The official "ASX is tanking!" panic thread

[skc]

Why was there supposed to be a bounce today?

Well there was a bounce... what's that old penis analogy? Just didn't have the viagra. We did well staying above 4000 on the XJO.

While the media scrambling for headlines to explain the fall.

The Australia thinks it's "Australian sharemarket rocked after Moody's downgrades Societe Generale, Credit Agricole"

http://www.theaustralian.com.au/bus...des-french-banks/story-e6frg91o-1226136977853

SMH went with "Asian growth outlook unnerves investors"

http://www.smh.com.au/business/markets/asian-growth-outlook-unnerves-investors-20110914-1k8k8.html

 

[nomore4s]

While Im enjoying the short on the SPI that reversal is pretty damned ugly!

Unless we see some strength come in at the 3700-3900 level it could get very ugly. I can not find 1 chart that I would consider putting a long on atm, which is not a very good sign for the overall market.

I see no signs of strength in the weakness of any charts and this is not normally the case. IMO it won't take much too push this market down very quickly. I now think we will see a test of 3700 in the near term and then maybe a small bounce but I think the market will be in a steady downtrend for a while - in other words a prolonged bear market.

 

[craft]

The paper addresses both transaction costs and taxation issues. Did you bother to read it?.

Yes I have read it. Taxes, commissions and slippage are not included in the figures they are only considered as an adjunct under the heading of ‘Practical Considerations’

err no, the paper actually identifies exactly where the excess return comes from:

Lower volatility.

Yes but my point is that the lower volatility can only be obtained if you pass the parcel to another trader. Buy and Hold may be the benchmark they are comparing against but a buy and holder by definition would not be the counterparty to the trading.

No idea how you pay less commission buying multiple stocks than an index once a year, or how you avoid taxation either

They say the strategy turnover is 70% - Long Term Investing turnover should be far lower than this.

It isn't an "argument" against your strategy, just something to read and consider if you want to be a buy and hold type.

Read it, considered it and posted a response as to why I thought it wasn't very relevant.

The paper clearly quantifies that momentum provides alpha over a huge timeframe

Alpha compares the return from active participation – by definition if you have positive alpha you have beaten the market but you haven’t done so at the expense of buy and hold but at the expense of other active participants.

I am not sure why traders always want to assign long term investors as the patsies to their trading activities. Maybe it’s because they don’t want to face the facts that they are playing a less than zero sum game between themselves.

 

[wayneL]

Thanks for posting. Makes sense to me. Don't really see too much sense in just watching shares depreciate daily when you could step aside have the money in the bank earning close to 6%

But, but, but.... you could sell covered calls against your CFDs and make 6% per month! ::

</sarc>

 

[sinner]

Buy and Hold may be the benchmark they are comparing against but a buy and holder by definition would not be the counterparty to the trading.

Poppycock. As if in this market with HFT, stat arb, options, etc, anyone knows who/why the counterparty for their trade is. Buy and holders could be buying off a market timer, or an options arb guy, but they have to buy at some point. And it is clear from this thread that new buy and hold money is entering the market daily, so you can imagine at least some of the buy and holders were counterparty to the selling by market timers as cumulative breadth indices and long term MAs showed downtrend at the start of August.

I am not sure why traders always want to assign long term investors as the patsies to their trading activities. Maybe it’s because they don’t want to face the facts that they are playing a less than zero sum game between themselves.

Mate, I don't want to assign you as a patsy, ever. Let alone always. Somehow posting a research paper that examines market timing over a timeframe that most people would not even consider "trading", has made me a "trader, out for patsies". You seem to have taken a research paper as some sort of personal derogation against your investment strategy. Let me clarify for you: do whatever the hell you like, I really don't care. I just thought to post a research paper for those who might find it as interesting a read as I did.

 

[craft]

Poppycock. As if in this market with HFT, stat arb, options, etc, anyone knows who/why the counterparty for their trade is. Buy and holders could be buying off a market timer, or an options arb guy, but they have to buy at some point. And it is clear from this thread that new buy and hold money is entering the market daily, so you can imagine at least some of the buy and holders were counterparty to the selling by market timers as cumulative breadth indices and long term MAs showed downtrend at the start of August..

A buy and hold investor only has one decision to make – At what price will they buy. Hopefully they wouldn’t be standing ready at extended valuations to be the counterparty for traders but after reading some forums who would know? but regardless as they only account for a small percentage of transactions they can’t be a significant counterparty to traders.

Mate, I don't want to assign you as a patsy, ever. Let alone always. Somehow posting a research paper that examines market timing over a timeframe that most people would not even consider "trading", has made me a "trader, out for patsies". You seem to have taken a research paper as some sort of personal derogation against your investment strategy. Let me clarify for you: do whatever the hell you like, I really don't care. I just thought to post a research paper for those who might find it as interesting a read as I did.

You put the paper up as relevant to long term holders – I didn’t take it personally just put a counter argument because I didn’t think it very relevant. Probably more relevant to other traders that don’t implement long-term momentum strategies – but I suspect they would not think much of it either.

There's no need to get hot under the collar - I'm happy to keep my thoughts to myself in the future.

 

[LifeChoices]

A buy and hold investor only has one decision to make – At what price will they buy.

So a buy and hold investor never sells - they just buy once, then eventually they die.

Not much fun in that scenario. However, I guess you could always smirk to yourself, while waiting to die, with the knowledge that you are richer and wiser than everyone else.

 

[Dowdy]

So a buy and hold investor never sells - they just buy once, then eventually they die.

Not much fun in that scenario. However, I guess you could always smirk to yourself, while waiting to die, with the knowledge that you are richer and wiser than everyone else.

Well some people want to pass on their stocks to their children. example. Jim Rogers (you can't say he's a bad investor - he's a billionaire!)

 

[Chasero]

Just curious, is anyone out there actually buying shares now with a long term view?

I'm thinking 4,000 will hold this week. Tho I am usually wrong!

 

[notting]

I like to stand with my hoof on market sentiments throat and I piss on it's face.
It seems to me that Greece is rushing through austerity measures to get it's next bail out.
Not going to default just yet you'd imagine.
Boing.

 

[Wysiwyg]

Just curious, is anyone out there actually buying shares now with a long term view?

I'm thinking 4,000 will hold this week. Tho I am usually wrong!

Yes I think the markets will bottom between now and the end of October so have one buy and hold. Send you a copy of the confirmation note if you don't believe me.

 

[LostMyShirt]

Just curious, is anyone out there actually buying shares now with a long term view?

I'm thinking 4,000 will hold this week. Tho I am usually wrong!

I am. I have this theory that the Gold mining stocks will outperform the market during this "concern". Since they are producing the one thing that people are rallying for, and stand to make money from the increased price.

 

[Tysonboss1]

Would an investment in an oil company worked out well if you bought when oil was hitting record highs back in 2008,

Why would an investment in a gold producer work out any better, when the gold price crashes you may regret it.

Plenty of other earth moving businesses with better profit margins,

 

[LostMyShirt]

I find it hard to believe it will crash back down to the likes of $1200 and even if it did there are a few up and comers still standing to profit greatly and have their sp chalked up to fair value. The longer it remains high the longer increased margins can be taken - and I find it hard to believe this debt issue, which is what drove people to gold in the first place, is going to go away any time soon.

This isn't oil were talking about here; it's gold. The reason it has spiked as of late, to name one, is the issue with American and European debt. When that settles (if) gold will settle. But for the time being the up and comers who had feasability studies done with a $1200 POG and have not yet reached target will stand to gain from the increased margins.

"What if" - what if the sky turns black tomorrow and the sun explodes?

 

[Tysonboss1]

That's right gold is not oil, it is not sustaining life as we know it, it just sits there.

There were many arguments of why oil would hit $200, but within weeks it dropped two thirds of it's value.

But anyway good luck with that,

By the way, a mine is just an earth moving operation, and iron ore and other commodities are more profitable and larger scale,

 

[LostMyShirt]

That's right gold is not oil, it is not sustaining life as we know it, it just sits there.

There were many arguments of why oil would hit $200, but within weeks it dropped two thirds of it's value.

But anyway good luck with that,

By the way, a mine is just an earth moving operation, and iron ore and other commodities are more profitable and larger scale,

I'll keep that in mind, thanks for the advice.

I agree though, Gold just sits there. Though as long as people use it as an investment item there is going to be a demand for it, and the producers stand to profit from such a demand, like what we have now.

 

[LifeChoices]

Horray, Europe is all fixed. Maybe we will see a decent rally today back up to 5000

 

[notting]

China's evil gesture of friendship, which they have a history of voicing before they perform horrendous unspekable acts upon people, was quite eye brow raising yesterday.

The last thing China wants is a fix for Euroland. They intentionally created the problem in the first place!

Did you notice the Chinese mixed their gesture of friendship whilst Europe seemed to be buckling at the knees with a grab for power and promises of assistence but zero commitments to anything!

These are the "good friends" who were, just the other day, shipping arms to Gadafi so he could continue to murder and brutalize his own people and cause problems for Euroland.
Just as the Chinese did with Magabe during his last sabotage of Zimbabwe elections.

Evil.

Bring on the Eurobond and start printing!

 

[Uncle Festivus]

You certainly have to be nimble. I think there could be a sizable rally going into the weekend, with a few proviso's -

1. if the Euro zone can kick the Greek (& Italian & French??) can through to the weekend on rhetoric
2. the US manufacturing data is 'better than expected' (but still terrible)
3. if 1 & 2 are true, then, the massive short positions in US stocks will get closed out causing a short covering rally

Now also assuming that a lower high for the Dow means a 'target' of around 11500-11600 for this week. Then, short the rally.....otherwise it's all risk to the downside as a Greek default finally gets 'priced in' (they have already defaulted, it's just that nobody want's to say it publicly...) As well as a double dip recession for the US if the manufacturing data comes in a shocker...

 

[RandR]

You certainly have to be nimble. I think there could be a sizable rally going into the weekend, with a few proviso's -

1. if the Euro zone can kick the Greek (& Italian & French??) can through to the weekend on rhetoric
2. the US manufacturing data is 'better than expected' (but still terrible)
3. if 1 & 2 are true, then, the massive short positions in US stocks will get closed out causing a short covering rally

Now also assuming that a lower high for the Dow means a 'target' of around 11500-11600 for this week. Then, short the rally.....otherwise it's all risk to the downside as a Greek default finally gets 'priced in' (they have already defaulted, it's just that nobody want's to say it publicly...) As well as a double dip recession for the US if the manufacturing data comes in a shocker...

Interesting couple of days ahead, after seeing the capitulation of the ASX200 yesterday afternoon it was quite perplexing to see europe (the dax especially) bounce.