Australian (ASX) Stock Market Forum

The official "ASX is tanking!" panic thread

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Robert Schiller offers his analysis of US stock markets and the questionable value currently placed on current stocks.

Are US stock market highs justified, or is there a bubble?
Robert Shiller
Massive earnings might reflect strength – but history suggests we should expect volatility

The US stock market, as measured by the monthly real (inflation-adjusted) S&P Composite Index, or S&P 500, has increased 3.3-fold since its bottom in March 2009. This makes the US stock market the most expensive in the world, according to the cyclically adjusted price-to-earnings (CAPE) ratio that I have long advocated. Is the price increase justified, or are we witnessing a bubble?

https://www.theguardian.com/business/2018/sep/24/us-stock-market-highs-bubble-earnings
 
Nasdaq down 2.8% overnight, including Apple down 5%. Beginning to look ugly.

"Death Cross" looks about to form on many indices. Already occurred in some cases.
 
*I have very limited knowledge regarding the data below and there are many on this forum who could explain this in much better detail than me*

*I also remember reading a vanguard article about a number of these models and their limited accuracy over a long period of time (basic earnings yield was considered the mostt accurate)

ASX.png

- Data points are quarterly since 2000
- Earnings Yield is the Inverse of the ASX 200 P/E Ratio
- Market Premium is defined as (ASX 200 Earnings Yield - 10 year Aussie Gov Bond Yield)

- Current Earnings Yield approx 6.90%
- Current Market Premium approx 4.27
 
kid hustlr said:
*I have very limited knowledge regarding the data below and there are many on this forum who could explain this in much better detail than me*

*I also remember reading a vanguard article about a number of these models and their limited accuracy over a long period of time (basic earnings yield was considered the mostt accurate)

View attachment 90305

- Data points are quarterly since 2000
- Earnings Yield is the Inverse of the ASX 200 P/E Ratio
- Market Premium is defined as (ASX 200 Earnings Yield - 10 year Aussie Gov Bond Yield)

- Current Earnings Yield approx 6.90%
- Current Market Premium approx 4.27
Click to expand...

https://personal.vanguard.com/pdf/s338.pdf
 
Really looking sick around the world. Not many bright spots for investors.
But at least some relief for us at the petrol bowser. Oil price slumping, and the AUD is holding up above 70c
 
Logique said:
Really looking sick around the world. Not many bright spots for investors.
Click to expand...
I was thinking of that when looking at overseas markets last night.

It’s not down, up, down, up etc it’s just down, down and down. It’s a bit like watching ice melt really - it just shrinks it never gets bigger.

There’s a bottom somewhere surely?
 
Smurf, just a personal view, the bottom is a while off yet mate. Too much technical damage to unwind rapidly. People are hoping for a "Santa Claus rally" into Christmas, but may only be wishful thinking.

On a more cheerful note, will your Christmas lights display once again be visible from space!
 
When this panic thread was created, Greece was going to sink into the ocean, the market bottomed and subsequently rose when Europe decided to bail out Greece, and all was good again.. apparently.

At the moment it seems like a technical downturn, lower lows, technical corrrection, US tech stocks in a technical bear.

Where/when is the panic currently?
Brexit.
Oil declines.
Australian house prices finally starting to unwind.

What happens to our "well positioned" banks when house prices decline 20% year on year?
First the home owners will see negative equity, Then the the banks see negative equity..
I guess there is no problem if house prices just keep going up..

Is there even any panic yet? Should there be?

Will it only be the market bottom when somebody decides to bail someone out again?
 
Smurf1976 said:
I was thinking of that when looking at overseas markets last night.

It’s not down, up, down, up etc it’s just down, down and down. It’s a bit like watching ice melt really - it just shrinks it never gets bigger.

There’s a bottom somewhere surely?
Click to expand...
Generally prices never go below that most dependable of all support levels, namely zero!
(Based upon this observation, I agree that the market most assuredly does have a bottom.)

Any price level above zero is fair game!
 
Logique said:
Smurf, just a personal view, the bottom is a while off yet mate. Too much technical damage to unwind rapidly. People are hoping for a "Santa Claus rally" into Christmas, but may only be wishful thinking.

On a more cheerful note, will your Christmas lights display once again be visible from space!
Click to expand...
My "world view" thinking was very much that we'd see a peak in the stock market (as in major markets - US etc) and sometime after that we'd see a peak in oil as the final thing to top out for this cycle.

Well that sort of happened, they peaked a couple of weeks apart, but the subsequent plunge in the price of oil has been dramatic to say the least.

My thoughts at the moment are that we're in the range of a major top for stocks (particularly US). It may not be that the actual top is in place, it could be or it might be yet to come, but that in broad terms it's around here in terms of timing and value in the context of the long term (so monthly or quarterly charts not daily).

That's just how it looks to me fundamentally. Interest rates rising, business cycle is overdue for recession by all historic measures, markets are starting to wobble, etc.

As for the Christmas lights, well I've moved house so setting them up is a rather big task. Some will be up but not the lot, at least not by 1st December. First task has been to install power to connect them to which was done yesterday. Plus quite a few will need modifications to fit the new house hence some will be up but not all 25,000 or so. :)
 
I'm stating the obvious but any bounce is being sold, distribution the last two sessions.

Looks like at a minimum will at least retest lows, if they can't hold we will go lower quickly.
 
I agree with your sentiment Smurf.

I do think the timing is 6-12 months early given leading indicators appear to have a time buffer before they tick over. But even saying that most of the window would be spent recovering lost ground so don't see much upside from previous highs.
 
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Re-post this chart from gold thread...rebalancing opportunity for those holding both.
Screen Shot 2018-12-21 at 9.42.43 am.png
Government bonds and developed market cash have also done well out of this recent period...even more rebalancing opportunities!
 
Looks like this is the start of stock holders jumping from buildings and dousing themselves in petrol. Go hard turkeys. :laugh:
 
New lows, every couple of days it just goes lower, i reckon we will get another Trump bump when he goes..
 
Can't imagine a relief rally happening here after (our universal Master) Wall Streets continued desperate sell off last night. Who put them in charge anyway?
 
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