XAO Banter Thread

[gartley]

I think timing the markets based on fundamentals is generally very hard.
There are not many economists with a consistent track record of timing markets or for that matter recessions until they have already started.
In fact fundamentals are quite often very good at market peaks and absolutely terrible at markets bottoms.
The market itself is the best barometer which is a reflection of mass social mood. Fundamentals can quite often lag the market by up to 6 months but I am sure even for the astute fundamentalists there is some writing on the wall even early on.

 

[Wysiwyg]

The market itself is the best barometer which is a reflection of mass social mood.

Oh I think not. Only the people that follow the market are aware of what is even happening and they would likely act but as for the social mood, people are none the wiser and thus not a reflection. The big money pros move the market.

 

[Wysiwyg]

XAO sure to crash Thursday following U.S. markets going stupid again this morning. The desperation to exit before the public holidays was awesome. Long positions were systematically terminated. They really know how to go to extremes of buying and selling. Best be on the right side or die a thousand times.

 

[InsvestoBoy]

Oh I think not. Only the people that follow the market are aware of what is even happening and they would likely act but as for the social mood, people are none the wiser and thus not a reflection. The big money pros move the market.

In the US, the Consumer Confidence Index - which tracks a much broader gauge of sentiment than "big money pros" or even "people that follow the market" - has a pretty strong correlation with deviations from long term fair value measures...

 

[MrChow]

Still another session overseas before the ASX opens on Thursday so a -100 point opening isn't gauranteed yet.

 

[Smurf1976]

In fact fundamentals are quite often very good at market peaks and absolutely terrible at markets bottoms.

It partly depends on what you define as "fundamentals" and whether we're looking at the overall "big picture" or whether we're looking at individual shares.

I tend to focus on the US market mostly in this regard but to my thinking all the warning signs of an impending top were in place by January 2018:

Shares at a high valuation.

Fed raising interest rates.

Bond market looked to have peaked (using 10 year Treasuries as the reference)

Oil prices rising.

From a fundamental perspective that all looks like a warning sign to me. It won't tell you the precise timing of the top, and it's possible we haven't actually seen the top yet (though it's looking plausible that we have but it's not a certainty), but it does tell you to be very alert looking for the top and that reducing exposure to the market would be wise if you're trading a long term view.

 

[Wysiwyg]

In the US, the Consumer Confidence Index - which tracks a much broader gauge of sentiment than "big money pros" or even "people that follow the market" - has a pretty strong correlation with deviations from long term fair value measures...

So it has been a depressing week for the American society? I know what comes first.

 

[Toyota Lexcen]

Can’t see any of the turmoil clearing until there is clarification on Britexit, trade war, the Fed, world banking bear market, EU issues.

The XAO will slowly get the 20-30% back over maybe 3-4 years at best.

Sentiment towards equities is very very poor.

People around the world want catastrophe and the stock market is a very easy place for it to happen.

 

[qldfrog]

Can’t see any of the turmoil clearing until there is clarification on Britexit, trade war, the Fed, world banking bear market, EU issues.

The XAO will slowly get the 20-30% back over maybe 3-4 years at best.

Sentiment towards equities is very very poor.

People around the world want catastrophe and the stock market is a very easy place for it to happen.

With tokyo at -5% last time i checked.we might see 5200 on the asx200 very soon
Even the optimistic forever Australiab investors may start to notice

 

[Smurf1976]

With tokyo at -5% last time i checked.we might see 5200 on the asx200 very soon

Stating the obvious I suppose but 1% daily declines have become 2% have become 3% and as you mention now 5% in some overseas markets.

Either there's a bottom and a halt to the declines in the very near future or we're in real trouble.

 

[qldfrog]

Kicking the debt can since 2008 is never going to end well, there is no "it is different now".
So whether the crash is here now or will be delayed, in my opinion, it is not worth the risk
so have been in USD,Gold,cash some short bonds ond bear eft fully for the last 6 months.
every day in the last two has been full of good $ news.just wondering if gold will stand.
It is also not that funny to be successful $ wise each time we head toward bad time.
people will suffer .are loosing their jobs houses and will not be happy with people like me if i profit then.yet i was just a doomy bearish guy a year ago when stating the obvious..
Being a contrarian is not easy

 

[lenny]

The market is certainly in a very precarious position atm with a break of the long term trendline off the GFC low and the illiquid Christmas holiday season. We could see 5000 (XJO) quickly.

 

[$20shoes]

My philosophy is the timing of this pullback is not yet supported by fundamental deterioration so I think we'll see a significant recovery that will mirror whatever the magnitude is IE. a +20% type bounce.

Yield inversion is possible in H1 2019 but that typically is around a 12 month leading indicator suggesting no recession until 2020.

Im a bit conflicted. I can count another impulse wave up still to come on the S&P500 but like Porpers wave count for our markets which suggests we're probably in a higher degree Wave C lower.

If you look at a possible wave count in the Super Cycle degree of the S&P500, Wave 1 completed in 1929, Wave 2 in completed in 1933 as a zig zag lasting four years.
Wave 3 completed in 2000.
Wave 4 completed in a little over 8 years with the GFC low.

“Elliot Wave Principle” 10th Edition, on page 148 elaborates on Fibo Time progresssions

1929+3 = 1932 Bear Market
1929+5 = 1934 Correction Bottom
1929+8 = 1937 bull market top
1929+13 = 1942 bear market bottom
1928+21 = 1949 bear market bottom
1928+34 = 1962 crash bottom
1928+55 = 1983 probable Supercycle peak
_____________________________________

Frost and Prechter on page 149 then note a time deviation of plus or minus two units away from the exact Fib ratio for numbers 55 and 89.

So next in sequence would be

1929+89 = 2018 or S&P500 possible top range 2016-2020
OR
1928+89 = 2017 or S&P500 possible top range 2015-2019

I can do a count where we have one more impulse up on the S&P500 but that would complete Grand Super Cycle Wave 1 for the S&P500 which began many generations ago.

 

[MrChow]

ASX returns including dividends has never been negative over a 10 year period.

ASX returns including dividends have beaten bonds 85% of the time over a 10 year period.

https://www.asx.com.au/images/resources/201208-does-long-term-share-investing-still-work-image2.gif

 

[gartley]

Kicking the debt can since 2008 is never going to end well, there is no "it is different now".
So whether the crash is here now or will be delayed, in my opinion, it is not worth the risk
so have been in USD,Gold,cash some short bonds ond bear eft fully for the last 6 months.
every day in the last two has been full of good $ news.just wondering if gold will stand.
It is also not that funny to be successful $ wise each time we head toward bad time.
people will suffer .are loosing their jobs houses and will not be happy with people like me if i profit then.yet i was just a doomy bearish guy a year ago when stating the obvious..
Being a contrarian is not easy

Likewise with Gold, Silver in AUD, USD)) .
Did likewise during the GFC.
Only other addition to this decline, have loaded up on SQQQ ( 3xBEAR NASDAQ ETF) because of the over inflated FAANGS.
Your right, being a contrarian is very hard in the face of extreme optimism and flak copped by the majority. But if you are going to be successful as a contrarian it can't be any other way can it?

 

[gartley]

Im a bit conflicted. I can count another impulse wave up still to come on the S&P500 but like Porpers wave count for our markets which suggests we're probably in a higher degree Wave C lower.

If you look at a possible wave count in the Super Cycle degree of the S&P500, Wave 1 completed in 1929, Wave 2 in completed in 1933 as a zig zag lasting four years.
Wave 3 completed in 2000.
Wave 4 completed in a little over 8 years with the GFC low.

“Elliot Wave Principle” 10th Edition, on page 148 elaborates on Fibo Time progresssions

1929+3 = 1932 Bear Market
1929+5 = 1934 Correction Bottom
1929+8 = 1937 bull market top
1929+13 = 1942 bear market bottom
1928+21 = 1949 bear market bottom
1928+34 = 1962 crash bottom
1928+55 = 1983 probable Supercycle peak
_____________________________________

Frost and Prechter on page 149 then note a time deviation of plus or minus two units away from the exact Fib ratio for numbers 55 and 89.

So next in sequence would be

1929+89 = 2018 or S&P500 possible top range 2016-2020
OR
1928+89 = 2017 or S&P500 possible top range 2015-2019

I can do a count where we have one more impulse up on the S&P500 but that would complete Grand Super Cycle Wave 1 for the S&P500 which began many generations ago.

Having used EW in my trading for over 20 years, I would say don't even bother using EW for longer term projections. It's hard enough getting it right in the short to medium term))
Simply looking at the current pattern of trend in the US markets, it's pretty easy to see this is a 3rd wave of sorts here, and that the selling will continue. That's the beauty of clear impulse waves unfolding in a bear market given the shear panic and emotion involved.
Expecting a bounce starting this week but overall trend to continue down until next long/medium term time point in approx March/April @ 4800-5000 obvious support level

https://invst.ly/9m6q1

 

[gartley]

Oh I think not. Only the people that follow the market are aware of what is even happening and they would likely act but as for the social mood, people are none the wiser and thus not a reflection. The big money pros move the market.

And the big market pros who move the markets including the hedge funds are PEOPLE. Hope, fear and greed are thus the primary driver. Always has been and always will be. In this case it's mass fear and if you think I am wrong then why has the residential property market been tanking for the last 12 months, because of the market pro's? Don't think so

 

[$20shoes]

And the big market pros who move the markets including the hedge funds are PEOPLE. Hope, fear and greed are thus the primary driver. Always has been and always will be. In this case it's mass fear and if you think I am wrong then why has the residential property market been tanking for the last 12 months, because of the market pro's? Don't think so

In my humble experience, the aggregate of herding instinct is the best explanation of the forces driving market moves. Everything else fits inside this as constructs that help perpetuate the mood or characteristics of the market structure at that point in time. I don't think big money works exclusive to this. I think they work within the same herding patterns.

 

[MrChow]

As of 2am futures indicate around -90 points for the XAO today.

 

[sptrawler]

So is this the biggest 'dead cat bounce' in a 100 years, or a return to the bull market?
I'm for the former.
When does the RC findings get published?