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The Bull shall Return

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Hi young_trader

regarding the money has to somewhere argument - yes that's true, but it could easily go where it has gone in the last few weeks during the 10% or so retrace in our market.

Some other alternative options to pouring funds into our market are cash, bonds, hybrids, property (local and overseas), more favourable overseas share markets.......imo you'll find that the institutions that drive the big/pointy end of the market diversify in various asset classes and are by no means generally bound to investing in our market.

I think that money pouring into super funds will only help provide support in our market in at least the short term but definitely won't drive it to new all time highs imo because there are too many investment alternatives to our market given the uncertain global economic conditions and geo-poltical tensions.

All we need now is for the Koreans to start test firing their missiles as they have hinted at and all hell could break loose in the next few months.

You might recall there were some who predicted a few weeks back the roaring bull market would continue indefinitely because of the reasons you suggested but that was never going to happen, and it obviosly hasn't as evidenced by the last few weeks, as suggested by I and a few other cautious 'bears' around here

cheers

bullmarket
 
"even a little U.S recession won't stop it"....

Where is the logic behind that?It sounds very gung ho which is a dangerous attitude.

China's main source of income is their cheap export products.America is their biggest customer.China simply cannot absorb their own products and rely on foreign consumption.When the day arrives that enough Chinese are rich enough to consume their own products,then maybe the U.S will be less of a factor.Most of the country still lives in poverty.
 
Yeah, it was a rash comment specman, thanks for pointing it out!

I think by a 'little' recession I mean something fairly tame on the scale of things. And recessions can be long or short, so perhaps I was thinking of a relatively short one.

I should have been more careful with the R word.

Perhaps a US 'slowdown' was what I was intending.

I must say though, the current figures coming out of China are quite astounding. I can't quote them right now, but they've been mentioned thoughout the forum. One I can pluck is that 310 million Chinese are now walking around with mobile phones this very second and this is growing at an astronomical pace. It now has the third most cars on the planet and will have the most by 2010ish. The list goes on. And on.

But you are right. Aparantly this growth is reliant on the US buying their trinkets.

How long it will be before this development is self sustaining is an interesting question. Surely, once there is a large enough middle class, they will be buying the trinkets themselves and it will be an internal merry-go-round for consuming and producing. India, Brazil and Russia need to be buying trinkets too don't forget!
 
and the Chinese gov't was reported in The Age a few weeks back that they were looking to slow down their unsustainable high economic growth rate.
 
kennas said:
Surely, once there is a large enough middle class, they will be buying the trinkets themselves and it will be an internal merry-go-round for consuming and producing. India, Brazil and Russia need to be buying trinkets too don't forget!
Click to expand...

I think that is purely based on whether advertisers and marketting people can generate irrational and absurd spending habits in Asia, of the scale and magnitude that we are witnessing in the west...

If Japan is anything to go by... Asians do spend, but they save a hell of a lot more...
 
Goodbye planet Earth if the Asians become like the west.:fan
 
Generally speaking, Asians tend to be very good savers, and to some extent more disciplined. there are credit card "slaves", but way not as many as in US or here...

btw Japanese and Koreas people are more disciplined than Chinese...

cheers
 
I've only spent a few days in Tokyo, but if the city is anything to go by in regards to the spending habits of the Japanese, they look to be bigger spenders than Melbournians. More mobiles than you can poke a stick at. And they are fashion slaves!

I've only read about how insatiable the Chinese middle class are becomming for new gadgets and symbols of their new found affluence. I do know that they will be buying gold jewllery to display how well off they are.

Some of you guys have been to China. Don't they buy plasmas and cars and big apartments, etc etc?
 
I've posted my views, I'll let the economies do my talking for me, lets see where we are 6 months from now,

And Bullmarket regarding the money has to somewhere argument - yes that's true, but it could easily go where it has gone in the last few weeks during the 10% or so retrace in our market.
From what I've been hearing the funds are on the sidelines ie in CALLABLE CASH ACCOUNTS waiting, so the money hasn't gone too far away


You might recall there were some who predicted a few weeks back the roaring bull market would continue indefinitely because of the reasons you suggested but that was never going to happen, and it obviosly hasn't as evidenced by the last few weeks, as suggested by I and a few other cautious 'bears' around here

A bull market doesn't power ahead in a straight verticl ascend it has peaks and troughs, this was merely a correction, doesn't it worry you that when companies like BHP and OXR release their profit figures, they're profits will be based on copper prices recieved of between $7000 - $8800 US/t, where as most analysts were forecasting copper prices of say $3000- $4000 / t

Also what about Zinc most analysts have been forecasting $2000 as the LT price and for the last 6 months the price has for the most part been between $3000 - $4000 t, lets see what happens when ZFX releases its 4th qtr report,


I think reporting season is the kick thats required, but lets see
 
no problem young_trader

yes, let's see where the markets are in 6 months time.

As I posted earlier either in this or another thread, my says our market (XJO) will trade sideways for at least the next 6 months with more downside than upside risk and will not break through the previous all time high for at least 6 and possibly 12 months.

cheers

bullmarket
 
O O O (puts my hand up) I>>I>>I been to China . Thats my only real claim to fame lately, I spent 4 weeks touring around China. Even down the Yangtzee and MANY cities in between . Let me start by saying there is as much land as there is/are people (So much space filled with crop it seems,gotta feed that many people somehow). There are ROOLY ROOLY RICH people driving shiny BLACK Audis/Mercs/Mits' cars around (its weird). But they are driving by hoardes of deplorably poor people. So what Im trying to say even though there is wealth there. Most of them are BROKE or working for a pittance! So no they cant afford PLASMAS and the like.(Though they are bloody cheap there) And I know it will/is changing..... BUT and its abig BUT... From seeing the sheer numbers of people. It will be a while before the masses could afford even the rudiments of the middle class 1st worlder. Damn most of em seem to be country folk with radios and ****. Though Even their "small "cities have 3x more people than Perth. But in the cities there is still dirty hole in the ground toilets with no sewerage or toilet paper 5 stories up.Getto lookin stuff. But they are building, and there is heaps of 1st world product around it just seems to me like they can see it but cant touch it so close but so far.
 

I agree with you bullmarket, although I expect market to rise in the very short term to 5000+ as mentioned on an earlier thread, I am bearish for the remainder of the year with a final target of 4000+ before a major rally. Sure I expect many countertrend rallies on the way down though.
However the way I am approaching it, this bear trend after it ends will produce another substantial rally but not to new highs. Overall I would expect a choppy, net sideways market for the next 2-3 yrs. Typical of a cycle 4th wave, and something that comes as a surprising dissapointment to the bulls after a strong third wave of the last 3 years.
Thereafter to have a final blowoff 5th wave to all time highs over 6000.
 
Anyone else see the report this morning on China's crazy hunger for cars? ? ?
Its funny 2-3 years ago the program would have talked about the amazing demand for cars and highlighted the negative environmental impacts via the extra pollution created,

Today they talk about the amazing growth in car ownership in China and the HUGE strain this will put on global OIL supplies and even commodities required to produce the cars, going into some depth as to the energy implications for the globe, then they briefly mention the pollution, 'oh and by the way the environment may suffer'.

Funny isn't it how the shift in focus has occurred? It used to be save the environment, now its save the remaining oil! Whats next Oil Peace?

Also saw a report that the Chinese and Indian governments, Indian particularly are looking at ways of curbing gas guzzlers by subsidising hybrids, report then went on to show how these new hybrid cars use about 4x as much copper as normal cars, and use a **** load less in petrol, again another funny shift in perspective it used to be they are so clean and environmentally friendly,
 
Everyday my bullish outlook is re-affirmed, I was looking back over some notes I had from last year and read an interesting article this morning which reminded me,

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=0EBFA60A-17A4-1130-F5F1D897DA5F0B0F


Does anyone remember how last year the huge risk to Resources was China's slowdown, it was inevitable it was going to happen for so many reasons yet it didn't did it? ? ?

Now here we are mid 06 and its all about US rates and the US slowdown, I have no doubt that rising interest rates will curb some consumption and will also slow the US property market but I don't think it will be enough for at least 6-12 months (ie given that Monetary policy lags in its effect) Also didn't a recent report out of US show increased consumption in the May Durable Goods or something?


Its funny how quickly everyone moves from 'Doomsday' event to 'doomsday' event, last year it was the big bad BIRD FLU!!!!!!!!!, what happened?
Then it was the Iran Uranium Crisis!!!!!!!!!!!!!!!!!!!!!!!!! Sure this is keeping a bit of premium in the oil price, but lets face itthe situation isn't that bad!
Now its the Big Bad North Koreans and there Missiles, again lets see how prominent this issue is in 6 months,

We are definately climbing the wall of worry stage IMO, depending on what Mr B over in the US does will dictate possibly how much longer this 'wall of worry' stage will last, who knows he and the rest of his board may decide to hike rates by 50 basis points, causing another sevre 1-2 week correction, one thing is for sure once all this dust settles and people see the Profit reports that come out in July with record profit this and new record revenue that combined with consistant demand for these commodities, historically low stockpils and a swag of possible supply hic-cups the market will go bezerk, I think it will become a little dot-com bezerk, we still haven't seen that in the resources yet, ie people just going nuts buying for the sake of buying, we saw that in the Recent Uranium hyps (and how profitable was that little period) but I think it will be across the board,


Time will tell,
 
Hi young_trader


Re the July profit reports.....I think most people will be more interested in what companies say about their outlook and whether the market believes them or not

I'm not convinced yet that company outlooks, generally, will be all that good for the next 12 months.

I still expect XJO to trade within the ~4700 - 5100 range (ref: weekly XJO charts I posted a few weeks back) for the next few months. Though there could be a short lived July (new financial year) rally

cheers

bullmarket
 
Anyone else see US Housing Report?

Sales were meant to drop in May but wait they actually rose, so China has kept growing at an amazing rate, Japan is re-awakening, India is still following China's growth and the US Consumer spending and housing sector has been strong, so much for the big bad inflationary boogie man.

New home sales rose 4.6 percent in May, the government said on Monday. The data defied Wall Street's forecast for a decline. The stronger-than-expected home sales bolstered shares of home builders.
 

Hi Y_T, I saw the report on Bloomberg TV and wondered what is going on. It looks too much like a report to justify the Fed raising rates this week.
 
Things will jump in July, as the new financial year begins.... this is a fair reason why things have dived and remained flat the last couple of months, (as well as 'the wall of worry'). After making a killing for most of the year, most traders are happy to sell cheaper in order to keep their tax down. And down they want it to stay for another couple of days, then things will start reving up again as bargains will be had. Plus what Y_T had to say.
Like to add that i enjoy this site, and am a total amateur. So be kind.
 
Beware, those US housing figures are quoted as having a potential +/- 14% error factor... Also, the reported aggregate house prices in the US fell too... as bond yields are rising.

Also, there is a lot of conflicting data in the commodities area (NYMEX/COMEX movement’s vs LME for example). Just look at the various futures charts and try and make sense of the market, especially in different time frames. Add into that the crude oil factor...

A lot of the data on China is also not what you'd call transparent either... so I’d be a bit careful about singing the bull song, or beating the doom and gloom drum either...

Be careful about the Japan story too. Don’t forget they hold a significant amount of US currency in one form or another. If they start selling it strongly, do the math...

Look at US bonds, US Dollar, Gold, Forex in general... a lot of conflicting information about what’s really going on. It’d be great to have a clear picture, wouldn’t it?
 

Great comments Mag,

Gotta look past the financial industry spin, if possible.
 
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