The Bear had come

[salz]

In my opinion, the Bear had come... And the Global market are heading for a major correction/downturn...
The ASX had fallen below 4000, in AsiaPac, the impressive korean KOSPI which had a wonderful run past 1000 since late last year had fallen back and are on down trend since the Major sell-off, started in the US markets 2 weeks back. The US markets are getting more volatile, a major correction is anytime soon....
The Dow Jones are trading around pyschological support level at 10000, any fall below it, will result in a significant and dramatic fall globally...
In the meanwhile, I would suggest, come out of the market and hold cash...

Any opinions?

 

[Smurf1976]

I'm completely out of stocks for the first time since 1999. Not one stock, managed fund or anything else involving shares. My superannuation likewise - no stocks at the moment.

I sold my last shares on Friday 29th around lunch time. No stocks and no orders to buy any.

That ought to tell you what I think about the markets right now...

I have believed for quite some time, and still do, that the peak in the US markets in 2000 was a major top which will not be meaningfully exceeded for more than a decade. I always viewed the rally which started late 2002 as nothing more than a countertrend move. Accordingly I expect that the recent downturn is NOT a buying opportunity.

Time will tell but note that I'm not a qualified financial person in any way so DO YOUR OWN RESEARCH.

 

[tech/a]

Im moving toward Salz's veiw.

There are times when you trade or invest------ long
NOT TO BE IN THE MARKET.

The 10000 level of the Dow is important as mentioned.
So is US debt!

A fall below the ASX 180 day EMA will see me out and on the sidelines.

 

[Smurf1976]

A fall below the ASX 180 day EMA will see me out and on the sidelines.

Agree with your comments tech/a but just wonering why 180 days and not 200 or some other number?

 

[tech/a]

Weinstien suggests a 150 day SMA.

180 EMA is what I use as an exit for longer term systems and is similar to a 200day SMA.

You could use any longer term MA.

 

[Smurf1976]

Whilst there is no firm proof that the market is going down, up or anything else, for the purpose of the following let's just assume it IS going down.

What happens next? Do we just keep stair stepping down like we have so far? Surely this would have to stop sooner or later? Do we get a rally up to somewhere near the recent highs for a double top? Or do we just fall off the cliff...

I read one reasonably convincing analysis saying that the market is basically in trouble and it's all downhill from here. Another, which was equally convincing if not more so, argued for a bottom around 6 to 10th of May followed by a "tradeable" rally. That said, they expected the market to go down after the rally so both seem to agree about the major trend, it's just what happens next where opinions differ. Both were referring to the US markets though.

What are your thoughts? Rally then down or just down. (Or do you think this is just a dip?). All opinions welcome including bulls!

 

[salz]

I don't see any significantly optimistic news from the US which will be able to spark a rally anytime soon.

 

[mime]

I think we've had the correction. The Market should remain flat for the time being. Remember that alot of our stocks unlike the US ones have low PE's which indicates that we arn't over valued.

 

[wayneL]

I think we've had the correction. The Market should remain flat for the time being. Remember that alot of our stocks unlike the US ones have low PE's which indicates that we arn't over valued.

Depends what you consider to be low p/e's

I don't see much in single figures yet.

When we see 7 or 8, thats when I'll consider stocks to be cheap. Until then they're overvalued.

 

[brerwallabi]

Finding some companies with low pe ratios seems a proirity for me right now especially if they are below the median ratio of their sector not the overall market and are relatively debt free, the lower the better the higher the potential value. CBH was a great example recent example.

 

[Investor]

Be a little bit cautious about this approach because sometimes, low P/E ratios have a fundamental reason - the company might be about to tank (eg ION?).

Do some research about the reasons for the low P/E if you can.

Examples are:

P/E (historical and forward) is low for BSL due to uncertainties about the outlook for the global steel industry (a high risk industry at all times). However, I read similar reports about BSL (a broker recommended sell - which I ignored) when the price was $6 a year ago, and watched the price go to $10. BSL is the type of share with high volatility.

P/E (historical and forward) for QAN is low due to high fuel prices and high industry risk. However, grossed up DPS for QAN is very high (enough for me to gain a NPAT after cost of funds, just to hold, even without capital gains). Question is whether EPS can be maintained going forward. However, the P/E reflects this. It is a risk/return play.

 

[brerwallabi]

I should have mentioned in my previous comment there are a good few companies around with very high PE's that also could be shotrted.
Is now the time to sit on the fence?

 

[Investor]

...Is now the time to sit on the fence?

Yes.

 

[tech/a]

Bit of panic out there at the moment.
Dropping like a stone on my screen.