Black Monday

[BlackPeter]

Are you referring to the Rothschild report that @BlackCross posted?

There was a number of posts preparing us for the next big crash (one from Sgt Pepper a bit up the page), but yes, the Rothschild report does as well talk a lot about problems to come (Chinese Banking, Brexit, American Elections, Middle East conflict and many many more). Sure - but again, whats new? The world has always had a large number of problems and conflicts and can't stop worrying about them. WWII, the communist threat, nuclear overkill, peak oil, global warming are just some of them - and still, the globe kept turning and the long term trend for stocks kept pointing upwards ...

[Baa_Baa]

There was a number of posts preparing us for the next big crash (one from Sgt Pepper a bit up the page), but yes, the Rothschild report does as well talk a lot about problems to come (Chinese Banking, Brexit, American Elections, Middle East conflict and many many more). Sure - but again, whats new? The world has always had a large number of problems and conflicts and can't stop worrying about them. WWII, the communist threat, nuclear overkill, peak oil, global warming are just some of them - and still, the globe kept turning and the long term trend for stocks kept pointing upwards ...

Yes that's true, I didn't read the Rothschild commentary as a "doomsday prophet" though, it just pointed out a number of risks to markets they they observe, all seem quite valid, but more interesting was their response weighting and de-weighting portfolio percentages. It's good to read what such a large investor is doing and how they view the market risks and opportunities.

[arc]

There was a number of posts preparing us for the next big crash (one from Sgt Pepper a bit up the page), but yes, the Rothschild report does as well talk a lot about problems to come (Chinese Banking, Brexit, American Elections, Middle East conflict and many many more). Sure - but again, whats new? The world has always had a large number of problems and conflicts and can't stop worrying about them. WWII, the communist threat, nuclear overkill, peak oil, global warming are just some of them - and still, the globe kept turning and the long term trend for stocks kept pointing upwards ...

So I take it then that you are selling out as fast as you can, in multiple small sized lots..?

:)

[skid]

There was a number of posts preparing us for the next big crash (one from Sgt Pepper a bit up the page), but yes, the Rothschild report does as well talk a lot about problems to come (Chinese Banking, Brexit, American Elections, Middle East conflict and many many more). Sure - but again, whats new? The world has always had a large number of problems and conflicts and can't stop worrying about them. WWII, the communist threat, nuclear overkill, peak oil, global warming are just some of them - and still, the globe kept turning and the long term trend for stocks kept pointing upwards ...

This is kind of one of those things that i hope your right,but think you may be wrong-partly because I hav'nt heard a satisfactory explanation of how its going to come right,or even continue on,and plenty about how it can come unstuck.

[davflaws]

The second most used phrase in this site (after DYOR) is "This time is (or isn't) different.
So given that here will continue to be surges and corrections, is the long term trend still up? Or is this time different?

[skid]

The second most used phrase in this site (after DYOR) is "This time is (or isn't) different.
So given that here will continue to be surges and corrections, is the long term trend still up? Or is this time different?

Are you talking about the markets or the Feds interest rates,because those are 2 very different things....but seriously..many think that this trend you are speaking of is actually not an ''honest'' trend. Its a longish brew that is leading up to an inevitable fall of the dominoes--something that has been created (this fiscal policy) that is heading towards a very hard landing. QEs and low interest cannot carry on forever. They lose their punch,until they do nothing to help any more-then there is nothing left in the arsenal to help with the next catalyst that brings the market down. So according to many-''this time'' has been brewing for a long while.(doesnt mean some have not made alot of dosh though) But I guess we need to look at where to from here.

[moimoi]

QEs and low interest cannot carry on forever.

How do you know this?

[peat]

How do you know this?
it is presumably an assumption made on the basis that printing money will debase a currency and must eventually result in hyperinflation , and very low (negative) interest rates will destroy many important parts of the capitalist system eg the insurance industry

[Valuegrowth]

It is hard to predict anything. However we can have some estimation based on our own study. I don’t agree “that this time is different. There are cycles. For example, I believe NZD should begin its major down trend from 2017/18 onwards. For me major uptrend is intact for selected markets and stocks. In addition, there are undervalued markets and stocks.

Other thing is despite higher P/E ratio, there are investors and traders ready to pay premium for some American tech stocks. Their food stocks also have great demand.

DYOR

The second most used phrase in this site (after DYOR) is "This time is (or isn't) different.
So given that here will continue to be surges and corrections, is the long term trend still up? Or is this time different?

[moimoi]

it is presumably an assumption made on the basis that printing money will debase a currency and must eventually result in hyperinflation , and very low (negative) interest rates will destroy many important parts of the capitalist system eg the insurance industry

8 years in and no hyperinflation and according to the RBNZ numbers, no inflation to speak of...perhaps another 8 years?

[skid]

How do you know this?

That was a bit of an absolute statement was'nt it(should have put an (imo)---They can of course stay low,but from what Ive read the longer they stay SO low ,the greater the risk of a bubble from all that easy money and the damage that occurs when it breaks,which can happen for any number of reasons-(look at the share market and housing)-They were put low to encourage growth in the economy which unfortunately has not happened anywhere near what they had hoped. Theres been alot of speculation though (Russian roulette?)

[BlackPeter]

This is kind of one of those things that i hope your right,but think you may be wrong-partly because I hav'nt heard a satisfactory explanation of how its going to come right,or even continue on,and plenty about how it can come unstuck.

Not sure what you mean with "you hope I am right" ... I am just saying that while the actual threats might change (conflicts in different regions of the world, global warming replacing nuclear overkill ... and so on) the absolute "threat level" did not change. However - there used to be crashes before ... and there will be crashes in the future, and while I don't see any imminent threat - the next crash may or may not be around the corner.

Can we avoid it by listening to doomsday preachers - for sure not, but we would create some more (self full filling prophecies)

If & when it comes ...
is it likely to ruin some investors - probable;
is it likely to impact on most peoples wealth for some time? - for sure
will it be the end - definitely not!
will it end the long term uptrend ... I don't think so.

Interesting - even really bad events (like WWII) didn't hit the DOW too hard. Depending on what MA you use - the time from 1932 to 1965 was basically all bullish (of course with some corrections in between). Have a play with the chart:
http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

[BlackPeter]

So I take it then that you are selling out as fast as you can, in multiple small sized lots..?

:)

What makes you think that?

[BlackPeter]

Interesting reflections about Japan (economic stagnation for the last 2 decades) and the next economic crash in Chris Lee's "Taking Stock" released 22. September 2016:

https://www.chrislee.co.nz/taking-stock

[arc]

What makes you think that?


Just joking...a bit of dark humour...

I worked with a broking firm for a while, heard many people talking something up while they were actually making an orderly exit...

[bull....]

us election debates start next week so could provide direction or volatility going forward, anyway nasdaq new highs and others not to far behind targets still look on track at this stage

[littletramp]

Can I throw this out there and ask for comment or opinion. Are the Kiwisaver "fixed interest rate" managed funds tied to an index in some way to measure contributors account holding? Do these work like bonds where as interest rates/yields fall the bond value increases? If so, are there potentially going to be some very disappointed wage earners in the future, who have been advised or chosen to stick with a so called conservative saving plan, only to find that should interest rates start to rise in the future they experience a degree and possibly significant amount of capital value loss?

[Biscuit]

Can I throw this out there and ask for comment or opinion. Are the Kiwisaver "fixed interest rate" managed funds tied to an index in some way to measure contributors account holding? Do these work like bonds where as interest rates/yields fall the bond value increases? If so, are there potentially going to be some very disappointed wage earners in the future, who have been advised or chosen to stick with a so called conservative saving plan, only to find that should interest rates start to rise in the future they experience a degree and possibly significant amount of capital value loss?

I'd guess that "fixed interest rate" kiwisaver funds are primarily invested in company and Govt bonds, but only guessing, so their value will rise and fall with the value of the underlying bonds.

[BlackPeter]

Just joking...a bit of dark humour...

I worked with a broking firm for a while, heard many people talking something up while they were actually making an orderly exit...

Not my style ...

currently fully invested (after picking up some WHS this morning ...) but the cash reserve I always hold ...

[bull....]

Can I throw this out there and ask for comment or opinion. Are the Kiwisaver "fixed interest rate" managed funds tied to an index in some way to measure contributors account holding? Do these work like bonds where as interest rates/yields fall the bond value increases? If so, are there potentially going to be some very disappointed wage earners in the future, who have been advised or chosen to stick with a so called conservative saving plan, only to find that should interest rates start to rise in the future they experience a degree and possibly significant amount of capital value loss?

you make money from interest payments on these accounts so if they only invest in cash little risk of losing your money unless the bank goes bust which is not impossible under nz legislation as they will use your money in deposit to save the bank, if the fund has bonds they make capital gains as well as interest payments in a falling interest rate environment you lose value on your bonds in a rising rate environment but only if you sell if you hold to maturity you shouldn't lose capital and still get your interest payments. but you can still lose your capital if the fund has corporate bonds and the company goes bust.

anyway the point should be going ahead if we stay in a low rate environment get used to ultra low returns from these accounts

[moka]

Interesting - even really bad events (like WWII) didn't hit the DOW too hard. Depending on what MA you use - the time from 1932 to 1965 was basically all bullish (of course with some corrections in between). Have a play with the chart:
http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

Thanks for posting the link to the chart Black Peter. Very interesting.

[Hoop]

Europe Wall St wiped off half of the preceeding day's rally on Friday.
Hmmm...A "grey" Monday...methinks

[skid]

Europe Wall St wiped off half of the preceeding day's rally on Friday.
Hmmm...A "grey" Monday...methinks

They seemed to be really happy that the market was still positive for the week...maybe a little too happy--This (FED) was the best case scenario was'nt it?----as far as the real economy--not great housing and some other stats, incl manufacturing, in the USA--guess that will make investors happy if it keeps up(I mean down)...In terms of the FED

Correction---They are still doing a good job of manufacturing a fiscal economy:) If you include that--the stats would be up:)

[sb9]

Looks like the markets have given their verdict on the first debate to Clinton...dow futures added 100+ points since the close of debate.

[skid]

So atm the things to watch out for are a Trump victory or Fed raising interest rates

[Mush]

So atm the things to watch out for are a Trump victory or Fed raising interest rates

Also:
European banking sector (Deutsche, Monte Paschi etc)
Still a slow burn risk in China of Deval over time.

[NeverQuestion]

Interesting post today

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11716872

[Hoop]

An Encycopedia of what influences the sharemarket in one cartoon???

It's been recycled on ST and other Media over the years...It's still my favourite gem

http://cdn.shopify.com/s/files/1/0060/6102/products/book_buy_sell_sell_new_1024x1024.jpg?v=1291137799

[skid]

Also:
European banking sector (Deutsche, Monte Paschi etc)
Still a slow burn risk in China of Deval over time.

You were right to add that---Huge banks in trouble are scary--No one is exempt from collateral damage these days but any opinions on how else we would be affected-or insulated?

[Mush]

You were right to add that---Huge banks in trouble are scary--No one is exempt from collateral damage these days but any opinions on how else we would be affected-or insulated?

Well skid, all I can do is refer you to this graph that the IMF produced about the most systemic bank Globally.

8336

If DB or any of its counter-parties encounter difficulties or bankruptcy, there would be widespread contagion. Even more so than what occurred in 08'

Reports out from Bloomberg yesterday stating that some Hedgies have reduced excess collateral with DB, which signals reduced confidence. SP decline triggered a selloff in Euro/US financial stocks which brought most indicies down with it. Gold and Bonds were bid due to the risk off flight to safety/quality.

Might be time to start increasing the cash holdings (not with Deutsche).

[skid]

Well skid, all I can do is refer you to this graph that the IMF produced about the most systemic bank Globally.

8336

If DB or any of its counter-parties encounter difficulties or bankruptcy, there would be widespread contagion. Even more so than what occurred in 08'

Reports out from Bloomberg yesterday stating that some Hedgies have reduced excess collateral with DB, which signals reduced confidence. SP decline triggered a selloff in Euro/US financial stocks which brought most indicies down with it. Gold and Bonds were bid due to the risk off flight to safety/quality.

Might be time to start increasing the cash holdings (not with Deutsche).

Yep,we have a few safeguards here and in OZ ,but of course they would ,at best delay the carnage here until we had a chance to pull out cash for Gold,Kiwi bonds etc.

Im not sure its possible to just pull out cash--probably has to be traded for another asset.--(just a plan in case of worst case scenario)

[skid]

People have asked a number of times ''whats wrong with low interest rates'' One ,perhaps oversimplified answer, is that all that easy money just encourages large firms to make speculative (sometime high risk)investments with that easy money thus creating a bubble or simply having a situation where it blows up in their faces (or both)---Is this what we are seeing unfold with Duetsche Bank? We dont know yet ,but if bubbles are forming,we may just see it happen from somewhere else ,the next weak link. All of Europe is entwined in the affairs of this mega bank.--theres already a run in the form of hedge funds being pulled out.
Big banks have always been the area of most concern to me

[Mush]

People have asked a number of times ''whats wrong with low interest rates'' One ,perhaps oversimplified answer, is that all that easy money just encourages large firms to make speculative (sometime high risk)investments with that easy money thus creating a bubble or simply having a situation where it blows up in their faces (or both)---Is this what we are seeing unfold with Duetsche Bank? We dont know yet ,but if bubbles are forming,we may just see it happen from somewhere else ,the next weak link. All of Europe is entwined in the affairs of this mega bank.--theres already a run in the form of hedge funds being pulled out.
Big banks have always been the area of most concern to me

Deutsche's problem comes from the fact that there core business is one of trading (derivatives house) and investment banking units, which have been regulated to hell post 08, which means they're significantly less profitable than what they once were. And yes, negative/low global rates have hurt most financial institutions by squeezing net interest margins (making them less profitable), which means even though it's costly in terms of capital to return to trading activities, firms have been willing to sacrifice capital in order to find some profitability (I.e Assume greater risk).

I think it's quite apparent that most asset classes are either approaching or in bubble territory. Negative earnings growth for US stocks, yet S&P trades near all time highs? To me that's not a function of a market trading on fundamentals. And there are many other equity markets around the world that mirror this.

Central bank policy since 08 has been aimed to inflate asset prices (wealth effect to cause consumption, stimulate AD) which hasn't had the effect that was intended. Now they're stuck between a rock and hard place, where they cannot normalize policy as markets are addicted (so to speak) to all the easy money flushing around in the system. So IMO most markets are bubbly in today's environment, now that's not to say you can't make money off them, I'd be adjusting my time horizon for shorter term plays.

[Mush]

Yep,we have a few safeguards here and in OZ ,but of course they would ,at best delay the carnage here until we had a chance to pull out cash for Gold,Kiwi bonds etc.

Im not sure its possible to just pull out cash--probably has to be traded for another asset.--(just a plan in case of worst case scenario)

NZ/Australia were relatively unaffected by the GFC due to our main exposures being China and each other. Our banks were not significantly exposed to either the states or Europe. However this time around, i'm struggling to find anywhere else in the world that doesn't seem to have significant risks to the downside. (IMO Australia, NZ and the US are about the only places)

And unfortunately for us, this time around the Pillars (ANZ/NAB/CBA/WPC) have significant exposures to China, so I'm not convinced that if everything were to go "tits up" we would be as sheltered as previous cycles.

[Baa_Baa]

"Which ultimately means that DB really has four options: raise capital ... approach the ECB for a liquidity bridge ... appeal for a state bailout ...or implement a bail-in ... " [abridged]

http://www.zerohedge.com/news/2016-09-29/how-much-liquidity-deutsche-bank-has-moment-and-what-happens-next

[Hoop]

NZ/Australia were relatively unaffected by the GFC due to our main exposures being China and each other. Our banks were not significantly exposed to either the states or Europe. However this time around, i'm struggling to find anywhere else in the world that doesn't seem to have significant risks to the downside. (IMO Australia, NZ and the US are about the only places)

And unfortunately for us, this time around the Pillars (ANZ/NAB/CBA/WPC) have significant exposures to China, so I'm not convinced that if everything were to go "tits up" we would be as sheltered as previous cycles.
you forget to mention the big banking risks from the global big cities housing bubbles...Sydney Auckland are big bubbles waiting for a catalyst (pin)

[NeverQuestion]

you forget to mention the big banking risks from the global big cities housing bubbles...Sydney Auckland are big bubbles waiting for a catalyst (pin)

The Other thing you have forgotten is that New Zealanders are not huge on saving

As a result the local banks have to go overseas to secure the funds for things like mortgages

Watch this space if things turn ugly in the global economy or the NZD suffers a downturn

[NeverQuestion]

Given the 2008 and 1987 Market Crash happened around this time of year does anyone go defensive on their investments around this month? :scared:

[skid]

Im defensive ,but not because of the month--more because of the fiscal era we are in. But going defensive often means sacrificing profit as there is more profit in risk,as long as it goes well.
Those who absolutely need that profit as income (like retired folk) face much more of a dilemma --they need that income and are being forced to take risks to get it.

[skid]

Meanwhile the American system seems to be breaking new ground in terms of hippocracy--(fining DB for mortgage security issues)while bailing out its own banks in the GFC

[winner69]

Meanwhile the American system seems to be breaking new ground in terms of hippocracy--(fining DB for mortgage security issues)while bailing out its own banks in the GFC

And not one banker been sent to jail?

[Xerof]

And not one banker been sent to jail? But they are foregoing the annual $41m bonus .....jeez it must be tough on them

[Valuegrowth]

There are risks and returns in any type of business. It is same for banks. Those who have some kind of plan for those types of risks will survive and will continue their business.

There are things which come to my mind.

How much exposure they have for derivatives (this include swaps as well)
Are they over exposure to some currencies?
Are they over exposure to gold?
Do they have some bad investments?
Are they over exposure to certain type of areas such as property or other assets?

Which bank can name as the best managed bank in New Zealand and why?

I prefer to deal with best managed banks globally. They are safe and they will have more market share in the coming decade. I like to avoid banks which are exposure to high risk areas.

In the mid and long run best managed banks will have more market share and they will outperform all other weak banks. We may see some bankruptcies as well in the coming two decades unless banking industry fix their financial system once and for all.

Some say real crisis is bank bonds not banks.

All these types of situation create great opportunities for some and misfortunes for some depend on the positions taken by banks, other financial institutions, investor or traders. For example Volatility in bonds, currencies and bank stocks all create opportunities as well as misfortunes.

There could be so many crisis but they are creating some great opportunities as well. In the modern financial world everybody cannot win at the same time at same pace.

We should see some volatility in October as well. However we should see more upside toward second half of October.I believe some will have Santa Claus Rally as well.

[Valuegrowth]

http://www.bloomberg.com/news/articles/2016-09-30/deutsche-bank-rebounds-as-cryan-moves-to-shore-up-confidence

[stoploss]

And not one banker been sent to jail?


http://money.cnn.com/2016/04/28/news/companies/bankers-prison/

[GTM 3442]

Not one banker went to jail? Not true, but, from the CNN article stoploss quotes-

"Many of the crimes involved relatively small amounts of money at smaller banks, rather than massive fraud at Wall Street banks."

Too big to fail = too big to jail

[skid]

Not one banker went to jail? Not true, but, from the CNN article stoploss quotes-

"Many of the crimes involved relatively small amounts of money at smaller banks, rather than massive fraud at Wall Street banks."

Too big to fail = too big to jail

and those that did go are brushing up on their golf game

[NeverQuestion]

and those that did go are brushing up on their golf game

Your more right than you realise!

Found this interesting article a few weeks back. These guys are known, just never taken to trial:

Massachusetts Senator Elizabeth Warren is marking the eighth anniversary of Lehman Brothers’ bankruptcy with a new push to investigate—and potentially jail—more than two dozen individuals and corporations who were referred to the Justice Department for possible criminal prosecution in 2011 by the Financial Crisis Inquiry Commission, a government-appointed group that investigated the roots of the 2008 financial crisis. None was ever prosecuted. The names of the referrals—including former Treasury Secretary Robert E. Rubin

http://www.bloomberg.com/politics/articles/2016-09-15/elizabeth-warren

[janner]

Crime Documentary Inside Job..

Worth a look..

[fish]

Crime Documentary Inside Job..

Worth a look..

Definitely.
However it is history.The scary thing is that it probably will be repeating itself unless people are called to account

[janner]

Definitely.

However it is history.The scary thing is that it probably will be repeating itself unless people are called to account

With so many of the same cabal still in positions of influence..

I fear that if Hillary gets in.. History will be repeating itself..

[BlackPeter]

With so many of the same cabal still in positions of influence..

I fear that if Hillary gets in.. History will be repeating itself..

I think you mixed up the candidates ... Trump (remember - the candidate with with the large male reproductive organ: http://edition.cnn.com/2016/03/03/politics/donald-trump-small-hands-marco-rubio/) wants to make the rich (including himself) richer and has (but further reducing taxes and building a wall) no policies against another economical meltdown.

Actually - Hillary has a plan how to control the speculation on wall-street ... and it does not look too bad - check it out yourself:
https://www.hillaryclinton.com/issues/wall-street/

[janner]

I think you mixed up the candidates ... Trump (remember - the candidate with with the large male reproductive organ: http://edition.cnn.com/2016/03/03/politics/donald-trump-small-hands-marco-rubio/) wants to make the rich (including himself) richer and has (but further reducing taxes and building a wall) no policies against another economical meltdown.

Actually - Hillary has a plan how to control the speculation on wall-street ... and it does not look too bad - check it out yourself:
https://www.hillaryclinton.com/issues/wall-street/


I am not talking " Candidates "..

[janner]

BP. This is what I said.

" With so many of the same cabal still in positions of influence.. "..

Please take the time to see " Inside job ".. It is on Youtube.

The beginning is very scrappy in my opinion..

However.. Matt Damons commentary is excellent IMHO..

Those people are still pulling strings..

[BlackPeter]

BP. This is what I said.

" With so many of the same cabal still in positions of influence.. "..

Please take the time to see " Inside job ".. It is on Youtube.

The beginning is very scrappy in my opinion..

However.. Matt Damons commentary is excellent IMHO..

Those people are still pulling strings..

Hi janner, I know the movie, and yes - it is revolting and depressing.

You said "I fear that if Hillary gets in.. History will be repeating itself..".

I think you are wrong.

Of the two candidates who might get the job is she the only alternative who has at least a plan how to avoid the repetition of the GFC .... including the intention to remove (and if possible punish) the people who caused the last one.

[Bobdn]

Well, at least we'll be avoiding another Black Monday this Monday. Truthfully, i wish there was some sort of correction, maybe a drop of 20 to 30% over the next few months. Let's get this show on the road.

It's no fun drip feeding into index funds when everything is so high.

[janner]

Well, at least we'll be avoiding another Black Monday this Monday. Truthfully, i wish there was some sort of correction, maybe a drop of 20 to 30% over the next few months. Let's get this show on the road.

It's no fun drip feeding into index funds when everything is so high.

Agree whole heartedly with you ..

It Ain't going to happen IMHO..

[winner69]

BP. This is what I said.

" With so many of the same cabal still in positions of influence.. "..

Please take the time to see " Inside job ".. It is on Youtube.

The beginning is very scrappy in my opinion..

However.. Matt Damons commentary is excellent IMHO..

Those people are still pulling strings..

.......and don't forget that the likes of Singer, Kochs et al usually get their way (influence outcomes) .....and possibly whoever comes president it doesn't really come into it

[janner]

Hi janner, I know the movie, and yes - it is revolting and depressing.

You said "I fear that if Hillary gets in.. History will be repeating itself..".

I think you are wrong.

Of the two candidates who might get the job is she the only alternative who has at least a plan how to avoid the repetition of the GFC .... including the intention to remove (and if possible punish) the people who caused the last one.


BP. It is not a movie.. :-)) It is documented truth.. With the " actors " spluttering and refusing to speak..

Exactly like so many of Hillary's contacts are doing today.. Pleading the Fifth...

They want the Constitution when needed, but do not follow it when passing laws..



"

[janner]

.......and don't forget that the likes of Singer, Kpchs et al usually get their way (influence outcomes) .....and possibly whoever comes president it doesn't really come into it

Absolutely correct..

[skid]

BP. It is not a movie.. :-)) It is documented truth.. With the " actors " spluttering and refusing to speak..

Exactly like so many of Hillary's contacts are doing today.. Pleading the Fifth...

They want the Constitution when needed, but do not follow it when passing laws..



"

So ...could you enlighten us on How Donald Trump is going to remedy all that

[BlackPeter]

BP. It is not a movie.. :-)) It is documented truth.. With the " actors " spluttering and refusing to speak..

Exactly like so many of Hillary's contacts are doing today.. Pleading the Fifth...

They want the Constitution when needed, but do not follow it when passing laws..



"

Hmm - do they speak Russian or Ukrainian in Dnepropetrovsk?

Anyway ... the word "movie" does not imply that the story told is fictional ...

But yes - I understand that Trump has lots of one-eyed Russian supporters ... he loves Putin as well :p!

[janner]

Hmm - do they speak Russian or Ukrainian in Dnepropetrovsk?

Basically the same language.. Like southern and northern English..:-)

[janner]

So ...could you enlighten us on How Donald Trump is going to remedy all that

Unable to shed light on that.

Just the lesser of two evils.. What other choice is there

[skid]

Unable to shed light on that.

Just the lesser of two evils.. What other choice is there

The way I see it the choice(yes,lesser of 2 evils) is roughly the status quo or someone who ,there is a good chance,is not capable of the job,when you think of how complicated being the top dog for the worlds only empire must be. Maybe another way to look at it is in terms of job applicants.Normally you would have to convince the employer you have the experience to handle the job. I personally dont think Trump would even make it in the door ,let alone make it to the short list.
This is one of those bizarre situations where a bunch of totally inexperienced (alot uneducated) are making the decision on that(voters)
As the saying goes ''Democracy without education ..is Hippocracy without limitations.''

[Blue Horseshoe]

How much experience did Ronald Reagan have for the job.?

[lawson]

How much experience did Ronald Reagan have for the job.?

Well Bonzo and Nancy did all the heavy lifting so it doesn't really matter :)

[Baa_Baa]

There is a US Presidential Race thread here http://www.sharetrader.co.nz/showthread.php?10527-US-Presidential-Race

How about Douche Bank, now there's a calamity in the making. Something like $46 trillion derivatives exposure! Trying to negotiate down a $14 billion penalty. Too big to fail?

[janner]

How much experience did Ronald Reagan have for the job.?

So very true...

Maybe Trump will surprise every one and step up to the job..

[Mush]

There is a US Presidential Race thread here http://www.sharetrader.co.nz/showthread.php?10527-US-Presidential-Race

How about Douche Bank, now there's a calamity in the making. Something like $46 trillion derivatives exposure! Trying to negotiate down a $14 billion penalty. Too big to fail?

Their business model is fundamentally flawed. However they are still solvent and have over $200B in liquidity reserves if needed.
To me, the main Issues are:
- Contagion risk
- More clients pulling excess capital (essentially a bank run)
- Inability to pay coupons on their CoCo bonds, or even triggering the bonds themselves.
- Need to raise more capital to meet capital requirements? Becoming more expensive to do that through equity raising.
- DOJ settlement is a lot more than the market is expecting
- A bail out/bail in decision becomes political, election next year in Germany so Merkel is not willing to make tough decisions, could be disastrous in the event of DB needing help (ECB, Germany, WB)

[skid]

So very true...

Maybe Trump will surprise every one and step up to the job..

Thats a bit of a dangerous premise about someone who obviously shoots from the hip.

Meanwhile ..good points Mush.
There is already alot of movement away from DB from Hedge funds.
I believe they will eventually negotiate a much smaller fine (otherwise those doing the fining should have their heads examined for not seeing the bigger picture)..but its not a good look...or perhaps I should say it is a good look (behind the curtain)..assuming you have seen the wizard of Oz.

[BlackPeter]

Agree with the "not a good look" re Deutsche Bank, though not a lot of news - just warmed up stuff. The fact that the SP recovered with the rumours that the fine might be smaller indicates as well that the bank is not lost - yet.

So far it looks like they have plenty of reserves and sufficient equity, but sure - these things can change if the bank stays under attack.

However - reading as well some German papers - nobody expects for the bank to falter. A state bailout would be obviously not a good look for the bank, and I am very sure that, if it comes, it would be very very expensive for DBK share holders as well as DBK management, and so it should be. However I don't believe for a second that the German government would allow the Deutsche Bank to crash - certainly not after the lessons learned with Lehman brothers and the GFC.

If we look however for the next reason for the world to stop spinning, than I think we need to look somewhere else ...

[Hoop]

http://www.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=DB&uf=7168&type=64&size=3&sid=180934&style=1013&freq=1&time=10&rand=1154707658&ma=1&maval=50&lf=1&lf2=4&lf3=8&height=820&width=720&mocktick=1

[skid]

Agree with the "not a good look" re Deutsche Bank, though not a lot of news - just warmed up stuff. The fact that the SP recovered with the rumours that the fine might be smaller indicates as well that the bank is not lost - yet.

So far it looks like they have plenty of reserves and sufficient equity, but sure - these things can change if the bank stays under attack.

However - reading as well some German papers - nobody expects for the bank to falter. A state bailout would be obviously not a good look for the bank, and I am very sure that, if it comes, it would be very very expensive for DBK share holders as well as DBK management, and so it should be. However I don't believe for a second that the German government would allow the Deutsche Bank to crash - certainly not after the lessons learned with Lehman brothers and the GFC.

If we look however for the next reason for the world to stop spinning, than I think we need to look somewhere else ...

Yes,all these scares come along and so far have not done game changer type damage. I guess there are a number of ways we can view this--Its just ''move along folks nothin to see here'' or its a bunch of things are are brewing,all contributing in their own way to the real game changer. and who knows what kind of game changer it would be (correction-severe correction--crash) It will always be the former ,until the latter though,I suppose.

[Mush]

Yes,all these scares come along and so far have not done game changer type damage. I guess there are a number of ways we can view this--Its just ''move along folks nothin to see here'' or its a bunch of things are are brewing,all contributing in their own way to the real game changer. and who knows what kind of game changer it would be (correction-severe correction--crash) It will always be the former ,until the latter though,I suppose.

Tend to agree. I think the risks to the global economic outlook are skewed much to the downside.

It's been one of the longest recovery's in History (if you can call it that). Europe has not recovered (GDP wise) since the GFC even though having exceptional policy easing (NIRP). The states, only just recovering now, even with ZIRP. Japan, well, still Japan, negative rates, buying corporate debt/EFTs etc.

The un-intended consequences of having monetary policy at extremely low levels for an extended period of time will only have caused excessive risk taking (aka, Deutsche and their huge derivatives book, $18T of which are classified as Tier 3 assets, which have $0 book value as cannot be priced/valued).
Just a matter of trying to find out where theses cracks might become apparent.

[Leftfield]

A fall in gold prices could indicate all is well and that the world is not going to end..... yet.

http://www.bloomberg.com/news/articles/2016-10-04/gold-drops-below-1-300-an-ounce-to-lowest-since-brexit-vote

[JBmurc]

So very true...

Maybe Trump will surprise every one and step up to the job..

Or GW Bush ... bankrupted the oil company he was involved with..... not the smartest cookie

[Blue Horseshoe]

A fall in gold prices could indicate all is well and that the world is not going to end..... yet.

http://www.bloomberg.com/news/articles/2016-10-04/gold-drops-below-1-300-an-ounce-to-lowest-since-brexit-vote

That's what they want you to think - Central bank manipulation !. Got to to keep the ponzi scheme going.

[Mush]

8342

Above shows the NZD/USD (yellow) and NZX50 (purple).

Interesting to note the action in recent days:

- FX market waking up to the scenario of an RBNZ cut and a FED hike in December, caused a 100point decline in the NZD yesterday (helped by a weak dairy auction), and seemingly a change in sentiment.
- Approaching some key levels in the NZD which could potentially cause a move down to around 0.6930 (dependent on non-farm payrolls number this Friday)

This bodes the question, "Where does the NZX head?"

In my opinion, foreign flows are what is driving the market and any potential decline in the kiwi causes a similar move in the index.

Could potentially have a bit of a Black Monday scenario next week if we get some significant Dollar strength due to a big non-farm payrolls figure (which increases the market pricing of a FED hike in December). Given the recent string of strong ISM data that has come out of the states, this is looking increasingly likely.

Regards,
Mush

[bull....]

rate hike expectations in US causing selling in NZ share market and hence lower NZD as funds are repositioned into other markets would imagine it has a little lower to go all healthy though

[Lewylewylewy]

Agreed, it's worth remembering that businesses are performing well! Just means that your previous purchases where higher than they should have been or you missed out on sell opportunities.

I'm done guessing where things are going for the moment, so I'm keeping my holdings and hoping to top up on downs.

[bull....]

Agreed, it's worth remembering that businesses are performing well! Just means that your previous purchases where higher than they should have been or you missed out on sell opportunities.

I'm done guessing where things are going for the moment, so I'm keeping my holdings and hoping to top up on downs.

lower prices mean good buying in good companies and the div yield only gets better as long as the company can maintain the div

[skid]

lower prices mean good buying in good companies and the div yield only gets better as long as the company can maintain the div

And the div. payout does not erode the SP---The company should hopefully be in an uptrend (the stronger ,the better) There are whole articles on the strategy of buying for the dividends. ..No1(by far) Good Company No2-dividends....IMO

[Lewylewylewy]

If:

- Dividend paying stocks are valued based on their dividend return and speculated dividend return
- The valuation put on stocks by the market is correct, and valuations are based on current market rate and speculated performance (which I don't always agree with)
- The highest return on dividend stocks is from growth (which I agree with in most scenarios)

Then the best stocks to buy for dividend return should always be the stocks that pay the smallest (but not zero) dividend.

Based on this (and weeding out all the stocks I personally wouldn't invest in), this means that CVT, FPH, RYM MPG, DGL, MFT and AIA are some of the best stocks out there for dividend return :p

(I don't personally advocate or even necessarily agree with this, just a point of discussion / idea)

[Mush]

lower prices mean good buying in good companies and the div yield only gets better as long as the company can maintain the div

Div yielder's = bond proxies nowadays. Moves correlated to bond prices/interest rates, globally if there is a taper tantrum (rumors of ECB reducing QE) these will get sold off heavily.

Definitely creates good buying opportunities!

http://www.telegraph.co.uk/investing/shares/fixed-income-no-growth-shares-are-the-new-bonds/

[Hoop]

.............
- Approaching some key levels in the NZD which could potentially cause a move down to around 0.6930 (dependent on non-farm payrolls number this Friday)

This bodes the question, "Where does the NZX head?"

In my opinion, foreign flows are what is driving the market and any potential decline in the kiwi causes a similar move in the index.

Could potentially have a bit of a Black Monday scenario next week if we get some significant Dollar strength due to a big non-farm payrolls figure (which increases the market pricing of a FED hike in December). Given the recent string of strong ISM data that has come out of the states, this is looking increasingly likely.

Regards,
Mush

Your above opinion same as mine...

To add...
Bull Markets rely on abundant supply of "available " money to create and maintain demand..Any flight of money out of NZ not only lowers the NZ$ but can have a negative effect on NZ Equities...(and property)
Looking for the rainbow due to lower NZ$ does not always happen..Those lower $ wishful people play a risk game..Negative Investor sentiments is a major factor in bear market cycles..The NZ Equities are overvalued so "any excuse may do" to change that Sentiment..so the better business/lower NZ$ rainbow could evapourate as demand evapourates..and a much overdue correction takes hold and if a serious correction occurs it could be fundamentally damaging and self-fulfiling..

also Market physics are in play...
A correcting NZ$ is seeing market adjustments as the swaps rates are increasing which will take pressure of the NZRB to lower OCR i..if the NZ$ has a significant fall there may be a need to increase OCR...

The Equity Markets and Property markets are presently operating at maximum efficiency,,,walking a tightrope....sweet spot...endgame... call it what you like ...There are many factors operating to cause this present day maximum capital asset value, the main one the media is pumping is the low interest rate variable....

Sweet spots (endgames) don't last forever..from past history End games end badly due to majority of the public demanding increased regualory intervention...(demand the use of a wrecking ball ) or Central banks ending the round of cheap and sometimes free use of money.................There will be a time when............

[skid]

And if/when that comes, you will hear far less statements to the effect of..... ''definitely creates good buying opportunities''

[Hoop]

And if/when that comes, you will hear far less statements to the effect of..... ''definitely creates good buying opportunities''
True..........:D

[Baa_Baa]

Re Douche Bank, here's an interesting and well reasoned take on the situation from Aswath Damodaran blog 'Musings on Markets' ... http://aswathdamodaran.blogspot.co.nz/2016/10/deutsche-bank-greek-tragedy-at-german.html

"At the current stock price of $13.33 (at close of trading on October 4), the stock looks undervalued by about 36%, given my estimated value, and I did but [sic .. buy?] the stock at the start of trading yesterday."


Their business model is fundamentally flawed. However they are still solvent and have over $200B in liquidity reserves if needed.
To me, the main Issues are:
- Contagion risk
- More clients pulling excess capital (essentially a bank run)
- Inability to pay coupons on their CoCo bonds, or even triggering the bonds themselves.
- Need to raise more capital to meet capital requirements? Becoming more expensive to do that through equity raising.
- DOJ settlement is a lot more than the market is expecting
- A bail out/bail in decision becomes political, election next year in Germany so Merkel is not willing to make tough decisions, could be disastrous in the event of DB needing help (ECB, Germany, WB)

[BlackPeter]

Re Douche Bank, here's an interesting and well reasoned take on the situation from Aswath Damodaran blog 'Musings on Markets' ... http://aswathdamodaran.blogspot.co.nz/2016/10/deutsche-bank-greek-tragedy-at-german.html

"At the current stock price of $13.33 (at close of trading on October 4), the stock looks undervalued by about 36%, given my estimated value, and I did but [sic .. buy?] the stock at the start of trading yesterday."

No matter whether we agree with the individual parameters, this is an outstanding analysis! Thanks for sharing.

Confirms as well my view that Deutsche Bank is currently undervalued ... need to work on finding a simple and cost effective way to buy European shares!

BTW ... it is Deutsche Bank ...

[Valuegrowth]

Sell-off or different types of panic create great opportunities for those who have very good knowledge about industries and companies that they follow. In other words they create great opportunities for intelligent investors. Currently some opportunities are creating worldwide.

No matter whether we agree with the individual parameters, this is an outstanding analysis! Thanks for sharing.

Confirms as well my view that Deutsche Bank is currently undervalued ... need to work on finding a simple and cost effective way to buy European shares!

BTW ... it is Deutsche Bank ...

[Mush]

Seeing some divergence in the NZD and NZX today. Kiwi is testing the 71c barrier to the downside and NZX up 0.4%.

US markets open after a long weekend tomorrow which should be interesting.

[NeverQuestion]

Decided to go 100% NZ Cash Fund for my KiwiSaver so ready for the crash :cool:

[BlackPeter]

Decided to go 100% NZ Cash Fund for my KiwiSaver so ready for the crash :cool:

What crash? Anything we missed?

[NeverQuestion]

What crash? Anything we missed?

Nope, just being paranoid of the Month :)

(Black Monday refers to Monday, October 19, 1987)

Here are a few others in October :

Panic of 1907 (https://en.wikipedia.org/wiki/Panic_of_1907) Oct 1907

Wall Street Crash of 1929 (https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929) 24 Oct 1929

Friday the 13th mini-crash (https://en.wikipedia.org/wiki/Friday_the_13th_mini-crash) 13 Oct 1989

October 27, 1997, mini-crash (https://en.wikipedia.org/wiki/October_27,_1997,_mini-crash) 27 Oct 1997

Stock market downturn of 2002 (https://en.wikipedia.org/wiki/Stock_market_downturn_of_2002) 9 Oct 2002

https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets

[fungus pudding]

Nope, just being paranoid of the Month :)

(Black Monday refers to Monday, October 19, 1987)

Here are a few others in October :

Panic of 1907 (https://en.wikipedia.org/wiki/Panic_of_1907) Oct 1907

Wall Street Crash of 1929 (https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929) 24 Oct 1929

Friday the 13th mini-crash (https://en.wikipedia.org/wiki/Friday_the_13th_mini-crash) 13 Oct 1989

October 27, 1997, mini-crash (https://en.wikipedia.org/wiki/October_27,_1997,_mini-crash) 27 Oct 1997

Stock market downturn of 2002 (https://en.wikipedia.org/wiki/Stock_market_downturn_of_2002) 9 Oct 2002

https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets

But the real ripper was October 1987.

[winner69]

Seeing some divergence in the NZD and NZX today. Kiwi is testing the 71c barrier to the downside and NZX up 0.4%.

US markets open after a long weekend tomorrow which should be interesting.

Obviously they didn't have a good long weekend and took it out on the markets

[Mush]

Obviously they didn't have a good long weekend and took it out on the markets

The wives must have spent too much on the credit cards in the Columbus Day sales, forcing some re-positioning

[arc]

A lot of nervousness in the American market at the moment.

[Leftfield]

A lot of nervousness in the American market at the moment.

Take a look at the UK too!! Sterling struggling.

[Hoop]

A lot of nervousness in the American market at the moment.

Hmmm..its been worse a few times this year..

The VIX is nicknamed the Fear Index

The spike in the VIX during mid Sept is the increased volatility we are experiencing at the moment in the S&P 500 index..

It seems the VIX is trending up again so this Wall St volatility is here for a while yet...This month long daily volatilty seems worse now because of 2 things-- 1...it's been an everyday happening and 2.. there was a long period (2 months) of unusually low daily volatility (calm) during their mid late summer.

The VIX below 20 is considered calm..and over 30 is fear or uncertainty (http://www.investopedia.com/terms/v/vix.asp)
As you see on the chart below the VIX is a volatile index with steep reactions...Therefore when the VIX is trending up we can't dismiss that a sharp rise is imminent..

http://i458.photobucket.com/albums/qq306/Hoop_1/vix%2011102016.png (http://s458.photobucket.com/user/Hoop_1/media/vix%2011102016.png.html)

[arc]

Downhill to Christmas

[Baa_Baa]

From the once proud national publication, now prone to sensationalist headlines quoting who?

"Market crash warning: Red alert issued"

"With the US stock market selling off aggressively on October 11, we now issue a RED ALERT," Gunn wrote, according to Bloomberg.

"Gunn is warning of dire consequences should the Dow - which closed at 18,098.94 this morning (NZ time) - fall below 17,992."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11728936

Well ...
8357

[vin]

Sounds like Gunn is trying to create something that doesn't exist?

[Mush]

Sounds like Gunn is trying to create something that doesn't exist?

Or he got his charting wrong and the level is actually 17,960

[Hoop]

From the once proud national publication, now prone to sensationalist headlines quoting who?

"Market crash warning: Red alert issued"

"With the US stock market selling off aggressively on October 11, we now issue a RED ALERT," Gunn wrote, according to Bloomberg.

"Gunn is warning of dire consequences should the Dow - which closed at 18,098.94 this morning (NZ time) - fall below 17,992."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11728936

Well ...
8357

Nice one BaaBaa:)

[see weed]

From the once proud national publication, now prone to sensationalist headlines quoting who?

"Market crash warning: Red alert issued"

"With the US stock market selling off aggressively on October 11, we now issue a RED ALERT," Gunn wrote, according to Bloomberg.

"Gunn is warning of dire consequences should the Dow - which closed at 18,098.94 this morning (NZ time) - fall below 17,992."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11728936

Well ...
8357
Sell all your shares, take all your money out of the bank....(money in bank not safe either). Buy gold and silver. Dig a hole in your back yard and bury all your gold, silver and cash. When it is all over you dig it up and reinvest, so I was told by a friend of a friend of my brothers friend. The crash will happen in 6 weeks time? Is that the USA election time?

[blackcap]

Sell all your shares, take all your money out of the bank....(money in bank not safe either). Buy gold and silver. Dig a hole in your back yard and bury all your gold, silver and cash.

I was thinking the same thing. But the hole in the back yard does pose some risks... ie if someone sees you digging.... etc. What about a fire proof safe bolted into some structure in your home? Or are there risks with this approach as well?

[fungus pudding]

I was thinking the same thing. But the hole in the back yard does pose some risks... ie if someone sees you digging.... etc. What about a fire proof safe bolted into some structure in your home? Or are there risks with this approach as well?

Very high risk. Someone might steal your house while you're not looking.

[Leftfield]

You read it hear first folks......"I predict Black Monday will take place the first Monday following Donald Trump's election."

[BlackPeter]

You read it hear first folks......"I predict Black Monday will take place the first Monday following Donald Trump's election."

... is this the same year when Easter Sunday and Boxing Day fall on Waitangi Day?

I could well imagine some street fighting after Hillary's landslide victory. Trump is a vicious bully with the intention to leave only scorched earth after his demise - and so are the crowds supporting him. No respect for democracy. Not sure, though this will have a lasting impact on the share markets. I think a relieve rally on Wednesday (Nov 9th) - well, Thursday, November 10th at our place is more likely to happen ...

[fungus pudding]

... is this the same year when Easter Sunday and Boxing Day fall on Waitangi Day?

I could well imagine some street fighting after Hillary's landslide victory. Trump is a vicious bully with the intention to leave only scorched earth after his demise - and so are the crowds supporting him. No respect for democracy. Not sure, though this will have a lasting impact on the share markets. I think a relieve rally on Wednesday (Nov 9th) - well, Thursday, November 10th at our place is more likely to happen ...

You can bet your bottom dollar Hilary will win cos the election is rigged. Trump says so. So there.

[winner69]

You read it hear first folks......"I predict Black Monday will take place the first Monday following Donald Trump's election."

Wont be much of a fall - after a Black Wednesday and Thursday and Friday

[BlackPeter]

Interesting Monday, yesterday - and today might be just a repeat of that. International markets over night (but the Nikkei) kept dropping.

With the NZD dropping as well against all major currencies it is probably a fair assumption that foreign money is pulled out of NZ - which means that the NZX rebound (which is certain to come at some stage) will get less of a boost.

Overall - there might be some buying opportunities later this week (or next week?), though I assume that volatility will reign at least until the outcome of the US elections is known. God help us all if it is Trump.

Keep safe out there ...

Discl: still holding a lot of shares, but more cash than usual (approaching 20%) ...

[skid]

You read it hear first folks......"I predict Black Monday will take place the first Monday following Donald Trump's election."

Well....that did come out of left Field......I agree with PART of your prediction...If Trump wins(now 11.6% chance) there will be a very black Monday

Its certainly looking like there will be trouble when(88.4%)Trump loses--Narcissists do not take defeat nicely

Ive got a friend over there that is showing all the signs of being in a cult--seriously

GOLD--Ive heard gold bars make good doorstops........ seriously though--sometimes the best way to lose something is to try to hard to hide it----when is the last time you saw someone rifling through all that junk thats been under your garage for the last 10yrs

[arc]

Interesting Monday, yesterday - and today might be just a repeat of that. International markets over night (but the Nikkei) kept dropping.

With the NZD dropping as well against all major currencies it is probably a fair assumption that foreign money is pulled out of NZ - which means that the NZX rebound (which is certain to come at some stage) will get less of a boost.

Overall - there might be some buying opportunities later this week (or next week?), though I assume that volatility will reign at least until the outcome of the US elections is known. God help us all if it is Trump.

Keep safe out there ...

Discl: still holding a lot of shares, but more cash than usual (approaching 20%) ...


Personally Im beginning to think it wont matter who wins the election, the markets are reacting to global situations (The US situation represents a speed bump but its only one of a number of factors to model into the picture) . I think the present decline may continue through Christmas.

[blackcap]

Well....that did come out of left Field......I agree with PART of your prediction...If Trump wins(now 11.6% chance) there will be a very black Monday

Its certainly looking like there will be trouble when(88.4%)Trump loses--Narcissists do not take defeat nicely

s

The bookies give Clinton a 82% chance of winning and Trump a 15.6% chance, so it looks likely that it will be a Clinton win. Do not think there will be trouble though if Trump loses... what kind of trouble to you envisage Skid?

[Hoop]

The quote "The economy stupid" coined by James Carville (https://en.wikipedia.org/wiki/It%27s_the_economy,_stupid)(Bill Clinton's Campaign Strategist) outlined the recessionary times during 1992 Presidential race between Bill Clinton and George H.W.Bush...The phrase became a snowclone for American Political Culture
What is interesting is as far as I'm aware Hillary and her merry band haven't used the phase...maybe the economy is in too good a shape..eh..Obama reign started near the end of the GFC so His economy performance stats will be huge..

A recent Business Insider Article written by Elena Holodny on the 15th October basically sums it up with the article's title Elections and the stock market: History tells us economics matter more than politics. Could it be different this time? (http://www.businessinsider.com.au/what-happens-in-the-stock-market-after-us-elections-2016-9?r=US&IR=T)

Quote from Cafemom.com...In "Presidential Cycle," Ned Davis Research notes the S&P 500 posted its weakest returns in the first year of the four-year election cycle. Since 1900, stocks have gained just 3.4% on average in the post-election year, compared with gains of 4.0% in the midterm year, 11.3% in the pre-election year and 9.5% in an election year. See chart in Trustmarks PDF article

(https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&ved=0ahUKEwiXqcLI4-LPAhVP5WMKHWXKDIQQFghDMAY&url=http%3A%2F%2Fwww.trustmarkinvestmentadvisors.c om%2Fdocuments%2FSpecialCommentary-PresidentialElectionandEquityMarkets02-29-16.pdf&usg=AFQjCNEF_BCDnjP7iREqk466RDdrKU40Bg&cad=rja)How have stocks fared from Election Day to year's end? When a Democrat wins, stocks have lost 1%, while rising 4% if a Republican wins, Bespoke Investment Group (https://www.bespokepremium.com/think-big-blog/) says (paywall but has 14 day free trial) .

[arc]

Well....that did come out of left Field......I agree with PART of your prediction...If Trump wins(now 11.6% chance) there will be a very black Monday

Its certainly looking like there will be trouble when(88.4%)Trump loses--Narcissists do not take defeat nicely

Ive got a friend over there that is showing all the signs of being in a cult--seriously

GOLD--Ive heard gold bars make good doorstops........ seriously though--sometimes the best way to lose something is to try to hard to hide it----when is the last time you saw someone rifling through all that junk thats been under your garage for the last 10yrs

Skid, are you looking for that stack of gold bars you coated with Lead to look like old fishing sinkers...
Did the scrap man take them away...????

[Lewylewylewy]

Agree with the xmas slide (something that sounds more fun than it really is).

We've got:

Fed rates increase = money leaving nz investments
NZ OCR going down = money leaving NZ investments
Low inflations = outlook of more OCR dropping = speculation causing money to leave NZ investments
Trump risk = investors preferring cash

will continue up to xmas because of the spread of events through to xmas.

Good time to be committing to holding or selling up. I partially sold, but hold more than I wanted (I actually accidentally bought a load with a low ball offer I had sitting there, which kicked in after my sell. Grrr.). Iritating, but I'll just stick with my current holdings and ride it out, hopefully topping up around xmas. I'm just imagining that I put the money in a crap return term deposit, because I'll still get divies and investments are safe - there's no risk with this drop, but missed out on bargains.

[BlackPeter]

...
Do not think there will be trouble though if Trump loses... what kind of trouble to you envisage Skid?

Maybe this kind of trouble?

http://www.nbcnews.com/politics/2016-election/donald-trump-s-rigged-election-claims-raise-historical-alarms-n667831


Historians say Trump's sustained effort to call the process into question has no close parallel in past elections. And some are increasingly worried that his claims — for which he's offered no real evidence — could leave many of his supporters unwilling to accept the election results, potentially triggering violence and dangerously undermining faith in American democracy.



"We're going to have a revolution and take them out of office if that's what it takes" if Clinton wins, a Trump backer told The Boston Globe at a rally in Ohio. "There's going to be a lot of bloodshed. But that's what it's going to take."

Last week, two armed Virginia men supporting Trump stood for hours outside a Democratic campaign office to "protest" Clinton. The action was legal, but it appeared designed to intimidate.

[xafalcon]

The bookies give Clinton a 82% chance of winning and Trump a 15.6% chance, so it looks likely that it will be a Clinton win. Do not think there will be trouble though if Trump loses... what kind of trouble to you envisage Skid?

Just wondering if those are the same bookies that predicted Bremain was 3:1 favourite

Polling is meaningless unless the sample set is representative of the voters who turn out on the day.

And in the US, the presidential election result rests on the voters in about 5 "swing states".

[Beagle]

Wonder is 6500 on the cards for the NZX50 ?

[Beagle]

Well if the market doesn't get a lift today from Wall St then I think my theory of a good 10-15% correction looks likely to happen.

[skid]

Well if the market doesn't get a lift today from Wall St then I think my theory of a good 10-15% correction looks likely to happen.

Kiwi down -Oz up:confused:

[arc]

Well if the market doesn't get a lift today from Wall St then I think my theory of a good 10-15% correction looks likely to happen.

Indeed

The market seems to be paused today..?. catching its breath for ??


When the boy runs out of fingers to plug the developing holes in the dyke, then downstream looks increasingly hazardous to me.

[skid]

They are starting to make some relatively strong hints about raising the interest rate (Fed) The market may well spit the dummy on that one---wouldnt be a nice Christmas prezzy

[Beagle]

Well I reckon a pathetic 3 point gain on the back of a 7.9% correction since early September and a reasonably strong DOW overnight is a sign this correction is not done and dusted yet by any stretch of the imagination. 10-15% correction still my base case assumption in the short term, just over half done already, (he says rather hopefully).

[Baa_Baa]

Day by day, it's feeling worse and worse, and all the daily chart indicators are pointing down though approaching oversold. However that micro daily view needs some perspective imho.

Stepping back and taking a look at the monthly chart (log scale), with simple 2 Standard Deviation channel drawn (of the entire uptrend) and still above the 10 month MA (approximates a 200 day MA), NZX is still in a very strong uptrend.

A drop through that 10 month MA and the steep rising trend line line (green), if it happened, would be cause for some concern about the up trend, and the 5,580 level appears to offer some backstop support. It's uncanny how the Fibonacci retracements land right on those supports, and even the May-Oct 2007 highs are smack on the Fib 61.8%. Spooky how those Fibs work.

8384

[littletramp]

Can I throw this out there and ask for comment or opinion. Are the Kiwisaver "fixed interest rate" managed funds tied to an index in some way to measure contributors account holding? Do these work like bonds where as interest rates/yields fall the bond value increases? If so, are there potentially going to be some very disappointed wage earners in the future, who have been advised or chosen to stick with a so called conservative saving plan, only to find that should interest rates start to rise in the future they experience a degree and possibly significant amount of capital value loss?

Here is a link to an article that discusses the issue I see as potentially concerning for Kiwisaver investors in Bond accounts thinking they are conservative. I understand the comments that there is no capital loss if the investment is held to maturity, but if the saver withdraws from the fund before maturity of the bonds as most will do, there may be significant loss of capital. There is also "inflation loss" if interest rates move higher and you are sitting at a lower rate. There is real potential that when you want your money out at 65, there is less in your account than you put in. Happy to be proven wrong on this.

http://www.businessinsider.com.au/heres-why-bond-investors-are-so-scared-of-rising-interest-rates-2016-10

[arc]

Day by day, it's feeling worse and worse, and all the daily chart indicators are pointing down though approaching oversold. However that micro daily view needs some perspective imho.

Stepping back and taking a look at the monthly chart (log scale), with simple 2 Standard Deviation channel drawn (of the entire uptrend) and still above the 10 month MA (approximates a 200 day MA), NZX is still in a very strong uptrend.

A drop through that 10 month MA and the steep rising trend line line (green), if it happened, would be cause for some concern about the up trend, and the 5,580 level appears to offer some backstop support. It's uncanny how the Fibonacci retracements land right on those supports, and even the May-Oct 2007 highs are smack on the Fib 61.8%. Spooky how those Fibs work.

8384

Baa_Baa I agree with the sentiment but I just cant help the feeling that there is a speed bump in the world markets at the moment.

The NZ market displays the ongoing upward trend, remembering that trend lines are constructed from historical artifacts.

A downward movement on a 10 month scale wont really display until after the event, delayed reaction and all that... I used to believe in the 200 day moving average, until the advent of Automated Bot trading.

The international outlook from the narrow US perspective.. Dow Trend, Stalled since just after the beginning of 2015, a couple of hiccups since and now a basic failure to launch scenario.
8392

Perhaps the US Election will help... or not.

[Lewylewylewy]

So shares are going down the tubes and will probably keep doing so until xmas... is my opinion. However, I've chosen to forgo the opportunity to get more shares by selling and buying back later, in favour of holding on the off chance that they start going up again and I end up diluting my holding. My thinking is that the drop is only due to OCR in the USA and NZ + trump risk, the companies I hold shares in aren't due to perform any worse, so my dividend investments aren't at risk of dropping.

My question is... Is this naive / misinformed / faulted?

[xafalcon]

Day by day, it's feeling worse and worse, and all the daily chart indicators are pointing down though approaching oversold. However that micro daily view needs some perspective imho.

Stepping back and taking a look at the monthly chart (log scale), with simple 2 Standard Deviation channel drawn (of the entire uptrend) and still above the 10 month MA (approximates a 200 day MA), NZX is still in a very strong uptrend.

A drop through that 10 month MA and the steep rising trend line line (green), if it happened, would be cause for some concern about the up trend, and the 5,580 level appears to offer some backstop support. It's uncanny how the Fibonacci retracements land right on those supports, and even the May-Oct 2007 highs are smack on the Fib 61.8%. Spooky how those Fibs work.

8384

Re-do your chart using NZX capital index. Then re-consider conclusions.

[arc]

So shares are going down the tubes and will probably keep doing so until xmas... is my opinion. However, I've chosen to forgo the opportunity to get more shares by selling and buying back later, in favour of holding on the off chance that they start going up again and I end up diluting my holding. My thinking is that the drop is only due to OCR in the USA and NZ + trump risk, the companies I hold shares in aren't due to perform any worse, so my dividend investments aren't at risk of dropping.

My question is... Is this naive / misinformed / faulted?

The unanswerable question...

What is the possible impact on you IF the dividend payments are
a- Decreased in value-%
b- Stopped

IF the market recedes significantly, How long can you wait for market recovery.?

All this might just be nerves over the imminent US election, we might have business as usual afterwards... but personally I see more things in play than just that election... the world does not revolve around america. The international scene is also nervous.

Todays Low's may be next years Highs... or the reverse

[Baa_Baa]

Re-do your chart using NZX capital index. Then re-consider conclusions.

Here you go, NZX50 Capital Index, monthly Log scale, 2STD channel, 10/20 MA's, Fib Retraces from post GFC lows to recent high.

Feel free to give your conclusions.

8393

[xafalcon]

Recent dividends have masked some detail

Up trend less strong

90 day MA now trending down by the looks of it

Still not enough to call it though

But not such a rosy picture IMO

[arc]

News related sentiment "seems" to be that Trump is NOT going to be "The Man".
Mix that with the last 3 days pause in downward movements, some apparent support for AIR, AIA, FPH etc, one has to ask is this the real thing or potentially just a brief respite in what could still be a developing bear.

Are the volumes presently passing across the table
A- Real buying, hence real support
B- Instos and Large holders feeding the chickens on the way down
C- None of the above ?

Will the US Election result in a temporary Drunken-High followed by a world class Base Jump...?

Thoughts?

[BlackPeter]

News related sentiment "seems" to be that Trump is NOT going to be "The Man".
Mix that with the last 3 days pause in downward movements, some apparent support for AIR, AIA, FPH etc, one has to ask is this the real thing or potentially just a brief respite in what could still be a developing bear.

Are the volumes presently passing across the table
A- Real buying, hence real support
B- Instos and Large holders feeding the chickens on the way down
C- None of the above ?

Will the US Election result in a temporary Drunken-High followed by a world class Base Jump...?

Thoughts?

Actually - I think it is more complicated than just Trump or Clinton. Sure - a Trump win certainly would result in a BIG drop of stocks (high uncertainty of whats happening next) - while a Clinton win probably would result in a relief rally - unless the democrats take it all (House + senate - which is possible, but could lead to less fiscally responsible behaviour ...). I would however not see a Clinton administration to be the next trigger for a bear.

However, the other potential triggers don't go away: rising interest rates, some state bankrupts, Middle East getting out of hand, Putin starting WWIII - just take your pick :sleep: Personally would I think that none of these events is likely to cause the next big crash (given that people are aware of them and watch them) - more likely something unexpected happening (black swan event) ... but if we would know about it, it wouldn't be a black swan anymore.

Just watch the VIX (fear index) and start worrying if it is really low. Actually - I just checked and it is going down (and well below average) - Scary :eek2:

8398


Discl: hold roughly three times as much cash than normal ... and might need to review whether this is enough!

[Leftfield]

Just watch the VIX (fear index) and start worrying if it is really low. Actually - I just checked and it is going down (and well below average) - Scary :eek2:

8398




In fairness, if you look at the 5 year reading (i.e. longer term), the current levels seem much closer to the norm.

[arc]

Actually - I think it is more complicated than just Trump or Clinton. Sure - a Trump win certainly would result in a BIG drop of stocks (high uncertainty of whats happening next) - while a Clinton win probably would result in a relief rally - unless the democrats take it all (House + senate - which is possible, but could lead to less fiscally responsible behaviour ...). I would however not see a Clinton administration to be the next trigger for a bear.

However, the other potential triggers don't go away: rising interest rates, some state bankrupts, Middle East getting out of hand, Putin starting WWIII - just take your pick :sleep: Personally would I think that none of these events is likely to cause the next big crash (given that people are aware of them and watch them) - more likely something unexpected happening (black swan event) ... but if we would know about it, it wouldn't be a black swan anymore.

Just watch the VIX (fear index) and start worrying if it is really low. Actually - I just checked and it is going down (and well below average) - Scary :eek2:

8398


Discl: hold roughly three times as much cash than normal ... and might need to review whether this is enough!


Well that statement in Red would put a dent in an otherwise good day.. :)

[NeverQuestion]

Nope, just being paranoid of the Month :)

(Black Monday refers to Monday, October 19, 1987)

Here are a few others in October :

Panic of 1907 (https://en.wikipedia.org/wiki/Panic_of_1907) Oct 1907

Wall Street Crash of 1929 (https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929) 24 Oct 1929

Friday the 13th mini-crash (https://en.wikipedia.org/wiki/Friday_the_13th_mini-crash) 13 Oct 1989

October 27, 1997, mini-crash (https://en.wikipedia.org/wiki/October_27,_1997,_mini-crash) 27 Oct 1997

Stock market downturn of 2002 (https://en.wikipedia.org/wiki/Stock_market_downturn_of_2002) 9 Oct 2002

https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets

I swear this time of year is cursed if only by those with long memories.. But December normally picks up so will be moving my kiwi saver back then to take the gains :P

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11734708

[see weed]

I swear this time of year is cursed if only by those with long memories.. But December normally picks up so will be moving my kiwi saver back then to take the gains :P

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11734708
Well that"s good, only 5 trading days to go till the end of Oct.....My lucky month....born on the 19th. Might start buying up now, before the rush next week;).

[arc]

Reading the Business section of the Herald, they state that nearly 50% of the free-float of the NZ market is foreign owned, compared with 25% 4 years ago.

Strong implications for International Sentiment taking control (for better or for worse) and pulling us down just as quick as European markets.... no wonder we are seeing volatility.

[Lewylewylewy]

I think towards the end of the year we'll see SPs of performing companies go up on lower volumes. But not before more dropping

[Leftfield]

Maybe this will postpone Black Monday!?

http://www.bloomberg.com/news/articles/2016-10-25/new-zealand-dethrones-singapore-as-easiest-place-to-do-business

[xafalcon]

Maybe this will postpone Black Monday!?

http://www.bloomberg.com/news/articles/2016-10-25/new-zealand-dethrones-singapore-as-easiest-place-to-do-business

I would strongly doubt it will make a slight bit of difference.

In my experience the NZ market's largest influence appears to be the herd mentality of the international institutional investor

With the huge foreign exposure the NZX has, our market is exposed to any changes in investment strategy, either NZX positive or negative.

Company fundamentals don't seem to have much bearing, so I wouldn't think the ease of setting up business in NZ would either

Potentially good for NZ economy though

[dobby41]

In my experience the NZ market's largest influence appears to be the herd mentality of the international institutional investor

With the huge foreign exposure the NZX has, our market is exposed to any changes in investment strategy, either NZX positive or negative.

Company fundamentals don't seem to have much bearing, so I wouldn't think the ease of setting up business in NZ would either

Potentially good for NZ economy though

And for those international institutional investors when they buy and sell NZ they play with loose change really.
Makes a lot more difference to us than them.

[blobbles]

Is it just me or has sentiment really turned ugly on the NZX. Maybe its just companies that I liked the look of/researched but...

2 major company failures within the week.
A couple of weeks ago PPH listed on the ASX - SP dropped 20%.
TIL listed on ASX - SP not looking like it wants to break its mini down trend and no buyers in Aus.

Looks like funding has suddenly become a serious issue and the plug being pulled on hype companies, those not returning a buck or those not looking like they will grow a lot in the future. A real re-rating based on earnings. Am expecting the correction to continue... and today down 1.3% so far. So many of the shares I follow have sick, sick looking charts... but then again have for a little while now.

Its looking ugly out there! If you still have skin in the game, I name you brave!

[kiora]

Is it just me or has sentiment really turned ugly on the NZX. Maybe its just companies that I liked the look of/researched but...

2 major company failures within the week.
A couple of weeks ago PPH listed on the ASX - SP dropped 20%.
TIL listed on ASX - SP not looking like it wants to break its mini down trend and no buyers in Aus.

Looks like funding has suddenly become a serious issue and the plug being pulled on hype companies, those not returning a buck or those not looking like they will grow a lot in the future. A real re-rating based on earnings. Am expecting the correction to continue... and today down 1.3% so far. So many of the shares I follow have sick, sick looking charts... but then again have for a little while now.

Its looking ugly out there! If you still have skin in the game, I name you brave!

Yes blobbles I agree,blood red.Real computational!I wonder what the FIBS show?

[BlackPeter]

Is it just me or has sentiment really turned ugly on the NZX. Maybe its just companies that I liked the look of/researched but...

2 major company failures within the week.
A couple of weeks ago PPH listed on the ASX - SP dropped 20%.
TIL listed on ASX - SP not looking like it wants to break its mini down trend and no buyers in Aus.

Looks like funding has suddenly become a serious issue and the plug being pulled on hype companies, those not returning a buck or those not looking like they will grow a lot in the future. A real re-rating based on earnings. Am expecting the correction to continue... and today down 1.3% so far. So many of the shares I follow have sick, sick looking charts... but then again have for a little while now.

Its looking ugly out there! If you still have skin in the game, I name you brave!

OK - I never understood the hype around listing any company on the ASX - what the ASX can offer is more capital IF investors think that the company offers good value ... they don't just push the price up for any hyped up Kiwi company.

Agree - market sentiment does not look that flash - my broker told me that big international investors started some weeks ago to pull money out of the NZX. The sentiment is now that the Kiwi $ is too dear ... and they don't want to be invested if & when it comes down (which makes perfect sense). I am not sure, whether they are right, but this is what they think.

However - not everything looks bad these days: For example - both AIR and SKL went against the trend, and some others are nicely holding their price. I am holding more cash than normal, but still roughly 2/3 rd's invested. Assume that some of the more solid companies will first drop - and than offer buying opportunities - particularly if the Kiwi $ obliges.

[Beagle]

A few weeks ago I made the call privately by e.mail to a couple of good mates that I felt strongly that the market felt like it wanted to have a good old fashioned 10-15% correction. I have been over 70% cash for a few weeks now and I'm in no hurry whatsoever to reinvest !

With one or two exceptions it is very ugly out there and there's real sustained momentum to the downside.

As I posted last week, I seriously wonder if 6500 is on the cards for the NZX, that would amount to a 14% correction at the thick end of my expected range but with the amount of momentum and the fact that overseas shareholders hold about 50% by value of the NZX and with the RBNZ widely expected to lower the OCR next month its certainly understandable why overseas investors are worried about a declining Kiwi ! They appear to be shooting first with the sell button and asking questions later which is basically what I've been doing too. Why bother pushing back against a rolling train ?

In my view capital preservation is the name of the game right at the minute.

[couta1]

Looks like the Grizzly bears come out after lunch and gave the Teddy bears their marching orders from the picnic table. Still 100% in the market, no worries aye if your used to large or extra large red arrows.

[Ggcc]

Wow what a lovely sea of red arrows today. I don't think we are at the end of it though. Must be time to only drink cheap wine.

[Edwood]

Is it just me or has sentiment really turned ugly on the NZX. Maybe its just companies that I liked the look of/researched but...

2 major company failures within the week.
A couple of weeks ago PPH listed on the ASX - SP dropped 20%.
TIL listed on ASX - SP not looking like it wants to break its mini down trend and no buyers in Aus.

Looks like funding has suddenly become a serious issue and the plug being pulled on hype companies, those not returning a buck or those not looking like they will grow a lot in the future. A real re-rating based on earnings. Am expecting the correction to continue... and today down 1.3% so far. So many of the shares I follow have sick, sick looking charts... but then again have for a little while now.

Its looking ugly out there! If you still have skin in the game, I name you brave!

The writing has been on the wall since the recent weekly selling spike followed by three red candles, we'll be heading for 5,900 in my view, the market has needed a decent shakeout for a while now and we're lined up for it as the yield play unwinds. Quite right that >50% is owned offshore, and no surprise really given the carry trade on offer. Could take a while to get to 5,900 tho, depends how aggressive they want to be offshore... at some point it will spill over into AKL property.

[BlackCross]

Interesting and positive article regarding New Zealand in yesterdays FT Alphaville section.

http://ftalphaville.ft.com/2016/10/31/2178469/whats-bad-for-australia-is-good-for-new-zealand/

What’s bad for Australia is good for New Zealand? (http://ftalphaville.ft.com/2016/10/31/2178469/whats-bad-for-australia-is-good-for-new-zealand/)"..................................The net effect has been a boom in net immigration to New Zealand since Australia’s commodity prices peaked, with about two-thirds of the increase attributable to changes in the willingness of Australians to move to New Zealand and changes in the willingness of Kiwis to remain in their homeland. At the same time, the change in relative fortunes has caused the New Zealand dollar to appreciate roughly 25 per cent against the Australian dollar, boosting the purchasing power of Kiwi consumers.China’s changing investment strategy has produced a windfall for New Zealand — through the unexpected channel of clobbering the Australian mining sector. As long as New Zealand is capable of boosting domestic spending without relying too much on household borrowing, admittedly a nontrivial challenge, this puts the country in an enviable position compared to much of the rest of the rich world. Policymakers should enjoy it while they can.

[arc]

This guy thinks he has the "formula" for selecting the next president..

http://www.msn.com/en-nz/news/world/professor-who%E2%80%99s-predicted-30-years-of-presidential-elections-correctly-is-doubling-down-on-a-trump-win/ar-AAjxYGu?ocid=spartanntp

[workingdad]

The writing has been on the wall since the recent weekly selling spike followed by three red candles, we'll be heading for 5,900 in my view, the market has needed a decent shakeout for a while now and we're lined up for it as the yield play unwinds. Quite right that >50% is owned offshore, and no surprise really given the carry trade on offer. Could take a while to get to 5,900 tho, depends how aggressive they want to be offshore... at some point it will spill over into AKL property.

I am all but cashed up, looking at 100k in a 5 month term deposit with BNZ for 3.5%. Just been sitting back waiting for a decent correction for a while now and have some imputation credits to burn through from AIR so might as well - if I need to break it to throw money back in to the market so be it but sitting on the fence isn't doing much for me at the moment and still cant shake the feeling the market is overpriced.

[pierre]

I am all but cashed up, looking at 100k in a 5 month term deposit with BNZ for 3.5%. Just been sitting back waiting for a decent correction for a while now and have some imputation credits to burn through from AIR so might as well - if I need to break it to throw money back in to the market so be it but sitting on the fence isn't doing much for me at the moment and still cant shake the feeling the market is overpriced.
Just remember the banks require 30 days notice now to break a TD before expiry of the term.

[blobbles]

Can anyone with a decent charting app indicate at what value NZX50 is stepping out of its start of 2012 bull price channel? Looks to be about 6800 odd, which could be taken out today with another drop like yesterday... at that point I would assume technicals are looking pretty weak with a major trend reversal possible... its got to happen some time!

Or am I just making stuff up?


(Ignore this, just noticed people have been talking about it on the other NZX50 thread, duh)

[JeremyALD]

My thoughts on NZX50 last two months through a song.....and I'm free I'm free falling.

[Mush]

Can anyone with a decent charting app indicate at what value NZX50 is stepping out of its start of 2012 bull price channel? Looks to be about 6800 odd, which could be taken out today with another drop like yesterday... at that point I would assume technicals are looking pretty weak with a major trend reversal possible... its got to happen some time!

Or am I just making stuff up?


(Ignore this, just noticed people have been talking about it on the other NZX50 thread, duh)

Here is a 5Y chart with the trend channel from 2011 and the 2016 channel. Looks like the target could be somewhere between 6,300-6,500. Risk off sentiment looks as though it will continue into December if not longer.

8428

[workingdad]

Just remember the banks require 30 days notice now to break a TD before expiry of the term.

Thanks for that, have the ability to use a revolving credit facility for about half that amount so not too much of an issue. Interesting to see how it all settles post election.....

[bull....]

us hit the bottom of the trading range yesterday reversed today bearish im watching 17800 , 2070

still on maybe what ya reckon this week or next week bad if it happens back in that giant trading range 16000 - 18000 failed big break out oh my god it could get nasty

[TJP]

Holy hell, I knew when my intuition said "get the hell out" I should have cashed up. Still up but not out.... to complete JeremyALDs song..."free falling now I'm, free falling...."

[xafalcon]

Here is a 5Y chart with the trend channel from 2011 and the 2016 channel. Looks like the target could be somewhere between 6,300-6,500. Risk off sentiment looks as though it will continue into December if not longer.

8428

I always suggest using NZX capital index, as dividends can mask transition points, amplify apparent uptrends and minimise apparent downtrends

[Mush]

I always suggest using NZX capital index, as dividends can mask transition points, amplify apparent uptrends and minimise apparent downtrends

I tend to disagree.

8434

[xafalcon]

Increase the granularity significantly ie. the past 6-9 months

I am not talking chalk & cheese differences, they are subtle. But at a transition point IMO the capital index gives a clearer picture

Looking at your graph, it appears that you can already see the magnitude of the recent NZX capital index fall appears greater than NZX50 decline (my reason #3)

You should also find the capital index peak occurred earlier than NZX50 peak (my reason #1), and was lower (my reason #2)

Go back a couple of pages in this tread and read the posts BaaBaa and myself

But everyone has a different preference when analysing data, so if you prefer using NZX50 data, go right ahead.

[Mush]

My point is that it's irrelevant what data you use, the differences are immaterial and do not provide a different conclusion to the current situation.

In actual fact, both charts show September 7th as peak for both NZCI and NZX50 so I'd be double checking the data.

Regardless, both indicate solid formation of downtrends. Which, IMO is set to continue given the global risk-off environment we are in.

[stevevai1983]

I took big hit recently
my holdings:
SKC: bang!
TIL: bang!
SUM: bang!
SCL: not bad

However during this on-going correction some stocks are finally close to "realistic" price.
I am interested in RYM IFT EBO FRE CNU... if they drop more i will deploy new long term capital

[BlackPeter]

I took big hit recently
my holdings:
SKC: bang!
TIL: bang!
SUM: bang!
SCL: not bad

However during this on-going correction some stocks are finally close to "realistic" price.
I am interested in RYM IFT EBO FRE CNU... if they drop more i will deploy new long term capital

Should have sold, when the charts told you to ...;)

Anyway, depending on your risk appetite it might be sensible to wait until we know the outcome of the US election before deploying new capital. Sure - if Hillary wins, than a good time to buy might be now, but what if Trump wins?

[GTM 3442]

Should have sold, when the charts told you to ...;)

Anyway, depending on your risk appetite it might be sensible to wait until we know the outcome of the US election before deploying new capital. Sure - if Hillary wins, than a good time to buy might be now, but what if Trump wins?

In that case, I would look at the aerospace/defence indices. After all, there will be a need for increased US expenditure on controlling civil unrest.

[stevevai1983]

Should have sold, when the charts told you to ...;)

Anyway, depending on your risk appetite it might be sensible to wait until we know the outcome of the US election before deploying new capital. Sure - if Hillary wins, than a good time to buy might be now, but what if Trump wins?

I don't really care about charts...
Anyway i only invest spare money into stock markets. Time horizon is about 20 years.
Basically every month % of my household income goes into NZ/US/China stock markets.
So i tend to buy good company with reasonable price and just hold it. Only sell them when fundamental changes.
If NZ market keep dropping then my next few rounds of new capital will buy some good NZ companies to create a more diversified NZ portfolio. :)

[Beagle]

Trump wins then bear, bare, beer then bier

[Baa_Baa]

Should have sold, when the charts told you to ...;)

For interest sake @BlackPeter, when exactly did the charts say sell, for the companies Stevevai1983 mentioned? TIA.

SKC: bang!
TIL: bang!
SUM: bang!
SCL: not bad

[BlackPeter]

Trump wins then bear, bare, beer then bier

No need to look for an excuse to drink bier ... but honestly - if Trump wins, than I think I need something stronger!

[Beagle]

No need to look for an excuse to drink bier ... but honestly - if Trump wins, than I think I need something stronger!

Agree with your thoughts BP, definitely something stronger but this is what I meant by bier https://en.wikipedia.org/wiki/Bier with that loose cannon in charge of the nuclear codes..may God have mercy on our souls.

[Lewylewylewy]

I'm picking that it'll keep going down until very early next year. If Hillary wins, it'll be a small uptrend then continue down. It'll pick up again early mid next year after a round of good announcements when people realise that there are actually bargains of well performing companies.

... If Trump gets in, however... It will be down, down, down with a small bump on good announcements next year (2017), then it'll entirely depend on what damage he causes. There will be generally more fear as he makes outlandish statements. Difficult to predict beyond that.

Personally, my gut says that he'll get into power :(

On the plus side, there'll be some bargains around for the smart investor.

[BlackPeter]

For interest sake @BlackPeter, when exactly did the charts say sell, for the companies Stevevai1983 mentioned? TIA.

SKC: bang!
TIL: bang!
SUM: bang!
SCL: not bad

SKC: first warning when SP fall n early September through the MA50 (SP roughly $4.84) and final warning when it passed in mid September the MA200

TIL: first warning when SP played in September around the MA50 (SP roughly $4.50) and final warning when it passed in late October the MA200 (around $3.65);

SUM: I sold after passing the MA50 and more after passing the MA100. Increased however somewhat close to the MA200 (which may or may not turn out to be a mistake);

SCL: apparently not an issue, though selling at the MA50 and buying at the MA 200 would have been cool ...

Discl: hold SUM ...

[skid]

IF Trump gets into power will he be Hard Trump or Soft Trump? (apologies to Hard Brexit/ Soft Brexit)

what if Trump gets in but Democrats win the Senate big time and he cant really do much--Then there will be tantrum Trump--Cant think of a worse case scenario for a narcissist to be blocked at every corner.:p

[arc]

IF Trump gets into power will he be Hard Trump or Soft Trump? (apologies to Hard Brexit/ Soft Brexit)

With his type of Bi-Polar personality he can be hard-trump in the morning and soft-trump in the afternoon. The personality profile suggests narcissism and unresolved anger mixed together.
What more could you want in a world leader.

What if Americans vote and they come out with a vote of NO-CONFIDENCE... wouldn't that be interesting ( yes, I know they dont have that option on the forms but perhaps they should introduce it, in a time when either option is unwise you need a method of cleaning the slate and starting again)

[skid]

With his type of Bi-Polar personality he can be hard-trump in the morning and soft-trump in the afternoon. The personality profile suggests narcissism and unresolved anger mixed together.
What more could you want in a world leader.

What if Americans vote and they come out with a vote of NO-CONFIDENCE... wouldn't that be interesting

There is ofcourse the possibilty of impeachment on constitutional grounds(when he stuffs up big time)..but then you would have Pence(OMG!)

[Vaygor1]

IF Trump gets into power will he be Hard Trump or Soft Trump? (apologies to Hard Brexit/ Soft Brexit)

My guess:

If Trump wins the future will be a fair bit uncertain (as to where he will take the country)
If Clinton wins the future will be a fair bit of uncertain (about her ability to fulfill the role given the ongoing scrutiny she is under)

Either way, the future will be more certain post-election than it is today, as no one yet knows who will preside. So, as has happened in the previous US elections, the share market will recover once the winner is known irrespective of who it is imho.


In saying this, if Trump is victorious, I think the initial reaction will likely be a one week slump across the bourse in general (like happened with Brexit) until the media get over it and normality returns. If Clinton wins, I think there will likely be a small recovery in the 1st instance but 'normality' might take a very long time to return given the ongoing investigation(s) she is under.

In my view the worst case is a tie, or an election result that is contested ad nauseam.. which will drag the current level of uncertainty on and on.

[Baa_Baa]

The elected US president is not decided solely on the popular vote (ref Al Gore), the senate and the congress have powerful roles to play. This could go on for weeks or months even after the election is over. Meantime, the markets would be in turmoil as the battles continued.

[corran]

I'm picking this coming Monday to be black Monday. Markets are nervous due to uncertainty about the US election. I reckon more negative news about Hillary Clinton will emerge this weekend which will be the trigger for the selloff monday.

Just my 2c :-)

[bull....]

I'm picking this coming Monday to be black Monday. Markets g=are nervous due to uncertainty about the US election. I reckon more negative news about Hillary Clinton will emerge this weekend which will be the trigger for the selloff monday.

Just my 2c :-)

yep theres rumours some big bombshell gonna come from weakileaks shortly - time will tell if its just L-O-S if its real could be

[fungus pudding]

yep theres rumours some big bombshell gonna come from weakileaks shortly - time will tell if its just L-O-S if its real could be

There's every chance Trump will be the next to get some unwanted publicity. I have no doubt there's a heap of bad news Trump stories just waiting to be told.

[Scrunch]

There's every chance Trump will be the next to get some unwanted publicity. I have no doubt there's a heap of bad news Trump stories just waiting to be told.

For me the question is - If you had a knock-out punch story re Trump when would you release it?

My guess is that if you had such a story and were either looking to maximize the revenue from selling it or the political impact of releasing it, you probably would have done so already. To me this indicates there won't be a knock-out punch story. One, or several stories about someone Trump screwed over in his past - yea there's a good chance around that.

[Baa_Baa]

For me the question is - If you had a knock-out punch story re Trump when would you release it?

My guess is that if you had such a story and were either looking to maximize the revenue from selling it or the political impact of releasing it, you probably would have done so already. To me this indicates there won't be a knock-out punch story. One, or several stories about someone Trump screwed over in his past - yea there's a good chance around that.

Good summation, while the scuttlebutt emerging right now is all about a knockout punch for Clinton. Fascinating drama, the establishment versus the anti-establishment, though neither are particularly appealing.

[Jaa]

The elected US president is not decided solely on the popular vote (ref Al Gore), the senate and the congress have powerful roles to play. This could go on for weeks or months even after the election is over. Meantime, the markets would be in turmoil as the battles continued.

A "hung" electoral college would be the worst scenario. Either from Ed Mullins winning Utah and holding the balance of power or some Republican "electors" refusing to support Trump following a future scandal, either scenario could plunge the US and markets into chaos for months.

My money is on Hillary sneaking home but without a mandate and house/senate to get much done. A recipe for further paralysis but not chaos.

[Baa_Baa]

A "hung" electoral college would be the worst scenario. Either from Ed Mullins winning Utah and holding the balance of power or some Republican "electors" refusing to support Trump following a future scandal, either scenario could plunge the US and markets into chaos for months.

My money is on Hillary sneaking home but without a mandate and house/senate to get much done. A recipe for further paralysis but not chaos.

The Herald has an interesting article today along these lines referring Al Gore vs GW Bush in the 2000 election. http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11742867

[skid]

A "hung" electoral college would be the worst scenario. Either from Ed Mullins winning Utah and holding the balance of power or some Republican "electors" refusing to support Trump following a future scandal, either scenario could plunge the US and markets into chaos for months.

My money is on Hillary sneaking home but without a mandate and house/senate to get much done. A recipe for further paralysis but not chaos.

Yes,the Senate has certainly become a much closer race than before.

[skid]

I'm picking this coming Monday to be black Monday. Markets are nervous due to uncertainty about the US election. I reckon more negative news about Hillary Clinton will emerge this weekend which will be the trigger for the selloff monday.

Just my 2c :-)

Its gone from Democracy(kind of) to..whose the best at corrupting democracy (at at least influencing it)

[Lewylewylewy]

Imagine being Donald Drumpf and seeing share markets collapse at the fear that he may be in charge of things

[bohemian]

If he was aware of that I would feel more confident, but I don't think he would. What we can be sure of is that Putin would be comfortable with a useful idiot in the White house.

[BlackPeter]

If he was aware of that I would feel more confident, but I don't think he would. What we can be sure of is that Putin would be comfortable with a useful idiot in the White house.

Just wonder what Dumb will do if he doesn't win ... no way for him than to re-pay Putin, and I hear the Russians are pretty rough if you owe them.

Would love to see this crook disappearing in Siberia ...

[bohemian]

I bet he loves being called The Don. Maybe he might wake up with a horses head, not sure what the Russians are into, can't be nice though.

[xafalcon]

The US election is certainly a market mover right now. But IMO the more significant medium term driver of the NZX is the potential for foreign investors to cash up their NZX holding. Foreign NZX holdings have increased from 25% to 50% over the past few years. This is huge. If a significant portion of this recent increase in foreign holding is liquidated, it could be a significant cause for market weakness. A big sharp drop if they all run for the door at once, or a prolonged downtrend if foreign holdings are sold on rallies. But if foreign investors continue to see value in the NZX and don't cash up their investments, the US election will quickly become an historical effect, just like the Brexit vote. And "normal programming will resume shortly"

[bull....]

Big week this week, possible market crash under the right scenario - dow fallen back into 2yr sideways channel with the bottom at 15370. normally a failed breakout retests the lows of the channel? normally


21/8/2015 17568-15370, 2 weeks, 2198 , 12.5%
8/1/2016 17405-15370. 3 weeks, 2035 , 11.7%
now 17888 - 15370 , 2-3 weeks, 2518, 14.07% ???????

very dangerous period we are entering

[skid]

If he was aware of that I would feel more confident, but I don't think he would. What we can be sure of is that Putin would be comfortable with a useful idiot in the White house.

And Ironically ,that would suit ISIS as well (It plays right in to their strategy of separating all Muslims from rest of humanity) They would like nothing better than for the vast majority of peaceful Islamist's to get such a hard time that they all come over to ISIS in frustration.--

[fungus pudding]

For me the question is - If you had a knock-out punch story re Trump when would you release it?

My guess is that if you had such a story and were either looking to maximize the revenue from selling it or the political impact of releasing it, you probably would have done so already. To me this indicates there won't be a knock-out punch story. One, or several stories about someone Trump screwed over in his past - yea there's a good chance around that.

Knock out punches have an immediate effect - then fade. To be most effective the later the better, so don't be surprised if something comes out on Monday. (NZ Tuesday)

[skid]

The US election is certainly a market mover right now. But IMO the more significant medium term driver of the NZX is the potential for foreign investors to cash up their NZX holding. Foreign NZX holdings have increased from 25% to 50% over the past few years. This is huge. If a significant portion of this recent increase in foreign holding is liquidated, it could be a significant cause for market weakness. A big sharp drop if they all run for the door at once, or a prolonged downtrend if foreign holdings are sold on rallies. But if foreign investors continue to see value in the NZX and don't cash up their investments, the US election will quickly become an historical effect, just like the Brexit vote. And "normal programming will resume shortly"

A pretty dangerous situation--If things do go pear shaped,places like NZX would be the first to go as investors look for safety

Some say the $US.would take a hit because of ''trust' issues,but when markets tank,normally investors run to the reserve currency--interesting quandary---Gold?

Of course if Hillary wins,its more a matter of how much the markets will gain.(unless trump manages to create a mess with his stubborness in terms of conceeding) Its very hard to imagine him humble---....and then.. with the Fed decision looming ,there are more potential pitfalls

So far the market have always managed to shake off whatever comes up--until they dont

[bull....]

A pretty dangerous situation--If things do go pear shaped,places like NZX would be the first to go as investors look for safety

maybe before I don't think so at the moment , nzx is not flavour of the mth at the moment and still could fall another 1000pts to the bottom of its uptrend

[winner69]

Have we climbed the 'wall of worry' yet ....or are we on the 'slope of hope' at the moment

[Beagle]

A few weeks ago I made the call privately by e.mail to a couple of good mates that I felt strongly that the market felt like it wanted to have a good old fashioned 10-15% correction. I have been over 70% cash for a few weeks now and I'm in no hurry whatsoever to reinvest !

With one or two exceptions it is very ugly out there and there's real sustained momentum to the downside.

As I posted last week, I seriously wonder if 6500 is on the cards for the NZX, that would amount to a 14% correction at the thick end of my expected range but with the amount of momentum and the fact that overseas shareholders hold about 50% by value of the NZX and with the RBNZ widely expected to lower the OCR next month its certainly understandable why overseas investors are worried about a declining Kiwi ! They appear to be shooting first with the sell button and asking questions later which is basically what I've been doing too. Why bother pushing back against a rolling train ?

In my view capital preservation is the name of the game right at the minute.

This from 26 October. My 10-15% predicted correction has come to pass and we're now down 11.3% from the peak on Sept 7th. I still think 6500 over the next 3 days is a possibility. Went to 80% cash since the above post.

The real question is what to buy quickly on happy Thursday if Hillary wins ?...worthy of a thread all of its own I reckon.

[bull....]

This from 26 October. My 10-15% predicted correction has come to pass and we're now down 11.3% from the peak on Sept 7th. I still think 6500 over the next 3 days is a possibility. Went to 80% cash since the above post.

The real question is what to buy quickly on happy Thursday if Hillary wins ?...worthy of a thread all of its own I reckon.

isn't it only worth buying on Thursday if you think the markets will keep going up? a 2% jump on Thursday could just as easily be followed by a 3% fall on Friday when people relise Clinton win is still not that good

[bohemian]

FBI has just said emails are clear. I would be interested in stocks to buy with a more probable Clinton win.

[skid]

isn't it only worth buying on Thursday if you think the markets will keep going up? a 2% jump on Thursday could just as easily be followed by a 3% fall on Friday when people relise Clinton win is still not that good

and if the Fed does indeed raise the rate,youd have to get your profit before then (or even when the market reacts to the news that its probably going to happen---Seems like a more dangerous than average, time to be investing.---It may well be a ''money saved'' type Christmas ,rather than a ''money made'' one--- but then again,trying to predict the herd mentality is not an easy task--It certainly has no respect for logic many times--(just look at the States)

[Baa_Baa]

This from 26 October. My 10-15% predicted correction has come to pass and we're now down 11.3% from the peak on Sept 7th. I still think 6500 over the next 3 days is a possibility. Went to 80% cash since the above post.

The real question is what to buy quickly on happy Thursday if Hillary wins ?...worthy of a thread all of its own I reckon.

That's already an:

18% retrace of the whole up trend 2009 low to Sept high.
21% retrace of the steep up trend 2012 low to Sept high.

Trump wins, FUD reigns, markets tank.
Clinton wins, relief rally then Fed raises rates, markets tank.

Am also pretty much fully out now.

[mondograss]

Not sure about this whole "markets will tank when the Fed raises rates" theory. I mean it's not as if anyone will be pursuing those higher rates from a yield perspective, nor should a (very) gradual return to some sort of normality cause that much instability. Sure there'll be jitters but I'm not buying the wholesale crash perspective.

[Hoop]

Powers of the President of the United States (https://en.wikipedia.org/wiki/Powers_of_the_President_of_the_United_States)

Hmmm... scary stuff

Powers of the United States Congress (https://en.wikipedia.org/wiki/Powers_of_the_United_States_Congress)

[skid]

Powers of the President of the United States (https://en.wikipedia.org/wiki/Powers_of_the_President_of_the_United_States)

Hmmm... scary stuff

they didnt talk much about the nuclear launch codes

[skid]

Not sure about this whole "markets will tank when the Fed raises rates" theory. I mean it's not as if anyone will be pursuing those higher rates from a yield perspective, nor should a (very) gradual return to some sort of normality cause that much instability. Sure there'll be jitters but I'm not buying the wholesale crash perspective.

I doubt if that ,in itself would cause a ''crash'' ,maybe a correction due to the end of an era of easy money--but it could provide a starting point ,with other things coming into play. Just the hint of rate rises certainly spooks markets.

[mondograss]

There's little doubt that the US recovery seems fairly fragile, and the markets seem quite wary of anything that might stall it. So yes, the odd correction is likely to be the outcome of Fed rate rises. We're certainly heading into some uncertain territory at the moment.

[BlackPeter]

Not sure about this whole "markets will tank when the Fed raises rates" theory. I mean it's not as if anyone will be pursuing those higher rates from a yield perspective, nor should a (very) gradual return to some sort of normality cause that much instability. Sure there'll be jitters but I'm not buying the wholesale crash perspective.

Agreed. While markets typically get a bit wobbly knees every time the Fed increases interest rates, they are normally 6 months after the rise higher than before - exception is obviously the last rise prior to a trend change. Given that the current series of rate hikes just started (one 25 point hike so far), is it highly unlikely that the second 25 point hike will already turn the trend.

Obviously - lots of other things might convince the markets to crash, but at this stage I don't see the interest rates facilitating this scenario.

Actually quite the opposite ... our markets are currently drowning in cheap money - which is nearly as bad as having not enough. The current situation results in bad economic decision making. Increasing the cost of money from the current low levels can in my view improve the shape of the economy.

[pierre]

Not too many nerves on the NZX so far today - NZX50 up 32 points as I write. There must be increasing confidence that the Donald will be trumped by Hillary.

[Joshuatree]

Yep hopefully a coup de grace for chtrumpf with the FBI finding nothing and closing the Clinton email case again.But more surprises to come maybe for one or the other.

[pierre]

Not too many nerves on the NZX so far today - NZX50 up 32 points as I write. There must be increasing confidence that the Donald will be trumped by Hillary.

Plenty of happy Hillary supporters - or maybe just anti-Donald's. Whatever, one hour later and the market is up 84 points or 1.3%.

[Baa_Baa]

Plenty of happy Hillary supporters - or maybe just anti-Donald's. Whatever, one hour later and the market is up 84 points or 1.3%.

DOW & SP5 futures gapped up at open.

[Hoop]

What people don't realise atm is the major reason for the correction..simply put Wall St is extremely overvalued..
As I said over and over again..all the market needs is a catalyst to bust the Bull Cycle..The catalyst could be as miniscule as airflow from butterfly wings (The Butterfly Effect).
If Trump wins and the Sharemarket tanks, the media will make Trump a major causative issue when in reality Trump was just the "butterfly" in the wrong place at the wrong time.
My assumption is that if Clinton wins, a short term relief rally "may?" occur. However, Wall St's real problem (overvalued) doesn't go away and the overvalued market awaits for another catalyst to present itself..in other words, the Trump worry will immediately be replaced with another worry and there's plenty of worries out there..

A 135yr chart below simply emphasises how overvalued Wall St really is..
PE10 (Shiller) value around 25 is considered an area where most cyclic reversals are likely to occur...only three times in the last 135years did the price go above 25 without an immediate cyclic reversal and all 3 of those times resulted in a very destructive outcomes.

http://bonnerandpartners.com/wp-content/uploads/2014/09/010616-CAPE-Ratio.png
Edit: without earnings growth imagine what a PE10 value of 5 would look like in say 5 years time ..An S&P500 dropping from 2100 to 430..
Impossible you ask..Well, its the same as saying that PE25+ today was impossible...both have previously occurred 3 times in the last 135 years,,,

[sb9]

DOW & SP5 futures gapped up at open.

Hope its not another BREXIT kinda situation happening, with a pump and dump scenario playing out.....

[xafalcon]

What people don't realise atm is the major reason for the correction..simply put Wall St is extremely overvalued..
As I said over and over again..all the market needs is a catalyst to bust the Bull Cycle..The catalyst could be as miniscule as airflow from butterfly wings (The Butterfly Effect).
If Trump wins and the Sharemarket tanks, the media will make Trump a major causative issue when in reality Trump was just the "butterfly" in the wrong place at the wrong time.
My assumption is that if Clinton wins, a short term relief rally "may?" occur with Wall St however the real problem (overvalued) doesn't go away and the overvalued market awaits for another catalyst to present itself..in other words, the Trump worry will immediately be replaced with another worry and there's plenty of worries out there..

A 135yr chart below simply emphasises how overvalued Wall St really is..
PE10 (Shiller) value around 25 is considered an area where most cyclic reversals are likely to occur...only three times in the last 135years did the price go above 25 without an immediate cyclic reversal and all 3 of those times resulted in a very destructive outcomes.

http://bonnerandpartners.com/wp-content/uploads/2014/09/010616-CAPE-Ratio.png
Edit: without earnings growth imagine what a PE10 value of 5 would look like in say 5 years time ..An S&P500 dropping from 2100 to 430..
Impossible you ask..Well, its the same as saying that PE25+ today was impossible...both have previously occurred 3 times in the last 135 years,,,

Agree with this 100%

NZX potentially over-valued as well, although some heat has recently come out with NZX moving into correction

[arc]

Hoop, That graph ends in 2010, do you have a recent image..

Edit: All good, I found a site with the info.

http://www.multpl.com/shiller-pe/

Looking through the other charts you can see the "Stalled" nature of the US economy since roughly the beginning of 2015.

[pierre]

Up 164 points and +2.4%. If today was a Black Monday - let's have one like it every week.

As long as we don't end up with a Tentative Tuesday tomorrow, or a Washed out Wednesday or Trumpled Thursday later in the week. A Fabulous Friday would be OK though.

[Valuegrowth]

Up 164 points and +2.4%. If today was a Black Monday - let's have one like it every week.

As long as we don't end up with a Tentative Tuesday tomorrow, or a Washed out Wednesday or Trumpled Thursday later in the week. A Fabulous Friday would be OK though. If everything goes well, we should see fabulous Friday as well. According my study, I expected rebound in markets today.

[Hoop]

Hoop, That graph ends in 2010, do you have a recent image..

Edit: All good, I found a site with the info.

http://www.multpl.com/shiller-pe/

Looking through the other charts you can see the "Stalled" nature of the US economy since roughly the beginning of 2015.

The chart doesn't end in 2010, its up to 2015..I couldn't copy & paste the latest up to the day chart from the multpl.com over to the ST forum nor to my paint.net program..These guys are getting smarter with their anti-copying sites...eh..

The stalled nature of the US economy..yes this high debt to GDP is hampering the growth rate...recently there's been a spark of growth developing and Aunty Janet wants to increase interest rates....Well..The dismissed Austrian Economic Theory says the Central Banks create recessions..maybe they might be right...

[pierre]

Dow Jones up 371 points! Looks like US investors are pretty confident that Hillary will reach the summit - and knock the bastard off!

[blackcap]

Dow Jones up 371 points! Looks like US investors are pretty confident that Hillary will reach the summit - and knock the bastard off!

Indeed, but what are the implications of a Trump victory considering its about a 1 in 6 chance? If dow is up 370 on a 70% chance becoming a 84% chance what havoc would the 16% chance wreck if it did come in......

[pierre]

Indeed, but what are the implications of a Trump victory considering its about a 1 in 6 chance? If dow is up 370 on a 70% chance becoming a 84% chance what havoc would the 16% chance wreck if it did come in......

Not sure - but I think the formula for calculating the odds is E=MC2 or something like that.

[arc]

The chart doesn't end in 2010, its up to 2015..I couldn't copy & paste the latest up to the day chart from the multpl.com over to the ST forum nor to my paint.net program..These guys are getting smarter with their anti-copying sites...eh..

The stalled nature of the US economy..yes this high debt to GDP is hampering the growth rate...recently there's been a spark of growth developing and Aunty Janet wants to increase interest rates....Well..The dismissed Austrian Economic Theory says the Central Banks create recessions..maybe they might be right...

Apologies.. yes your right, I just needed to look closer at the graph

[Joshuatree]

Something else to worry about that a friend sent me.Chinese devaluation could also cause the mkts to plunge.This excerpt from"TTMYGH"

Chinese Capital Outflows Send FX Reserves To Lowest Since 2011
http://www.zerohedge.com/sites/default/files/pictures/picture-5.jpg (http://www.zerohedge.com/users/tyler-durden)Overnight, China reported that the PBOC’s FX reserves fell another US$46bn to US$3.121 trillion in October as the central banks struggled to offset the impact of accelerating capital outflows, a bigger drop than the consensus estimate of US$34bn, triple the official September decline of US$19bn (recall that according to Goldman, (http://www.zerohedge.com/printmail/576750)the true FX outflow in recent months has been far greater (http://www.zerohedge.com/news/2016-10-21/chinas-capital-outflows-are-soaring-again-goldman-finds-sept-fx-flows-surged-78-bill)
), and the biggest drop since January. The October decline brought China's total reserves the lowest amount since 2011.


http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/11/06/20161107_china_0.jpg (http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/11/06/20161107_china.jpg)
As we have shown previously, a separate dataset called "PBOC's FX position", which shows the amount of PBOC's FX assets at book value and is usually released around the middle of the month, should provide a cross-check on PBOC's FX sales net of valuation effects.
As Bloomberg notes (http://www.bloomberg.com/news/articles/2016-11-07/china-fx-reserves-drop-to-lowest-since-2011-on-outflow-pressure), the data come amid a period of renewed weakness for China’s currency. The yuan fell 1.53 percent last month, the most since a devaluation in August last year that shook investor confidence and ignited global market turmoil. Policy makers were suspected of propping up the exchange rate in the weeks leading up to a Group of 20 meeting in September and before the yuan’s entry into the International Monetary Fund’s reserves on Oct. 1 - and then reducing support after exports plunged the most in seven months. The currency fell to a six-year low of 6.7856 a dollar on Oct. 28.
The chart below which correlated China's outflows with the value of the Yuan suggests that either the currency is temporarily undervalued, or that the real amount of Chinese reserves, which may be unreported by the PBOC to prevent an even greater retail outflow scramble, may be as much as half a trillion dollars less than what has been officially reported.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/11/06/china%20res%20vs%20CNY_0.png
And with Chinese capital outflows speculated as soon becoming the biggest risk factor to global financial stability, in a repeat of late 2015, once the chaos surrounding the US presidential election is over, below are some economist reactions to the reported number:


“The yuan was sprinting all the way to approach 6.8 in October, which may have prompted the PBOC to sell some reserves to stabilize the market," said Gao Qi, a Singapore-based foreign-exchange strategist at Scotiabank. "Capital outflows will continue, the only questions is how fast, and that depends on the dollar’s move."
"Capital outflow pressures will be sustained at least for the coming months," said Frederik Kunze, chief China economist at Norddeutsche Landesbank in Hanover, Germany. "Growing anxiety with regard to the soundness of the Chinese financial markets and the fear of a property bubble have to be seen in this context."
"The number indicates relatively light intervention by PBOC during the month," said Ding Shuang, head of Greater China economic research at Standard Chartered Plc. in Hong Kong. Most of the drop comes from valuation effects, he said.
Faster yuan depreciation against the dollar, higher interbank interest rates, and PBOC liquidity injections via open market operations "pointed to continued capital outflows in October," said Robin Xing, an economist at Morgan Stanley in Hong Kong.

Should Clinton win tomorrow, and push the USD even higher on expectations of a December Fed rate hike, many strategists believe that the next stop for the Yuan will be to drop to a level somewhere in the vicinity of USDCNY 7.00.

[kiora]

Something else to worry about that a friend sent me.Chinese devaluation could also cause the mkts to plunge.This excerpt from"TTMYGH"

Chinese Capital Outflows Send FX Reserves To Lowest Since 2011
http://www.zerohedge.com/sites/default/files/pictures/picture-5.jpg (http://www.zerohedge.com/users/tyler-durden)Overnight, China reported that the PBOC’s FX reserves fell another US$46bn to US$3.121 trillion in October as the central banks struggled to offset the impact of accelerating capital outflows, a bigger drop than the consensus estimate of US$34bn, triple the official September decline of US$19bn (recall that according to Goldman, (http://www.zerohedge.com/printmail/576750)the true FX outflow in recent months has been far greater (http://www.zerohedge.com/news/2016-10-21/chinas-capital-outflows-are-soaring-again-goldman-finds-sept-fx-flows-surged-78-bill)
), and the biggest drop since January. The October decline brought China's total reserves the lowest amount since 2011.


http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/11/06/20161107_china_0.jpg (http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/11/06/20161107_china.jpg)
As we have shown previously, a separate dataset called "PBOC's FX position", which shows the amount of PBOC's FX assets at book value and is usually released around the middle of the month, should provide a cross-check on PBOC's FX sales net of valuation effects.
As Bloomberg notes (http://www.bloomberg.com/news/articles/2016-11-07/china-fx-reserves-drop-to-lowest-since-2011-on-outflow-pressure), the data come amid a period of renewed weakness for China’s currency. The yuan fell 1.53 percent last month, the most since a devaluation in August last year that shook investor confidence and ignited global market turmoil. Policy makers were suspected of propping up the exchange rate in the weeks leading up to a Group of 20 meeting in September and before the yuan’s entry into the International Monetary Fund’s reserves on Oct. 1 - and then reducing support after exports plunged the most in seven months. The currency fell to a six-year low of 6.7856 a dollar on Oct. 28.
The chart below which correlated China's outflows with the value of the Yuan suggests that either the currency is temporarily undervalued, or that the real amount of Chinese reserves, which may be unreported by the PBOC to prevent an even greater retail outflow scramble, may be as much as half a trillion dollars less than what has been officially reported.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/11/06/china%20res%20vs%20CNY_0.png
And with Chinese capital outflows speculated as soon becoming the biggest risk factor to global financial stability, in a repeat of late 2015, once the chaos surrounding the US presidential election is over, below are some economist reactions to the reported number:


“The yuan was sprinting all the way to approach 6.8 in October, which may have prompted the PBOC to sell some reserves to stabilize the market," said Gao Qi, a Singapore-based foreign-exchange strategist at Scotiabank. "Capital outflows will continue, the only questions is how fast, and that depends on the dollar’s move."
"Capital outflow pressures will be sustained at least for the coming months," said Frederik Kunze, chief China economist at Norddeutsche Landesbank in Hanover, Germany. "Growing anxiety with regard to the soundness of the Chinese financial markets and the fear of a property bubble have to be seen in this context."
"The number indicates relatively light intervention by PBOC during the month," said Ding Shuang, head of Greater China economic research at Standard Chartered Plc. in Hong Kong. Most of the drop comes from valuation effects, he said.
Faster yuan depreciation against the dollar, higher interbank interest rates, and PBOC liquidity injections via open market operations "pointed to continued capital outflows in October," said Robin Xing, an economist at Morgan Stanley in Hong Kong.

Should Clinton win tomorrow, and push the USD even higher on expectations of a December Fed rate hike, many strategists believe that the next stop for the Yuan will be to drop to a level somewhere in the vicinity of USDCNY 7.00.


But where is the money going JT?
Into overseas equities /real estate?It may have the opposite effect until it needs to be repatriated then markets tank.
All part of Chinese planning.

[arc]

But where is the money going JT?
Into overseas equities /real estate?It may have the opposite effect until it needs to be repatriated then markets tank.
All part of Chinese planning.


Personally I have been looking over the patterns emerging from Chinese investments worldwide. I dont think there is any worry about the money being placed as part of a pump-n-dump scheme. You are talking Trillions of dollar-equivalents, spread across a wide range of sectors from A-agriculture to Z-zoology... im not kidding. The Chinese are gaining knowledge and strength in international arenas. The patterns point strongly the acquisition of knowledge as the prime driver in most cases. Yes there is a drive to acquire hardware/resources/land etc but it is all wrapped up in a much bigger picture.

[Bobdn]

Markets definitely pricing in a Trump victory now. Overall, through investment in oil stocks, I should do ok out of this.

[bull....]

Big week this week, possible market crash under the right scenario - dow fallen back into 2yr sideways channel with the bottom at 15370. normally a failed breakout retests the lows of the channel? normally


21/8/2015 17568-15370, 2 weeks, 2198 , 12.5%
8/1/2016 17405-15370. 3 weeks, 2035 , 11.7%
now 17888 - 15370 , 2-3 weeks, 2518, 14.07% ???????

very dangerous period we are entering

watch that level

[pak]

Selling hard into the close. TRUMP could actually win!

[arc]

Selling hard into the close. TRUMP could actually win!



The Lemmings are coming out to play... bring it on

[arc]

Almost time to start putting buckets out to catch those lemmings on the way down.


Crowd psychology and the Herd instinct are powerful forces when driven by million's of people.

[skid]

NZX down 3.5%

[GR8DAY]

Dont panic folks..........trump the chump is not going to win!!

[Yoda]

Well just in case , I ve cashed up... Insurance policy payment .

[vin]

Dont panic folks..........trump the chump is not going to win!!

Ha, I doubt it.. It'll be very close. Pretty stoked I cashed up a month ago. It'll be an interesting couple of weeks.

[fungus pudding]

Dont panic folks..........trump the chump is not going to win!!

I agree, but commentators seem to think otherwise. West coast should turn it around. Plus 29 in New York.

[blackcap]

I agree, but commentators seem to think otherwise. West coast should turn it around. Plus 29 in New York.

The 29 in New York are already factored in.

[ratkin]

The 29 in New York are already factored in.

1.20 on trump being the next president. WAS 1.10 clinton couple of hours ago

[NeverQuestion]

Perhaps this is the catalyst for a crash? Mass panic in the stock market atm

[Bobdn]

Oh, I think Trump is definitely going to win.

[arc]

Trumps lead is accelerating

Alaska is traditionally Republican... ( more votes for trump)

[Bobdn]

Honestly, this will be the mega market pull back we all need. In 5 years time we'll be grateful for it (sorry traders, talking to investors here)

[couta1]

Honestly, this will be the mega market pull back we all need. In 5 years time we'll be grateful for it (sorry traders, talking to investors here) Can't see how that would help long term investors unless you'rve got spare cash to pick up some bargins, otherwise it's just batten down the hatches and wait it out. PS-My red arrow grew significantly larger over the last couple of hours.
.

[silu]

Used some funds to buy some stock on the ASX that plummeted because of the US Elections news. Will try to pick up some on the NZX tomorrow as well.