The Crash of 05

[Bronte]

Bronte,
I'm sure you mean well and even if I agree with your view we have to be careful to ensure any views are not considered to be financial advice. If by some chance the market bounces and people lose out on profits due to reliance on your view then there is the real chance of being blamed for 'bad advice'. This is just my understanding of ASIC's view and the general law.

I do agree that it is worth learning and reading and questioning all the time.

RichKid,
Just noticed your reply and others...
Point taken & I do mean well.

 

[Bronte]

Bronte,

It's October now. Are you saying you are bullish or bearish?

Mit

Sorry Mit,
Didnt see this either

We are definately looking for bullish signals now.
The market usually makes Lows this time of year.
Late October / November

 

[stocklearner]

someone call it's the crash, but i see it's a chance. a market can't be always bullish. it need some rest for good reason. risk? opportunity? that's what the market makes us so exciting to addict to it.
after release risks in october and november, all be good...
i hold dls

 

[stocklearner]

All Ordinaries will test 4250 next week. good luck to everyone.

 

[brerwallabi]

Just found this in me emails
The All Ordinaries has formed a descending broadening wedge over the last two weeks: a rare pattern that normally resolves in the direction of the long-term trend (in this case up). Friday's long tail signals buying support above the first major support line (from the previous peak in the primary up-trend) at 4250/60. Attempts to enter at this point are inadvisable because of the high failure rate. Thomas Bulkowski (Encyclopedia of Chart Patterns) recommends waiting for a close above the upper trendline or a partial decline: a trough that is higher than the preceding trough.

 

[brerwallabi]

Whoops forgot chart

 

[wavepicker]

I do not study planets or alchemy, but I do study chart pattern, price, time movements as well as Elliott Waves.

By my wave counts the ASX200 has either completed or is in the progress of completing in the coming months a 5 wave advance since 1980. If this is the case, it will end a 25 year bull market. This is a supercycle peak that will send the index into a bear market lasting 7-10 years and possibly back to 2600 points. it may be a fast decline ie crash or a slow ratcheting decline. This no one knows. There are way too many bulls out there at present to have a persistant bull market in the ASX.

 

[el_ninj0]

So doom and gloom is back on the agenda i see. 4250 is the support, if we see this broken, we've got 3000 as the next support level. Only time will tell, anything else that is said is merely speculation. I will be trading cautiously, and watching the DOW fairly closely, day traders control too much of the market in my opinion, they are the cause of much of the worry, and they are worried because the DOW is falling apart. An excellent analogy would be America having the most powerful army on earth, but having the monkey(bush) in charge.

Good luck, and good night.

 

[wayneL]

...day traders control too much of the market in my opinion, they are the cause of much of the worry, and they are worried because the DOW is falling apart....

A popular opinion.

But....a few points to consider about daytraders.

1/ They are a VERY small minority. Institutions and "investors" vastly outweigh daytraders in both number and amount of capital in the market.

I don't see how they can cause worry in any but the smallest cap stocks

2/ Daytraders aren't worried about direction, they trade whichever way it is going. Insto's and investors set the direction.

3/ Most daytraders would relish a decent bear. A good plunge can be very profitable...and, if it dumps enough, they will recognise TRUE bargains and buy some stock for the bottom drawer. ( What most people think is a bargain these days is still ludicrously overpriced)

These facts won't change the propensity for other players to blame daytraders for their market woes...anything, rather than recognise that value & price have become so out of whack for so long that a whole generation of investors have no idea what "value" means.

Please don't see this as an attack on you personally el ninj0. No doubt you are just repeating a popular (but incorrect) assertion.

Cheers

 

[dombat]

I am going on the record to say that by January the asx will be enjoying another bull run ... and it may come sooner than that....I can't believe how fickle and gloomy everybody is ... there are only three classes of assets shares property and bank bills... this is true in oz and true in usa...the american property market is overheated and their bank bills may go to 5% BUT their p/e is almost at historically low levels...so where do you think the money will go when the nervous nellies have been shaken out??? Sure oil price will be inflationary but the fact remains the funds are not going back into property and they are not going to go into bank bills (well not for long) ...no by January it will be business as usual It is a time of opportunity....

 

[wayneL]

BUT their p/e is almost at historically low levels.

You really think so? Looks to me like PE < 8 would be more like it.

 

[dombat]

and you think a pe of 5 to 7 is high??...Come on do you really think the funds are going to stay in bank bills for long with a p.e of 5 to 7?

 

[wayneL]

and you think a pe of 5 to 7 is high??

No, that would be low. A time for investing.

...Come on do you really think the funds are going to stay in bank bills for long with a p.e of 5 to 7?

I don't know. There are more variables to consider than bank bill rates. But at p/e 5 -7, they probably should be buying with their ears back.

But my suspicion is that at that point in the market, they will be more likely to experience outflows of funds, rather than inflows, forcing them to be sellers.

But I stress that I don't know what will happen.

 

[dombat]

Of course nobody knows what will happen wish we did...howevever the very sound and basic propisition exists that funds must attempt to make a sound return and the housing market both here in the usa is stuffed so....back to mr sharemarket it will go...though i must say the hysteria yes the hysteria this october has truly been spectacular! The price of oil is already receding, america must embark on a hugh building program with new orleans...no the one thing I am confident is that by January people will be looking back and wondering what this was all about...and another prediction BHP $25 by febuary - can't believe how people with a herd mentality act..BHP has been receiving huge prices for all of its product and china still is powering along...the gulf of mexico hardly made a dent in their bottom line...yes BHP will go to $25

 

[wayneL]

Of course nobody knows what will happen wish we did...howevever the very sound and basic propisition exists that funds must attempt to make a sound return and the housing market both here in the usa is stuffed so....back to mr sharemarket it will go...though i must say the hysteria yes the hysteria this october has truly been spectacular! The price of oil is already receding, america must embark on a hugh building program with new orleans...no the one thing I am confident is that by January people will be looking back and wondering what this was all about...and another prediction BHP $25 by febuary - can't believe how people with a herd mentality act..BHP has been receiving huge prices for all of its product and china still is powering along...the gulf of mexico hardly made a dent in their bottom line...yes BHP will go to $25

Well you have to have a view, and back that view. All the best with it.

My view is that the likes of prechter will be proven right. But thats not to say your scenario won't happen first. This sort of current volatility could precipitate both outcomes.

cheers

 

[wavepicker]

Of course nobody knows what will happen wish we did...howevever the very sound and basic propisition exists that funds must attempt to make a sound return and the housing market both here in the usa is stuffed so....back to mr sharemarket it will go...though i must say the hysteria yes the hysteria this october has truly been spectacular! The price of oil is already receding, america must embark on a hugh building program with new orleans...no the one thing I am confident is that by January people will be looking back and wondering what this was all about...and another prediction BHP $25 by febuary - can't believe how people with a herd mentality act..BHP has been receiving huge prices for all of its product and china still is powering along...the gulf of mexico hardly made a dent in their bottom line...yes BHP will go to $25

Yes what you say is true, my point earlier is that the ASX200 is the process of forming a peak, this may already be done or it may happen next year. When it does happen exactly know one knows yet, but the warning signs are there already. Like all previous major declines of history 90% of particpants will bet burnt because of greed and overstaying. Since October 04 the DJI has been forming a possible broadening head and shouders formation. If this does in fact work out, prices in the US in my opinon will not see a rally until the start of December, and will give way to 8500 next year at least. This makes sense because in such an event there will be a flight to cash, and people will choose US Dollars first. The US Dollar Index itself appears to beforming what is an inverted head and formation, although it appears it will have a pause in its uptrend the next few weeks. This in itself should show us that foreign currencies and commodoties prices will pullback from current levels.

If the US slips into recession in the years ahead there will be a slackening in demand for resources and commodity prices as it is a big customer for Chinese goods

 

[el_ninj0]

If the US slips into recession in the years ahead there will be a slackening in demand for resources and commodity prices as it is a big customer for Chinese goods

I disagree, there is huge demand from other places, such as India, Indonesia, and the Chinese themselves. Europe is a massive consumer of Chinese made textiles as well. So I think demand will still outway supply by a fair bit. India is yet to make its dent on the world markets in my opinion, and China has only just started.

 

[Smurf1976]

I think we've seen a long term bottom in interest rates in the US. As rates there rise that ought to, within reasonable limits, move rates elsewhere too.

As for the stock market, a secular bear started in the US markets in 2000 IMO. The ASX isn't so clear...

 

[DTM]

I disagree, there is huge demand from other places, such as India, Indonesia, and the Chinese themselves. Europe is a massive consumer of Chinese made textiles as well. So I think demand will still outway supply by a fair bit. India is yet to make its dent on the world markets in my opinion, and China has only just started.

If memory serves me correct, the US accounts for 1/3 of China's exports (don't quote me). A huge part of the market. Any slow down in the US would put an end to a lot of demand, especially when other economies like Europe follow.



That would then leave us with a lot of coal and iron, record indebtedness, and a falling dollar.

:goodnight

 

[Bronte]

We are definately looking for bullish signals now.
The market usually makes Lows this time of year.
Late October / November

Quote from 21st October 3.28PM

Ganns Golden Rule 50% PB
This was a very good bullish signal.