So is the 'correction' over?

[powerkoala]

Another red in europe and dow jones
it is true.. this is dead cat bounce...
gold down to 650 now... crude lost another 1 dolar
all metals back to south....
another red day for us tomorrow...
what a pity....

 

[andrewkmz]

Bear is back! Metals and gold all down tonight so far. All Ords will have another dive tomorrow.

 

[brerwallabi]

Corrections tend to be 3 waves, so one would expect a bounce before a further down leg.

Are you always a bear?
But I tend to agree with you.

 

[yogi-in-oz]

Does that contrast to the below? or is the above only Minor Negative cycles? or the below is the exception which will go agaisnt the downtrend?



thx

MS

Hi Michael,

Analyzing two different animals ..... speed and direction
of XJO has NO affect on the analysis of the individual stock,
ZFX ..... so, essentially we treat them as totally divorced
entities, when we analyze them.

In contrast, movements in ZFX will have some small affect
on the outcome of XJO on the same day.

happy days

yogi

 

[krisbarry]

After yesterdays rise on the ASX, I reckon the correction is over. A healthy 6% fall is all we need just to keep things on track

 

[nick9]

Re: Q for Tech/a

Hey Tech/a

Shouldn't you calculate your Fibonnaci numbers from March 2003.....when the current bull run started. By picking and choosing segments of the market to apply your numbers to, aren't you overlooking the bull run as a whole entity?

 

[tech/a]

Hi Nick.

Your right.

Fib can be calculated from any significant high and significant low.
It then is dependant on significant significance.

Ofcourse it then becomes timeframe dependant.
In the longer timeframe for both Fib and Trendline analysis this is mearly a correction and still holds the index very bullish.

Short term seems to be everyones issue currently.

 

[mit]

Take the resource stocks out of the market and the market was still down yesterday. I think a real measure of the end of the correction is where the recovery is more broadbased.

A key will be today as the resources were down again overnight the spi is predicting a 20 point drop today.

MIT

 

[GreatPig]

I was looking at the XAO data from 1984 (as provided by Yahoo) and doing some calculations on the average rate of gain over different time periods. While many of you may know this already, I found it quite interesting.

From the start of the current bull run in 2003 till now, the average rate of gain has been around 19% pa.

From where it returned back to just above 1200 in late 1990 up to the 3000 mark just before the current bull run, the average rate of gain was about 7.7% pa.

And during the period from 1985 to the Oct 1987 crash, the average rate of gain was about 51% pa!

So while the current bull run has had high annual gains, they're nothing like the run up to the '87 crash.

I also find a close-up of the actual crash chart interesting. The big down day is 25%, the three down days just after that around 6.5% to 7% each. What's really amazing though is that spike back up two days after the big down day. I wonder how many lost in the big fall, then bought back in near the high two days later only to lose another heap by the end of that day!

Interesting as an observer, but as they kinda say, a nice time to visit but I wouldn't want to have lived there .

Cheers,
GP

 

[clowboy]

Great post Greatpig,

Always good to look at things that have been pushed aside in our minds, especially with a fresh view.

Thanx

 

[Sean K]

Where do you get your charts GP?

 

[coyotte]

Would not be supprised to see a 50% (short term) recovery in resourse stocks

Specs would be all out now --- bottom feeders move in ---- those still holding from the highs , bailing out as they break even ---- then DOWN again

 

[LPA]

Well the correction is certainly not over yet! Still holding during this roller coaster ride

 

[GreatPig]

Where do you get your charts GP?

From the AmiBroker software I use.

Cheers,
GP

 

[GreatPig]

One figure I omitted was the average rate of gain from the start of 1985 till now, which is about 9.4%.

GP

 

[Ageo]

One figure I omitted was the average rate of gain from the start of 1985 till now, which is about 9.4%.

GP

compared to the 50% gain leading upto the 87 crash its not that big, i still think with the 100 million US baby boomers having alot of there funds with mutal funds, super etc.. and wont be retiring until 2010 i think we will still see the bull continue along with short term corrections. But nearing that time i think we will see past history.

 

[specman]

Crucial economic data will be released in the US in about 2 hours.The core PCE index which the Fed considers more accurate than the core CPI for measuring inflation will be watched closely by the market.

Considering that it was the higher than expected core CPI that triggered the current correction,this data is going to be crucial in determining which direction we will be headed in the short term.

 

[IGO4IT]

FTSE is up again tonight already 25 points even that metals look a bit stable (copper is slightly down) & didn't recover all what's lost.

Gold is also looking promising on $653 to make it consistent 2 days rise.

I don't know how to define "correction is over" but I think regardless of metals prices, market will still watch from side lines for few days before attempting to trust the current uptrend again. Personally I'm half out waiting for a disaster ...... & the other half that is in is just waiting for first half to be proven wrong!

cheers,

 

[specman]

Just released in the US.The core PCE deflator rose 0.2%,not the 0.3% that many feared and is considered indicative of contained inflation.Some positive news for the markets.

 

[chromatic]

From Yahoo/Reuters:

"Traders noted that the precise PCE price index was almost high enough to be rounded up to 0.3 percent, which would have been a more troubling inflation reading."

http://biz.yahoo.com/rb/060526/markets_stocks.html?.v=4

The U. of Michigan consumer confidence data is also due to be released soon.