Why is our market so down?

[CATAPILLAR]

Just wondering why All Ords is down for so long when US market have had some upward/downward movement. This is the sixth day the market been negative. If the subprime doesn't effect Australia as much as US why are we so low in confidence?
CATAPILLAR

 

[prawn_86]

Perhaps we are decoupling downwards instead of up? :

 

[Bushman]

I would change 'why is our market down' with 'any reasons for our market to be up'? I am racking my brain for an answer. Maybe if those Yank Investment Banks say they have contained their losses then we might have a chance as the credit markets start to thaw.

 

[numbercruncher]

All we have to offer the world is stuff from holes in the ground, if demand slows, we get spanked, If demand increases we rock on

 

[Wysiwyg]

All we have to offer the world is stuff from holes in the ground, if demand slows, we get spanked, If demand increases we rock on

Gold nerds reckon there is 285 gold and silver companies listed here.

Is that a record.How many more are gonna jump on the bandwagon?

 

[tronic72]

All we have to offer the world is stuff from holes in the ground, if demand slows, we get spanked, If demand increases we rock on

I couldn't agree more.

Sure the Commodities stocks have done well and some people have made a packet but it's getting a lot harder. As for spec stocks, they are EVERYWHERE. People have been throwing money at companies with a view that they MIGHT find something. (myself included) but I'm certainly less keen to do it these days.

I think companies that provide services will start to come back in favour. We no longer have much in the way of farm produce to offer the world (shame considering the current wheat price) wool can't be given away and the commodities boom is just that)

 

[ta2693]

"God make it happen and give you a chance to make you rich once in a lifetime. Sell you house and put you money into the market." Just kidding

 

[shaunnell]

Just wondering why All Ords is down for so long when US market have had some upward/downward movement.

I've often heard the saying "When America sneezes, we catch a cold".
Maybe this time the cold is a nasty one that may even be the flu.
It is frustrating, especially for someone like myself that does not understand macro economics, how credit problems in the US can affect my insert Australian company of choice here

 

[Nyden]

Sigh, base metals up...and commodity stocks? What do you know, down! A long with every blooming other stock. What's todays reason? How can we fall for 7 days straight...it's rubbish. The US hasn't even fallen that hard this week. They go up 60pts, we go down. They go down 25, we go down 36.

We can't just ignore their gains, yet overstep their drops. It's just ridiculous.

Gov should abolish CGT at the 12 month holding period for shares, that would get interest back into the markets

 

[Yezzy]

Sigh, base metals up...and commodity stocks? What do ...
Gov should abolish CGT at the 12 month holding period for shares, that would get interest back into the markets

They don't tax losses :

 

[Nyden]

They don't tax losses :

There wouldn't be losses, if they did that

 

[M34N]

Sigh, base metals up...and commodity stocks? What do you know, down! A long with every blooming other stock. What's todays reason? How can we fall for 7 days straight...it's rubbish. The US hasn't even fallen that hard this week. They go up 60pts, we go down. They go down 25, we go down 36.

We can't just ignore their gains, yet overstep their drops. It's just ridiculous.

Gov should abolish CGT at the 12 month holding period for shares, that would get interest back into the markets

To me, this sounds like a buying opportunity, a lot of people who are bailing are the same nervous folk who bailed during the August "crisis". But only time will tell whether I'm right, or wrong. But who knows, we've fallen very hard very fast lately so I'm cautiously investing in this market.

I personally believe if things get much worse, the central banks across the world will be forced to lower rates again, probably more fiercely, and hopefully that will help restore confidence again. This is the main reason why I still believe in the market now, otherwise I wouldn't put a cent in and put it into some term deposit account.

FYI, the 7 day losing streak is actually the longest in 5 years, according to CNBC.

 

[vishalt]

Relax peeps, our market is still way up, I hope it finds a bottom soon and consolidates for weeks there so we can start trumping upwards linearly again.

I've also noticed that there's always a lag between when metal prices jumps and the effect on stocks. I remember when metals where going crazy at 5% high each day yet BHP would struggle and sit around at $24 (before shooting to $47.50).

Just figure out whats a good buy!

 

[wayneL]

How can we fall for 7 days straight...it's rubbish.

You haven't been trading very long have you?

 

[Nyden]

You haven't been trading very long have you?

Define very long? Very long as in 4-5 years, or 30? :

I'm still under the belief that everything is generally fine, and that everyone is overreacting. A few companies made a few stupid greedy mistakes, & business will continue as usual... minus a few home owners.

As mentioned by someone else here - this hasn't happened since 2002, so I believe labelling it as rubbish is justifiable, as it's obviously not a common occurrence (and I'm sure it was rubbish back then as well).

I tend to believe that the whole concept of recessions, & slow downs are inefficient to the market; what's the point of going down, if it's only going to go back up - should just instead slowly climb as opposed to swinging one way, & then the other. I'm sure many try to keep the market that way, though

I guess if there's one thing in this world to rely on - it's that people are idiotic morons, fooled into debt, fooled into losses, & they never learn. How can we make money off of this?


Not to mention Wayne, as is my understanding; you're some kind of uber bear : So I shall take what you say with a grain of salt

 

[M34N]

You haven't been trading very long have you?

To be honest, I've only been doing it for about 2-3 years (actively trading, but have watched for much longer), and don't remember a fall this long either.

All I can say; "Buy when there's blood in the streets".

Best quote I've ever heard.

 

[wayneL]

Define very long? Very long as in 4-5 years, or 30? :

I'm still under the belief that everything is generally fine, and that everyone is overreacting. A few companies made a few stupid greedy mistakes, & business will continue as usual... minus a few home owners.

As mentioned by someone else here - this hasn't happened since 2002, so I believe labelling it as rubbish is justifiable, as it's obviously not a common occurrence (and I'm sure it was rubbish back then as well).

I tend to believe that the whole concept of recessions, & slow downs are inefficient to the market; what's the point of going down, if it's only going to go back up - should just instead slowly climb as opposed to swinging one way, & then the other. I'm sure many try to keep the market that way, though

I guess if there's one thing in this world to rely on - it's that people are idiotic morons, fooled into debt, fooled into losses, & they never learn. How can we make money off of this?

Why is it fine to go up 7 days in a row but rubbish to go down 7 days in a row?

The markets are nothing more than an auctioning mechanism for a group of assets and do what they will do, supply and demand. They will go down 20 days in a row if they want to.

As far as "what's the point of going down, if it's only going to go back up - should just instead slowly climb as opposed to swinging one way, & then the other" goes... ROTFL! Would you be happy to pay $10 for Centro? It'll go back up one day! How about RAMS, HIH etc etc etc?

What you are talking about is the complete disregard of risk... and that is why we find ourselves where we are.

 

[Real1ty]

To me, this sounds like a buying opportunity, a lot of people who are bailing are the same nervous folk who bailed during the August "crisis". But only time will tell whether I'm right, or wrong. But who knows, we've fallen very hard very fast lately so I'm cautiously investing in this market.

I personally believe if things get much worse, the central banks across the world will be forced to lower rates again, probably more fiercely, and hopefully that will help restore confidence again. This is the main reason why I still believe in the market now, otherwise I wouldn't put a cent in and put it into some term deposit account.

FYI, the 7 day losing streak is actually the longest in 5 years, according to CNBC.

a lot of people who are bailing are the same nervous folk who bailed during the August "crisis".

Yes but the August crises is what alerted everyone to the issue.
Then from there people expected it to be a short term thing.

"she'll be right mate", that is the attitude people get when the markets have been so good, throw a line and reel in a profit.

Then the effects started to show up in different areas, combined with high inflation, houses with the value of tin sheds and slowing growth.

Then people realised, "****, this thing is bigger than we thought"
"I wonder if this might actually effect us here?"

Bam, enter Centro, Bam enter realisation that it MIGHT actually be more far reaching than we thought and that have we seen the worst of it yet?

But who knows, we've fallen very hard very fast lately so I'm cautiously investing in this market.

I don't think we have when you consider where we have come from.

People have become accustomed to us bouncing back and are not used to the volatility or the extended losses.

I personally believe if things get much worse, the central banks across the world will be forced to lower rates again, probably more fiercely, and hopefully that will help restore confidence again.

They might do that yes, but one of the problems they face is inflation is at high levels already.

As for restoring confidence, imo, that would not be a good thing in the long run.
While it is harsh and while most of us are hurting a bit from the backtracking we are doing, most of us probably need a good slap around the head to knock some sense into us and get us to re evaluate our risk management.

All the above is a very simplistic view, as i am certainly no economic evaluator

Just my 2c
Actually, i shouldn't risk 2, just my 1c

 

[Nyden]

Why is it fine to go up 7 days in a row but rubbish to go down 7 days in a row?

The markets are nothing more than an auctioning mechanism for a group of assets and do what they will do, supply and demand. They will go down 20 days in a row if they want to.

As far as "what's the point of going down, if it's only going to go back up - should just instead slowly climb as opposed to swinging one way, & then the other" goes... ROTFL! Would you be happy to pay $10 for Centro? It'll go back up one day! How about RAMS, HIH etc etc etc?

What you are talking about is the complete disregard of risk... and that is why we find ourselves where we are.

The disregard for risk is tied to the fact that a lot of stocks may be over-valued as a result of people never foreseeing any kind of slow down, I guess that's the difference between the markets, & a savings account though.

I believe you misunderstand me; my real objections are tied to the fact that we'll drop massively one day, rally hard the next - what efficieny is there in that? It's irrational behaviour. Our market is irrational at the moment, and I very much dislike it :

I do understand that many markets are cyclical, and that recessions need to occur - I guess my real frustration is tied to short-term instanbility. News is perceived differently every hour, everything is twisted & manipulated...I just don't like it, is all.


That isn't good either Wayne - to go up for 7 days, that's what I dislike. Up heavy for 7 days, down heavy for 7 days. At the end of it - "What was the point of that?" I guess this is from an investors perspective though, as opposed to a trader. I'd prefer a slow, & steady market as opposed to a red-hot one day, iced cold the next.

 

[wayneL]

The disregard for risk is tied to the fact that a lot of stocks may be over-valued as a result of people never foreseeing any kind of slow down, I guess that's the difference between the markets, & a savings account though.

I believe you misunderstand me; my real objections are tied to the fact that we'll drop massively one day, rally hard the next - what efficieny is there in that? It's irrational behaviour. Our market is irrational at the moment, and I very much dislike it :

I do understand that many markets are cyclical, and that recessions need to occur - I guess my real frustration is tied to short-term instanbility. News is perceived differently every hour, everything is twisted & manipulated...I just don't like it, is all.

Sure it's irrational! How many rational humans do you know, particularly when greed and fear become involved?

You have two choices really. 1/Trade the irrationality (day and short term trading) or 2/ Take a few steps back, ignore the volatilty, and take long term trends, or buy and hold...