given you a 30%+ profit through this last (current?) rally.

Cheers,

Beej

 

[insider]

Hmmm

Now I'm wanting to buy a car.....
Do you have any yellow ones? Toyota?

View attachment 28874



I don't care about how in-efficient the cars are Ford can you sell me or not a yellow car?
View attachment 28876



Bloody hell just want to buy a yellow car Nissan!
View attachment 28875



No I don't want to buy a bloody white car!
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Yes ... yes yes I don't care who the maker is. I've found a yellow car..
Now That one on the bottom left....... Yes.........

What ......... you're not getting it out for me?
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No wonder they're not selling cars......

.

They will just sell this old stock with some new mods just to call it the 2010 model.... While they AXE jobs... The new Ford KA will now come with a crappy pinstripe....

 

[Bill M]

So did you buy any CBA back in Jan @ $24?? What about 2 weeks ago @ $26? The retail rights issue they did looks pretty good atm if you took that up as well! Any of those 3 would have given you a 30%+ profit through this last (current?) rally.

Cheers,

Beej

Anybody who didn't take up the retail issue for $26 would have to have rocks in their head. The share price was trading at around $28 the day before the payment was due, easy $2 profit. As it turns out it is now a $9 profit. Even if you didn't have the money you could have sold what you had for $28 to $29 and picked up the issue at $26, a simple transaction.

 

[nomore4s]

Anybody who didn't take up the retail issue for $26 would have to have rocks in their head. The share price was trading at around $28 the day before the payment was due, easy $2 profit. As it turns out it is now a $9 profit. Even if you didn't have the money you could have sold what you had for $28 to $29 and picked up the issue at $26, a simple transaction.

Too true Bill, but fear stops most people from buying at the lows.

 

[roofa]

Anybody who didn't take up the retail issue for $26 would have to have rocks in their head. The share price was trading at around $28 the day before the payment was due, easy $2 profit. As it turns out it is now a $9 profit. Even if you didn't have the money you could have sold what you had for $28 to $29 and picked up the issue at $26, a simple transaction.

I didn't take it up Bill, but that's because I wanted more than 384 shares on offer for $10,000. So I bought on market in Jan for around the $26. Just got the interim dividend cheque in the mail today for $1.13 per share.

 

[Bill M]

I didn't take it up Bill, but that's because I wanted more than 384 shares on offer for $10,000. So I bought on market in Jan for around the $26. Just got the interim dividend cheque in the mail today for $1.13 per share.

Well done and you got the divi too.

 

[korrupt_1]

How much will this cost the World?
http://www.hyd-masti.com/2009/03/unsold-cars-from-around-world-nissan.html

that's a nice link Glen48...

Here's one of the car import/export yard in Adelaide off Google Earth...

GPS co-ord:
Long: 34 °46'36.57"S
Lat: 138 °29'2.44"E

 

[gfresh]

So what's the verdict? Stocks such as WBC have risen for 14 straight days.

If this is the end of the bear market, it all seems a little too easy, therefore I don't believe it is sustainable for much longer.

Surely a bit of a pullback (say to 3300) would be expected very soon, even if this rally proves to be longer lasting.

 

[MR.]

So what's the verdict?

No doubt many markets get the lead from the US. Volumes on the All Ords have been dropping the last few days but the climb continues.

So many countries get the lead from the US which also seems to be in worse shape than the rest. Has anyone else thought the shares there are being manipulated? Ie: sudden short bursts pushing the price of stocks up! Another example last night. Would it be out of the question? Perhaps with intentions to recoup some money or just to stabilize the markets? "why not" Everything else is being tried!
http://finance.yahoo.com/q/bc?s=^GSPC&t=5d&l=on&z=m&q=l&c=

I know, it's another conspiracy, but if there was ever a reason, wouldn't now be a good time?

thoughts?

 

[alphaman]

Surely a bit of a pullback (say to 3300) would be expected very soon, even if this rally proves to be longer lasting.

The rally will end, but it could last longer than you think. XJO hasn't even gone near 38% retracement yet. Not saying prce has to retrace 38%, but we haven't really had any decent sized correction yet.

 

[Sean K]

thoughts?

While the bulls panicked and sold through fear on the way down, bears are doing the same thing now: Ditching shorts, and standing aside while the risky cash come back in to the market and starts chasing the potential short term gains. Was a no brainer really. Those who have stood on the side with their hands behind their backs should take this as a lesson for the next time. And a special mention for the economists: This is the stock market! Not the economy! The stock market does not run on current economics, but future perception of economics! If the bottom is 12 month away, then we may have already seen a bottom in the market!!!



Having said that, the market will now see some incredibly bad news on the horizon and start pricing it in ...

Lower lows anyone?

lol

 

[Pythagerous]

After what we have seen over the last couple of weeks, what is everyone's consensus. Recovery or Rally?

I will stick with my call from 13th of March, to say that this is the recovery.

 

[mitch87]

i agree kennans, the stock market derives its current position on future values and perceptions, however, our recent rally here in OZ and in the USA was mostly kicked off right after the big news that the us gov was going ahead and buying up the bad debts from the banks...$1 trillion worthi think the figure was, this is what spurred the recent rally, therefore, not always does the stock market price in everything before it happens, i hope i am wrong, but i have a feeling we have not seen the bottom.With a further contraction to be announced soon for US GDP of around 6%, adding to the 4q08 6.6% decline and i think 2% in 3q08, totalling 14.8% so far, previous large recessions and depressions were higher than this, and with forecasts of a further 5-7% contraction of GDP in the us in 2q09, i just dont think the stock market has priced this in. this recession is huge, it will take the better part of 2009 to really get through this bad debt stuff from the banks, i believe closer to 1q10 we will see news that the gov is finally getting to the bottom of all that, and THIS is when we will see the economy start to recover.SO, the market will price this further contraction in, maybe bottom around june/july/august and start the period of consolidation from here on in, and as we see economic turnaround by 2q10, the stock market will have already stabalised and began the next bull market rally......................thoughts?? Not so sure about the XAO, although it is fairing better than most, exports are still in heavy decline,and once the extent to this is realised soonish, by an official recession and more dire forecasting of our exporting for the remainder of 09, the market will adjust accordingly and maybe fall to around 2,800 or so.....its still going to be tough for aussie exports until the us picks up again

 

[Wysiwyg]

i agree kennans, the stock market derives its current position on future values and perceptions, however, our recent rally here in OZ and in the USA was mostly kicked off right after the big news that the us gov was going ahead and buying up the bad debts from the banks...$1 trillion worthi think the figure was, this is what spurred the recent rally,

And all longs from the previous low were shaken out beforehand.That`s what I dislike about the game.It is so orchestrated.

 

[Sean K]

And all longs from the previous low were shaken out beforehand.That`s what I dislike about the game.It is so orchestrated.

We all need to stop being pawns in this game and start seeing the market more clearly.

Stop thinking short term economics and start thinking about the future. The future! That's what the stock market does.

Pick stocks undervalued in a sector that will go up.

Trade charts that have hit bottoms (or tops) and are breaking up (or down).

Trade charts that are trending up (or down).

We may have seen a bottom (or not) but trade the market! Not the current economics! I see threads here now about cars sitting in grave yards and think wow! what an opportunity! I see the price of houses going pear shape and think wow! what an opportunity.

For those who have been prepared for this event and have some cash I think - wow! what an opportunity!!

(not to say the worst is in, or course, but wow! if it goes lower, what an opportunity!!)

 

[cutz]

That’s good and well to say Kennas but in reality there is a small section of the trading community that has a requirement for the majority to be trading the current news.

 

[Sean K]

That’s good and well to say Kennas but in reality there is a small section of the trading community that has a requirement for the majority to be trading the current news.

Yes, there is. But we don't want ASF members to be coping it from the small section do we?

 

[Uncle Festivus]

If you had access to unlimited money ie The Fed, wouldn't you be 'tickling' the market at the most opportune times, like this morning's finish? They only have to get past some technically important levels for the tech heads to jump in again and to become self perpetuating until the next set of sobering data eg unemployment. Then again, during the bull, most if not all negative data was comprehensively discarded whilst blinded by the herd mentality & greed.

You could take it as a sure bet that the equity market will be artificially supported by the 'firm' at least in the short term despite the fundamentals? Just don't know how long they can do it before they get found out, like everything else?

 

[nomore4s]

For those who have been prepared for this event and have some cash I think - wow! what an opportunity!!

I agree Kennas.

I see alot of posts on this site now about how the fundamentals suck etc, etc but I'm not seeing a lot of posts from these same posters about how they will make the most of this opportunity. Most it would seem are blinded by fear. Lately the bears remind me of the bulls at the top of the bull market raving about how it will never end etc etc.
Must of the fundamentals the bears are banging on about are now well known and understood by the markets - there are still down side risks but the problems regarding the GFC are known and to an extent understood.
The other thing is the economy (especially Aust) needs to catch up to these ultra bearish views, we are yet to see anything even close to these views play out, so far this is nothing like a depression and imo until we start seeing the signs of this extreme view in the real economy we may have seen some sort of a bottom.

Look at BHP, CBA, WBC all these blue chips and others are now about 40-50% off their bottoms. There is a very real chance these stocks will not revist these lows and may trade sideways above the lows now.

Opportunities like this come around very rarely, by preparing now and managing your risks it could be life changing imo. Trade what is presented to you by the market and don't let your bias (either way) cloud your judgment as in a few years you could be kicking yourself for missing an opportunity of a lifetime.

 

[Sean K]

Here is just one chart for you economic bears proclaiming armageddon at every chance and who have scared off some punters from making the most of the terribly oversold state of the market.

This is but one simple example of the opportunties that have unfolded.

I'm not saying we have seen a bottom, in the slightest, but I'm saying:

TRADE THE STOCK MARKET, NOT THE ECONOMY!