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When do you expect the next Correction?
- Thread starter YOUNG_TRADER
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hehe today for me - but corrections are good, they take some steam out, and provide buying opportunities for discounted stock.
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Maybe end of January or Feb. I don't think last night / today is the start of anything yet.
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swingstar said:
Maybe so, but wiped the smile off my face
Holding BHP and WPL like the rest of the planet probably... Ouch!
Kipp
Lord of the Ledgers
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Frinky if memory serves.... was one who played the correction one pretty well. I'm pretty sure you were on the ZFX bandwagon but got out pretty quick, and I remember you saying that you "out of everything" by about May 18. I was just too afraid to take a loss on stocks that were up 15-20% two weeks previously...professor_frink said:
And for the bears like Wayne, I'm sure every correction presents an opportunity to make a make by shorting an overhyped Copper producer, or even in just shorting the indices.
It didn't scar me for life but it was good lesson to learn... at least stocks are liquid enough to get of any time you like. In the property market it can be alot tougher...
Kipp
Lord of the Ledgers
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A weird part of me is kind of glad to have the odd red day... too many days on end of crazy gains (70+ points) is unsustainable and sets the scene for a correction.swingstar said:
Tomorrow could be a more serious red day than today. The UK market is taking a battering, with stocks like BHP and RIO down 4.6% and 3.5% respectively... So unless the US markets do something extraordinary (which is probably unlikely seeing as last night's inflation news destroyed investor sentiment), we could see a drop of close to 2% tomorrow. That said, I think the correction's here!Kipp said:
brerwallabi
The Oracle
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Well the UK now their lunchtime is a lot better then it was 2 hours ago.
Resource sector is down 2.95% in London.
Resource sector is down 2.95% in London.
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Early Feb
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Could be soon. I imagine we would follow a US lead.
Apparently existing home sales fell an annualised rate of 8.4% the largest annual decline in 17 years. If you add this to data coming out toward the end of last year showing the fastest falls in New House sales on record, then I guess Soft landing vs Hard landing is back on the agenda.
As many worldwide in countries such as the USA, UK and Australia are using huge unsustainable rises in RE not only as an increase for consumer confidence, but also using 'The Wealth Effect' and their homes as ATMs to borrow for consumer goods, we are witnessing double digit credit growth. The generation Y's who can't afford housing, they are pumping all their disposal income into the economy.
Its good because its flowing back into goods and services and boosting company profits, but unfortunaly is not sustainble. We are starting to see retail spending, building products and metals falling so you wonder if there will be any surprises come 6 monthly reporting season. . . After all, they say Copper has a PHD in economics, it is used in piping, electrical wiring etc in houses, business and industry. Maybe Copper has something to tell us?
Apparently existing home sales fell an annualised rate of 8.4% the largest annual decline in 17 years. If you add this to data coming out toward the end of last year showing the fastest falls in New House sales on record, then I guess Soft landing vs Hard landing is back on the agenda.
As many worldwide in countries such as the USA, UK and Australia are using huge unsustainable rises in RE not only as an increase for consumer confidence, but also using 'The Wealth Effect' and their homes as ATMs to borrow for consumer goods, we are witnessing double digit credit growth. The generation Y's who can't afford housing, they are pumping all their disposal income into the economy.
Its good because its flowing back into goods and services and boosting company profits, but unfortunaly is not sustainble. We are starting to see retail spending, building products and metals falling so you wonder if there will be any surprises come 6 monthly reporting season. . . After all, they say Copper has a PHD in economics, it is used in piping, electrical wiring etc in houses, business and industry. Maybe Copper has something to tell us?
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who knows!!! you cant control your profits, only losses so ensure your stops are in place and the rest will look after its self!!!
they usually happen when u least expect.
they usually happen when u least expect.
Garpal Gumnut
Ross Island Hotel
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I agree with you rustyheela. Who knows, watch and wait, it will come, be prepared if it does. Although it may not happen this year, it is in the nature of markets to correct and have bad bearish corrections. I've been through 87 and 97 and they came suddenly. I suppose if I were to place a bet on it, Oct 2007 would be the month and year I'd punt on. There is much euphoria now, heaps borrowing, margin loans at a high, cdf's make it easy to trade, many stocks are on the up and up. The old rogues who were on the boards of resource stocks in the seveties/eighties, and tech stocks in the nineties are now re-appearing on uranium and zinc boards. Everyone I know owns shares, the barber discusses it with me...etc. One must be wary. Tulips might be the next hot pick. Garpal
IFocus
You are arguing with a Galah
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CanOz
Home runs feel good, but base hits pay bills!
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So whats the typical retracement?
CanOz
Home runs feel good, but base hits pay bills!
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Always two sides to a coin.
WASHINGTON (AFP) - After a surprising show of strength in the US economy, the Federal Reserve is likely to keep interest rates steady at its upcoming monetary policy meeting to see if the trend continues, analysts say.
The Federal Open Market Committee, which meets Wednesday, is widely expected to keep its base rate at 5.25 percent, where it has been since August, when the panel halted a series of 17 consecutive quarter-point increases to stem inflation.
In addition, the central bank is likely to maintain its warning or "bias" toward another rate increase, which analysts say is aimed at keeping inflation expectations in check.
While most Fed-watchers see no change in the funds rate Wednesday, more significant will be the statement on the panel's assessment of economic conditions, which will provide clues on the Fed's next move.
Stronger-than-expected data has eased concerns that the economy might slip into recession. At the same time it has diminished prospects for a rate cut that might be needed to stimulate activity, say economists.
"The problem for the Fed is that the FOMC meets (this) week and they have these strong housing data and even better general economic numbers to contend with," said Joel Naroff of Naroff Economic Advisors. "The slowdown they had been pointing to is no longer there."
John Lonski, chief economist at Moody's Investors Service said the Fed is starting to come to grips with a stronger economy.
"If anything, the likelihood of a change in Fed policy is now shifting from a rate cut to a rate increase," Lonski said.
Even though the labor market is tightening and boosting wage inflation pressures, Lonski said that "the idea of a rate hike cannot be taken seriously until the uncertainties surrounding housing have been sufficiently resolved."
In the past few weeks, even the most bearish analysts have been upgrading their forecasts from a gloomy outlook to one that shows steady and moderate growth for the fourth quarter of 2006 and early 2007.
Data in the past few weeks showed US employers added a healthy 167,000 new jobs in December, while the housing market, the main source of economic weakness, appears to have stabilized.
New home sales rose 4.8 percent in December, defying expectations of weakness and US home resales slipped 0.8 percent, leading some economists to suggests that the worst of the housing slump is over.
Deutsche Bank chief US economist Joseph LaVorgna, who a month ago had projected zero growth in the fourth quarter, is now considerably more optimistic.
LaVorgna now sees fourth-quarter growth at a 2.3 percent annualized pace and a 1.8 percent expansion in the first quarter of 2007.
"Since early December nearly every one of the major monthly economic indicators that we track was stronger than expected," he said.
Lavorgna said he still believes the Fed will cut rates, but later than he had earlier predicted and not as much.
"We have pushed our forecast for the timing of the Fed's first rate cut to the second half this year," he said. "As a result, we now see the Fed cutting rates only 50 basis points, not the 100 basis points we had thought before, when the economy looked like it was ready to crack."
Other analysts say the economy is even stronger, and that the Fed may have to consider hiking rates instead of lowering them.
Citigroup chief economist Lewis Alexander sees overall economic growth for 2007 at 3.1 percent.
"Despite the crash in housing, the US economy overall remains set for a soft landing, with average growth in the 3.0 to 3.5 range in 2007," he said.
"Corporate finances overall are in good shape, financial conditions are slightly accommodative, job growth remains healthy, and lower oil prices are lifting real incomes. Second, housing demand already shows signs that the worst of the downturn has passed and the imbalance between demand and supply is starting to ease."
Beata Caranci, senior economist at TD Bank Financial Group, said she sees the Fed holding rates steady for an extended period.
She said consumer spending remains strong, keeping growth on track despite weakness in housing.
"Consumer spending growth will remain partially shielded from deteriorating wealth effects, and the economy will track a reasonably healthy, but still subpar 2.5 to 3.0 percent quarterly pace, before accelerating into 2008," Caranci said.
"In this environment, the Fed is unlikely to feel any urgency to cut rates."
WASHINGTON (AFP) - After a surprising show of strength in the US economy, the Federal Reserve is likely to keep interest rates steady at its upcoming monetary policy meeting to see if the trend continues, analysts say.
The Federal Open Market Committee, which meets Wednesday, is widely expected to keep its base rate at 5.25 percent, where it has been since August, when the panel halted a series of 17 consecutive quarter-point increases to stem inflation.
In addition, the central bank is likely to maintain its warning or "bias" toward another rate increase, which analysts say is aimed at keeping inflation expectations in check.
While most Fed-watchers see no change in the funds rate Wednesday, more significant will be the statement on the panel's assessment of economic conditions, which will provide clues on the Fed's next move.
Stronger-than-expected data has eased concerns that the economy might slip into recession. At the same time it has diminished prospects for a rate cut that might be needed to stimulate activity, say economists.
"The problem for the Fed is that the FOMC meets (this) week and they have these strong housing data and even better general economic numbers to contend with," said Joel Naroff of Naroff Economic Advisors. "The slowdown they had been pointing to is no longer there."
John Lonski, chief economist at Moody's Investors Service said the Fed is starting to come to grips with a stronger economy.
"If anything, the likelihood of a change in Fed policy is now shifting from a rate cut to a rate increase," Lonski said.
Even though the labor market is tightening and boosting wage inflation pressures, Lonski said that "the idea of a rate hike cannot be taken seriously until the uncertainties surrounding housing have been sufficiently resolved."
In the past few weeks, even the most bearish analysts have been upgrading their forecasts from a gloomy outlook to one that shows steady and moderate growth for the fourth quarter of 2006 and early 2007.
Data in the past few weeks showed US employers added a healthy 167,000 new jobs in December, while the housing market, the main source of economic weakness, appears to have stabilized.
New home sales rose 4.8 percent in December, defying expectations of weakness and US home resales slipped 0.8 percent, leading some economists to suggests that the worst of the housing slump is over.
Deutsche Bank chief US economist Joseph LaVorgna, who a month ago had projected zero growth in the fourth quarter, is now considerably more optimistic.
LaVorgna now sees fourth-quarter growth at a 2.3 percent annualized pace and a 1.8 percent expansion in the first quarter of 2007.
"Since early December nearly every one of the major monthly economic indicators that we track was stronger than expected," he said.
Lavorgna said he still believes the Fed will cut rates, but later than he had earlier predicted and not as much.
"We have pushed our forecast for the timing of the Fed's first rate cut to the second half this year," he said. "As a result, we now see the Fed cutting rates only 50 basis points, not the 100 basis points we had thought before, when the economy looked like it was ready to crack."
Other analysts say the economy is even stronger, and that the Fed may have to consider hiking rates instead of lowering them.
Citigroup chief economist Lewis Alexander sees overall economic growth for 2007 at 3.1 percent.
"Despite the crash in housing, the US economy overall remains set for a soft landing, with average growth in the 3.0 to 3.5 range in 2007," he said.
"Corporate finances overall are in good shape, financial conditions are slightly accommodative, job growth remains healthy, and lower oil prices are lifting real incomes. Second, housing demand already shows signs that the worst of the downturn has passed and the imbalance between demand and supply is starting to ease."
Beata Caranci, senior economist at TD Bank Financial Group, said she sees the Fed holding rates steady for an extended period.
She said consumer spending remains strong, keeping growth on track despite weakness in housing.
"Consumer spending growth will remain partially shielded from deteriorating wealth effects, and the economy will track a reasonably healthy, but still subpar 2.5 to 3.0 percent quarterly pace, before accelerating into 2008," Caranci said.
"In this environment, the Fed is unlikely to feel any urgency to cut rates."
theasxgorilla
Problem solved... next bubble.
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CanOz said:
That's the thing! The way it's been drawn it's an extention of a retracement that is actually an extention. I see how it lines up at the 161.8% level, but I'm not sure what it means.
