The official "ASX is tanking!" panic thread

[VSntchr]

Thanks craft for the considered response. All the best with this strategy (and I mean it in a sincere way). In fact this is how my Mum buy/hold shares. I tried many times to tell her that the price she paid is called "sunk cost" and has nothing to do with whether she should hold or sell (she has little income and pays no tax). But I couldn't convince her so I am certainly not going to try that here .

Here's some news on QBE for those interested.

http://www.smh.com.au/business/bond-collapse-sends-qbe-shares-south-20110811-1iow0.html

FWIW it sounds like a whole lot of BS. The bond hasn't collapse. Bond yield has. The bond itself has risen. The total interest QBE will be getting is the same on their existing holding (the US govn't doesn't pay variable rates, right?). Only new purchases are returning less and with the $A falling 10% surely they are ahead if not at least square. Not to mention the fact that, when they need to sell that bond to settle claims they will get a higher price...It's like saying that I am poorer because those CBA shares I hold are now yielding only 4% due to the share price going up 15%...

Great post!

 

[McLovin]

http://www.smh.com.au/business/bond-collapse-sends-qbe-shares-south-20110811-1iow0.html

FWIW it sounds like a whole lot of BS. The bond hasn't collapse. Bond yield has. The bond itself has risen. The total interest QBE will be getting is the same on their existing holding (the US govn't doesn't pay variable rates, right?). Only new purchases are returning less and with the $A falling 10% surely they are ahead if not at least square. Not to mention the fact that, when they need to sell that bond to settle claims they will get a higher price...It's like saying that I am poorer because those CBA shares I hold are now yielding only 4% due to the share price going up 15%...

Most of QBE's funds ($17/$23bln) are in floating rate notes and short term money not bonds, so changes in interest rates have a direct effect on their income. Nearly every insurance company will keep most of its investments short term, Berkshire is unique in the sense that it holds so many equity investments on its balance sheet. The average insurance company wouldn't want the risk of long dated fixed income (or equity) in its portfolio as it has to pay out a lot of those funds over the course of the year and needs the certainty of payback at maturity. QBE is still probably in the top 5 best run insurers in the World, despite the abnormal number of natural disasters it is still making a big underwriting profit, and I have been buying at the current levels.

Slighty OT, but I was having a look back on Google News Archive to the SMH Top 150 by market cap in 1987, QBE had a market cap the same size as OPSM!

 

[Struzball]

http://www.news.com.au/money/supera...snap-super-plans/story-e6frfmdi-1226114969687

Is Bill Shorten qualified to give financial advice?
I wonder what people would say if/when the market does indeed tank.

 

[skc]

And so the panic has ended... let me leave this thread with one final post and a chart.



You cannot get a candle that's more similar. Now does that mean we will see the same outcome over the next 12 months? Not necessarily, but what this candle shows us is that market is teetering on something. Personally I don't think the future is written yet - the butterfly effect probably applies here. Time will review the answer, while hindsight will prove how blindingly obvious the current situation is.

Good trading all and may good risk management be with you.

 

[notting]

CCC

Bait normally has just one hook in it.

 

[nulla nulla]

I wonder if we are not becoming to euphoric in our declarations that the slump has passed and it is blue skies and clear sailing ahead. After all most storms have a calm eye in the centre giving a false impression that the storm has passed.

Europe is still a mess, the U.S.A is still a mess and china is trying to rein in inflation. I respectfully suggest that we are not in the clear yet.

Lock in some profits, tight stop losses and hold back some cash. Tonights international markets will be interesting.

 

[nomore4s]

And so the panic has ended... let me leave this thread with one final post and a chart.

View attachment 44063

You cannot get a candle that's more similar. Now does that mean we will see the same outcome over the next 12 months? Not necessarily, but what this candle shows us is that market is teetering on something. Personally I don't think the future is written yet - the butterfly effect probably applies here. Time will review the answer, while hindsight will prove how blindingly obvious the current situation is.

Good trading all and may good risk management be with you.

Interesting point SKC but while the weekly bar looks the same the daily bars for those weeks tell totally different stories.

I actually think a closer representative of the bar from last Tue (9/08/11) is actually the bar printed on 21/11/08(green line on the chart) I know the intra day futures trading was pretty much the same. While we saw new lows after that bar, it signaled the end of the real momentum in that downward move, just look at the different flow after that bar.

So while I think we could drift back down to test that 3700-4000 area again (in fact I'd be a little surprised if we didn't test at least 4000 again), unless we see some sort of major event from overseas markets I think we might have seen the lows for this year. How price reacts on the next leg down will be telling, I will definitely be expecting a more orderly retreat - if not it is a worrying sign imo. With the strength we saw in those 2 down days last week I would be very surprised to see our market push below 3700 this year without some sort of major trigger from overseas.

But in this current environment anything is possible.

 

[skc]

Interesting point SKC but while the weekly bar looks the same the daily bars for those weeks tell totally different stories.

I actually think a closer representative of the bar from last Tue (9/08/11) is actually the bar printed on 21/11/08(green line on the chart) I know the intra day futures trading was pretty much the same. While we saw new lows after that bar, it signaled the end of the real momentum in that downward move, just look at the different flow after that bar.

So while I think we could drift back down to test that 3700-4000 area again (in fact I'd be a little surprised if we didn't test at least 4000 again), unless we see some sort of major event from overseas markets I think we might have seen the lows for this year. How price reacts on the next leg down will be telling, I will definitely be expecting a more orderly retreat - if not it is a worrying sign imo. With the strength we saw in those 2 down days last week I would be very surprised to see our market push below 3700 this year without some sort of major trigger from overseas.

But in this current environment anything is possible.

I don't disagree. But I do feel the current state of affairs are closer to start of 2008 than the end of that year.

Perhaps I've been reading zerohedge too much...

 

[nomore4s]

I don't disagree. But I do feel the current state of affairs are closer to start of 2008 than the end of that year.

Perhaps I've been reading zerohedge too much...

Maybe but there are a few things to consider.
- We are not coming off a multi-year bull run
- The excessive leverage we saw at the top of the bullmarket is now drastically reduced

While I think we will see a bear market of some sort and test the lows at 3200-3400 in the next few years, I think we have seen the low for at least the next few months purely judging by the strength seen last week but of course that is no guarantee, especially in the current market. The major risk I see atm is a black swan event which of course renders all analysis pretty much useless.

Disclaimer:I'm purely a chartist and have little understanding or interest in economics, I trade off what the charts tell me.

 

[littleshire]

Maybe but there are a few things to consider.
- We are not coming off a multi-year bull run
- The excessive leverage we saw at the top of the bullmarket is now drastically reduced

Have a look at the crash of 1929 (and subsequent bear market):
- in the first leg down the market fell 48%
- a recovery happened when the market bounced 48%
- the second drop was 86% and the market was not coming from a multi-year bull run and of course the market had de-leveraged at that point.

This is an extreme example of course but it shows the unpredictability of the market.

This panic has ended but because the major economies of the world are still in deep trouble more drops will come in due course, for the people that missed this drop, more will come... we just don't know when. Remember to be brave when everybody is fearful (to be more precise: be brave then the VIX spikes above 30).

Regards,

 

[tech/a]

Have a look at the crash of 1929 (and subsequent bear market):
- in the first leg down the market fell 48%
- a recovery happened when the market bounced 48%
- the second drop was 86% and the market was not coming from a multi-year bull run and of course the market had de-leveraged at that point.

This is an extreme example of course but it shows the unpredictability of the market.

This panic has ended but because the major economies of the world are still in deep trouble more drops will come in due course, for the people that missed this drop, more will come... we just don't know when. Remember to be brave when everybody is fearful (to be more precise: be brave then the VIX spikes above 30).

Regards,

Actually it makes complete sence and predictable--it will happen--eventually.
Heres why.

Have a look at the crash of 1929 (and subsequent bear market):
- in the first leg down the market fell 48%
Reaction to events today its the US and European debt.

- a recovery happened when the market bounced 48%
Here is the over reaction (Not the sell off) here the astute sell into those who are "wise" enough to pick the bottom--last chance to get out.

- the second drop was 86% and the market was not coming from a multi-year bull run and of course the market had de-leveraged at that point.
Yes and it dropped 86% because all buyers had vacated.There was NO support supply was never ending. Its all set to repeat---how it will pan out and WHEN it will pan out is hard to say---but for mine sooner than later.

Once those holding stock for Super get a sniff of an evaporating retirement fund the rush to the exit will be worse than a Fire in a stadium!

 

[mattyhammer]

I'm not much of an educated investor (quite the opposite really) however I don't believe comparing what happens in current times can be comparable to what happened almost 100 years ago. The share market is vastly different due to many more investors, with quicker access to buy/sell (ie home pc's), the world is vastly different economical situations and rarely can we use the past to predict the future. We can learn from past situations and how to react to certain situations, but certainly it's not a platform from which to predict any future movement. Only time will tell.

Manage your stocks without emotion, have appropriate risk management strategies in place, and most of all...may the force be with you.

 

[wayneL]

I'm not much of an educated investor (quite the opposite really) however I don't believe comparing what happens in current times can be comparable to what happened almost 100 years ago. The share market is vastly different due to many more investors, with quicker access to buy/sell (ie home pc's), the world is vastly different economical situations and rarely can we use the past to predict the future. We can learn from past situations and how to react to certain situations, but certainly it's not a platform from which to predict any future movement. Only time will tell.

Manage your stocks without emotion, have appropriate risk management strategies in place, and most of all...may the force be with you.

Well you see this is the part that hasn't changed... and it's the most important part.

 

[skc]

Maybe but there are a few things to consider.
- We are not coming off a multi-year bull run
- The excessive leverage we saw at the top of the bullmarket is now drastically reduced

While I think we will see a bear market of some sort and test the lows at 3200-3400 in the next few years, I think we have seen the low for at least the next few months purely judging by the strength seen last week but of course that is no guarantee, especially in the current market. The major risk I see atm is a black swan event which of course renders all analysis pretty much useless.

Disclaimer:I'm purely a chartist and have little understanding or interest in economics, I trade off what the charts tell me.

Both points are true but there are plenty of other factors to counter those. e.g. the lack of bail out ammunition and a much poorer starting point for the economy. As to black swan risk - it's always what you can't see that hits you, isn't it? France wasn't even talked about 2 weeks ago. And so far no one has mentioned UK either...

Fundamental analysis of the current situation is difficult as there are so many variables, and translating those unknowable / undetermined fundamental developments into potential price actions or levels will be nothing more than pure guess work. Trade the chart is definitely the most simple and practical thing to do.

Talking about how stuffed the world may become, however, is much more engaging.

 

[WhoToTrust]

Could it be? (doom and gloom scenarios)

1. World War 3 will be played out in the financial markets.

2. This is a form of peasant/worker revolution. Sick of the Government bailing out banks without recourse.

3. The syndicate pools of the financial world losing control.

4. A fundamental shift in the human race. The idea that the capitalisms' infinite growth does not work with a finite closed system(Earth).

5. A simple correction.

All are possible I suppose. HINDSIGHT WELL TELL US EVENTUALLY.

 

[nomore4s]

Talking about how stuffed the world may become, however, is much more engaging.

Ain't that the truth.

 

[littleshire]

Both points are true but there are plenty of other factors to counter those. e.g. the lack of bail out ammunition and a much poorer starting point for the economy. As to black swan risk - it's always what you can't see that hits you, isn't it? France wasn't even talked about 2 weeks ago. And so far no one has mentioned UK either...

Fundamental analysis of the current situation is difficult as there are so many variables, and translating those unknowable / undetermined fundamental developments into potential price actions or levels will be nothing more than pure guess work. Trade the chart is definitely the most simple and practical thing to do.

Talking about how stuffed the world may become, however, is much more engaging.

There are many variables but only 1 that matters: DEBT


and that was 2009, now is even worse.

 

[nomore4s]

Have a look at the crash of 1929 (and subsequent bear market):
- in the first leg down the market fell 48%
- a recovery happened when the market bounced 48%
- the second drop was 86% and the market was not coming from a multi-year bull run and of course the market had de-leveraged at that point.

This is an extreme example of course but it shows the unpredictability of the market.

This panic has ended but because the major economies of the world are still in deep trouble more drops will come in due course, for the people that missed this drop, more will come... we just don't know when. Remember to be brave when everybody is fearful (to be more precise: be brave then the VIX spikes above 30).

Regards,

I'm not arguing that it won't or can't happen, I'm just saying the action and strength in those bars indicates some sort of bottom for the moment.

 

[VSntchr]

Could it be? (doom and gloom scenarios)

1. World War 3 will be played out in the financial markets.

2. This is a form of peasant/worker revolution. Sick of the Government bailing out banks without recourse.

3. The syndicate pools of the financial world losing control.

4. A fundamental shift in the human race. The idea that the capitalisms' infinite growth does not work with a finite closed system(Earth).

5. A simple correction.

All are possible I suppose. HINDSIGHT WELL TELL US EVENTUALLY.

Im getting a sense of 2012 here!

 

[WhoToTrust]

Im getting a sense of 2012 here!

Not at all. The human race has entered a new 'Age' dubbed the Technological Age.

The last was the Industrial Age.

The wondrous number cruncher device the computer has changed the way we live.

How long after after entering the Industrial Age did the great depression start?

Just something to ponder and throw in the ring.