XAO Banter Thread

[Smurf1976]

I'm referring to the reality that in the past the mere hint of political instability sent markets down.

In 2017 not even missiles actually being fired over Japan is seen as a negative by markets.

It just seems that all news is seen as good news be it financial, political or anything else. The market now goes up on account of events that in the past would have sparked a sell off.

I don't have any hard stats to back this but it's how it looks to me.

 

[Logique]

Agree. Teflon-coated US market in particular.

 

[InsvestoBoy]

I can't remember where I read this but some investor once said:

The best way to tell if you're in a bull market: the market goes up on good news, the market goes up on bad news.

The best way to tell if you're in a bear market: the market goes down on bad news, the market goes down on good news.

 

[InsvestoBoy]

Maybe it was Stock Market Wizards?

When markets are trending up strongly, and there is bad news, the bad news counts for nothing. But if there is a break that reminds people what it is like to lose money in equities, then suddenly the buying is not mindless anymore. People start looking at the fundamentals, and in this case I knew the fundamentals were very ugly indeed.

Now that you have switched from net long to net short, what would get you long again? – Buying. If all of a sudden stocks stopped going down on bad news that would be a positive sign.

 

[notting]

I mean are they the types of things that have a negative effect on the profitability of companies to an extent that the companies valuation should change and owners should sell for less?

Well not necessarily a rational market, but the stock market, historically does react to potential world wars, Europe falling apart and lunatic presidents chosen by Russians. Well yeah it's unusual for sure.

But probably not so much when, companies are going to get the best of the tax cuts so will be more profitable after tax, which makes them more attractive for shareholders, who will also make more after tax profit by not selling yet. On top of that the companies are all pretty much buying back their own stock with borrowed cheap money to add to the bonanza because after the tax cuts that would prove to have been a value added investment.

Is this a sign of the first crack appearing in the tax bill? -



Sounds like a caveat for big bill failure, 'we did get something through look at all this -.'

 

[Value Collector]

I'm referring to the reality that in the past the mere hint of political instability sent markets down.

In 2017 not even missiles actually being fired over Japan is seen as a negative by markets.

Maybe the market has been rocked by so many things in the last 17 years, its slowly been realised that the economy is pretty resilient, e.g Terror attacks, wars, nuclear meltdowns, hurricanes, earthquakes, Donald trump, North Koreans etc etc don't tend to reduce the profit of the Coca Cola company.

So people don't want to panic sell their shares as easily, they are desensitised.

A giant earth quake is a human tragedy, and people will feel bad, but they will still go to the movies and buy a coke with lunch tomorrow, and the world will keep turning.

 

[notting]

Maybe the market has been rocked by so many things in the last 17 years, its slowly been realised that the economy is pretty resilient, e.g Terror attacks, wars, nuclear meltdowns, hurricanes, earthquakes, Donald trump, North Koreans etc etc don't tend to reduce the profit of the Coca Cola company.

So people don't want to panic sell their shares as easily, they are desensitized.

A giant earth quake is a human tragedy, and people will feel bad, but they will still go to the movies and buy a coke with lunch tomorrow, and the world will keep turning.

As a long term investor that is a view one can bank on, providing the population is still expanding on earth!

Historically, markets are driven by human nature and when ever you think the paradigm has changed beyond that, somehow, you get into some medium and short term turmoil like 50% draw downs and so on.

However, the new emergence of all kinds of ETFs being preferred by investors on the whole as a way of managing risk and their ability to cope psychologically with being hung over a cliff, in the wake of the GFC does seem to have curtailed volatility as has all the machine based, technical trading which could be moving the dial on that historical human nature factor.

But then there will be the machine or ETF based black swan that no one saw coming and the crash will be like nothing you have ever seen before!

 

[Smurf1976]

But then there will be the machine or ETF based black swan that no one saw coming

Something I learned long ago about forecasting, modelling etc is that there's always some combination of events that nobody foresaw or which was so unlikely it wasn't considered credible. That's the one that gets you when it happens.

Real world things like engineering provide plenty of examples like that.

Circa year 2000 I was involved with finding the cause of an electronic control system which had been in constant (24/7/365) operation since 1977 and has suddenly failed for no apparent reason.

Long story short - after a lot of investigation it was found that nothing had broken as was first assumed but that a specific combination of inputs occurring in the right order and timing would immediately cause it to fail. It had taken more than two decades to occur but the vulnerability was there right from the start just waiting for the required trigger to make it fail. Once that was known it could be made to fail consistently by triggering the problematic input sequence.

It's very likely that the large scale automated trading systems will have vulnerabilities of that nature. Some combination of otherwise harmless events which nobody thought of and which causes an undesirable outcome. It's not certain but it's very plausible and we'll only know for sure if it actually happens.

 

[Value Collector]

But then there will be the machine or ETF based black swan that no one saw coming and the crash will be like nothing you have ever seen before!

I tend to agree with what Charlie says here.

 

[Value Collector]

It's very likely that the large scale automated trading systems will have vulnerabilities of that nature. Some combination of otherwise harmless events which nobody thought of and which causes an undesirable outcome. It's not certain but it's very plausible and we'll only know for sure if it actually happens.

That wouldn't affect true "rational Investors", in would be something for them to take advantage of.

 

[qldfrog]

is it just me or is today's trade graph a bit scary

 

[rb250660]

Bloody Barnaby and his foreign mates did that.

 

[qldfrog]

Bloody Barnaby and his foreign mates did that.

yeap, forgot about that, this explains..some more wasted time ahead for Australia.
As if we can afford any more of this stagnation and political vacuum.

 

[Logique]

yeap, forgot about that, this explains..some more wasted time ahead for Australia.
As if we can afford any more of this stagnation and political vacuum.

As rb said above, it had much to do with the Federal politics of the day, and the fear that it may bring us closer to a royal commission into the banks. But on the overnight O/s lead and Futs, it looks like a better day on Monday

 

[gartley]

All Ords at or approaching significant time point here. SPX monthly cycles at extreme level relative to earlier major tops. 86 month cycle pointed down already and all it needs is either of the 42 or 22 month cycle to point down and join it and see ya later

 

[Triathlete]

All Ords at or approaching significant time point here. SPX monthly cycles at extreme level relative to earlier major tops. 86 month cycle pointed down already and all it needs is either of the 42 or 22 month cycle to point down and join it and see ya later

Maybe it was a last push to break and stay above 6000??? Nervous times...Any comments on the XAO monthly chart attached...??
Does anyone else have an opinion in regards to EW with their own chart.???

 

[Joules MM1]

Maybe it was a last push to break and stay above 6000??? Nervous times...Any comments on the XAO monthly chart attached...??
Does anyone else have an opinion in regards to EW with their own chart.???

View attachment 73187

for a probability conversation to begin the chart needs to be correctly labeled

see 1 and 2 (squared)

 

[gartley]

Maybe it was a last push to break and stay above 6000??? Nervous times...Any comments on the XAO monthly chart attached...??
Does anyone else have an opinion in regards to EW with their own chart.???

View attachment 73187

Largely depends how far Wall Street crooks and Fed fraudsters continue to pump up US markets))

 

[Triathlete]

for a probability conversation to begin the chart needs to be correctly labeled

see 1 and 2 (squared)

Yeh I see what you mean

 

[Triathlete]

for a probability conversation to begin the chart needs to be correctly labeled

see 1 and 2 (squared)