Bottom or bear rally?

[Lego_Man]

The bear is back baby!

YEEHAW!

[trackers]

Figured we were due for a speed bump, cashed up a position this week in anticipation of it... Will be looking to buy oilers today on weakness.

[BIG D]

9.30am NZ

Index data delayed 30 min.
DJIA 8,292.13 -129.91
NASDAQ 1,695.25 -32.59
NIKKEI 9,264.15 -80.49
RUSSELL 481.22 -8.13
NYSE 5,780.54 -89.85
TSX 9,956.09 -276.35
USD 80.57 -0.49
Crude Oil 61.10 -0.94

[Dr_Who]

Good opportunity to pick up some cheap stocks on market weakness?

I am tempted.

[JBmurc]

Good opportunity to pick up some cheap stocks on market weakness?

I am tempted.

yeah esp. cheap goldies ,gold is on the knife edge of rocketing to new highs imho $1200+ before the yrs out.

[dragonz]

It might even be a good day to go for your liferafts, folks. The beartrap is unwinding fast.
In fact bargain hunting might have to wait till next week, to see how far this fallout is going to last.

I'm glad I am now 70% cashed up , can I take advantage of this carnage :confused:




MARKET DATA - 20:21 UK (http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/overview/default.stm)

FTSE 100 (http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/stockmarket/3/default.stm)4345.47down
-122.94-2.75%Dax (http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/stockmarket/18/default.stm)4900.67down
-138.27-2.74%Cac 40 (http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/stockmarket/1/default.stm)3217.41down
-85.96-2.60%Dow Jones (http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/stockmarket/2/default.stm)8250.16down
-171.88-2.04%Nasdaq (http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/stockmarket/12122/default.stm)1685.32down
-42.52-2.46%BBC Global 30 (http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/stockmarket/29954/default.stm)4637.01down
-111.16-2.34%

Nah, no need to panic. Good time to buy if All Ords fall around 3700ish.

Now if it should fall to say 3600ish then thats a differant story and time to be cautious.

Its days like these that the novices pay the wages of the pro's. :D

[soulman]

You sound like a poker player there Dragonz on your last sentence.

[AMR]

Real movers have been the currencies, NZD and AUD breaking to new highs while the equity markets languish. Even the GBP has done nicely.

I have been a bit surprised at this, traditional they follow hand in hand through a bear market, could it be that the USD is now considered risky?

[STRAT]

Real movers have been the currencies, NZD and AUD breaking to new highs while the equity markets languish. Even the GBP has done nicely.

I have been a bit surprised at this, traditional they follow hand in hand through a bear market, could it be that the USD is now considered risky?I know bugger all about FOREX but I would have thought about as risky as a sub prime mortgage and has been for some time. I dont understand all the the influencing factors but from a laymans perspective I for the life of me cannot understand what has kept the US dollar up for so long. Surely it cant be worth more than about 3c NZ? :D

[digger]

I know bugger all about FOREX but I would have thought about as risky as a sub prime mortgage and has been for some time. I dont understand all the the influencing factors but from a laymans perspective I for the life of me cannot understand what has kept the US dollar up for so long. Surely it cant be worth more than about 3c NZ? :D

Hey lets get back to reality. NZ is one of the few so called developed countries that is more debt laden than the US,so why would 3 cents NZ buy one US dollar. Both countries have run up hugh debts so currency is about right relatively,meaning both are somewhat stuffed.Probably both get taken out by the thrifty Chinese.

[STRAT]

Hey lets get back to reality. NZ is one of the few so called developed countries that is more debt laden than the US,so why would 3 cents NZ buy one US dollar. Both countries have run up hugh debts so currency is about right relatively,meaning both are somewhat stuffed.Probably both get taken out by the thrifty Chinese.No dispute Digger. I was being a smart arse hence the :D at the end of the last line

[STRAT]

The DOW is at an important juncture ( I use thie DOW as an indicator for the ASX. Dont actually buy US stocks )
Many sell signals but OBV isnt one of them.

Phaedrus, am I reading this right? Since the 15th of May ODV has risen while other indicators have shown a brief improvement then continued to decline.

[Phaedrus]

The DOW is at an important juncture.No argument there!


Many sell signals but OBV isnt one of them. Since the 15th of May OBV has risen while other indicators have shown a brief improvement then continued to decline.(1) In my opinion, volume based indicators mean little when applied to any composite "price" such as an Index. I wouldn't use OBV at all here.

(2) You really need to be looking at the daily OBV if you want to relate it to a daily Dow. The use of an OBV viewed using a different periodicity can lead to all sorts of anomalies.

(3) The OBV could be viewed as rising, flat or falling, depending on the time period you select. Since 8th of May, the OBV has been essentially flat, as has the Dow.


I use the DOW as an indicator for the ASX.Well Strat, I don't. Briefly, my reasons are as follows :-
(1) The ASX does not invariably follow the Dow. These 2 markets diverge quite often.
(2) Whatever effect the Dow does have on the ASX is already built in to the AllOrds or indeed any other index.
(3) This information gives you no edge at all - everyone in the world has access to it before the Aus market even opens.

This topic has been exhaustively discussed in the "When to re-enter the Market" thread. I summed up my argument here, (http://www.sharetrader.co.nz/showthread.php?p=195861) but pages 10 - 11 - 12 contain more detailed discussion.

[Dr_Who]

So the conclusion is to best stay on the sideline until there is trend?

[Phaedrus]

So the conclusion is to best stay on the sideline until there is trend?Not necessarily, Doc. Here is the situation as I see it. I know that Australian indices already incorporate all Dow influence (indeed, ALL influences) so I am quite happy to judge the Australian market as a whole by the AllOrds alone. I observe that :-
(1) The market is in an uptrend.
(2) The uptrend has run for 80 days, so far.
(3) The uptrend is losing momentum.
(4) A break above 3920 would re-confirm the uptrend.
(5) A break below 3710 would end the uptrend and confirm a downtrend.

My conclusions :-
(1) It is not impossible that this remarkably profitable uptrend might be ending.
(2) Individual stocks held should therefore be very closely monitored.
(3) In general, right now is probably not a good time to be buying.
(4) This is a time for a degree of caution. A time to wait and see whether the coming break will be up or down.
(5) I'm not pessimistic. Not optimistic. Not Bullish. Not Bearish.
(6) Bear rally, Fool's rally, Bottom, Bear trap, Bull rally, I don't give a toss what anyone choses to call this uptrend - or how they choose to categorise it. As Shakespeare put it “What’s in a name? That which we call a rose, by any other word would smell as sweet.”

[STRAT]

No argument there!

(1) In my opinion, volume based indicators mean little when applied to any composite "price" such as an Index. I wouldn't use OBV at all here.

(2) You really need to be looking at the daily OBV if you want to relate it to a daily Dow. The use of an OBV viewed using a different periodicity can lead to all sorts of anomalies.

(3) The OBV could be viewed as rising, flat or falling, depending on the time period you select. Since 8th of May, the OBV has been essentially flat, as has the Dow.

Well Strat, I don't. Briefly, my reasons are as follows :-
(1) The ASX does not invariably follow the Dow. These 2 markets diverge quite often.
(2) Whatever effect the Dow does have on the ASX is already built in to the AllOrds or indeed any other index.
(3) This information gives you no edge at all - everyone in the world has access to it before the Aus market even opens.

This topic has been exhaustively discussed in the "When to re-enter the Market" thread. I summed up my argument here, (http://www.sharetrader.co.nz/showthread.php?p=195861) but pages 10 - 11 - 12 contain more detailed discussion.Thanks for that Phaedrus. I will take it all on board.

[tricha]

So the conclusion is to best stay on the sideline until there is trend?

Conclusion from a few charts like the p/e ratio's and earning look rather grim, to say the least.:(


If you are long the broad US stockmarket - Prepare To Get Buried
By Clive Maund http://www.kitco.com/images/commmentary/bio.gif (javascript:biowindow('bio.html','BIO','top=50,lef t=200,width=575,height=420,scrollbars=1')) http://www.kitco.com/images/mailicon.gif (clivemaund@gmail.com) http://www.kitco.com/images/printicon.gif (http://www.kitco.com/ind/maund/printerfriendly/may252009.html) http://s7.addthis.com/static/btn/lg-addthis-en.gif (http://www.addthis.com/bookmark.php?v=20)
May 25 2009 10:58AM
http://www.kitco.com/images/commmentary/share/bg_trans.gifwww.clivemaund.com (http://www.clivemaund.com/)

Fundamentally the rally in the broad stockmarket from early in March is viewed as being the result of a combination of media hype, wishful thinking and short covering, but there may be more to it than that - it would appear that a sizeable proportion of the TARP (Troubled Asset Relief Program) funds not thus far deployed have been used to drive up the stockmarkets in order to create a positive environment for the banks to issue secondary shares and thus raise equity. While this is perfectly understandable, it also means that once the banks have finished selling this stock to the public, or the market is simply exhausted by being soaked in this way, it is likely to go into reverse in a big way.
Technically, the rally in the broad stockmarket looks to be over and there are several important reasons to conclude that this is the case. On the 1-year chart for the S&P500 index we can see that despite the impressive gains, all the market has managed to do is rally from an extremely oversold position to approach its falling 200-day moving average, and so there is no reason thus far to consider that it is anything other than a typical bearmarket rally, albeit a big one. The rally stalled out a couple of weeks ago in the important zone of resistance shown and the index has since been retreating beneath the 200-day moving average, and late last week it started to break down from the uptrend in force from mid-March, a bearish development.

http://www.kitco.com/ind/Maund/images/may252009_1.gif
On the 6-month chart we can examine recent action in more detail. On this chart we can see that the breakdown from the uptrend occurred on Thursday, although thus far the break is not big enough to be conclusive, so we could yet see a short-term rally back towards the 920 area, especially as the fast stochastic (not shown) has dropped back to provide the leeway for such a move. However, the trendline break still has bearish implications that are definitely amplified by the growing preponderance of downside volume over the past couple of weeks, as shown by the red volume bars at the bottom of the chart, which has led to the first significant drop in the On-balance Volume line since the uptrend started, another negative sign. In addition a bearish "shooting star" candlestick appeared on Wednesday, when the market attempted to the challenge the early May highs and failed, dropping back to close near the day's low. A top area appears to be forming between the rising 50-day and falling 200-day moving averages, which are rapidly converging. This top area is bounded by the resistance shown and a support level which has become evident in the 880 area, breakdown below which would likely trigger a steep decline.
http://www.kitco.com/ind/Maund/images/may252009_2.gif
The abnormal and surreal nature of the recent rally is made starkly clear by the small charts below, prepared by www.chartoftheday.com. Both of these charts go way back to the 1930's and the first of them shows the extraordinary collapse in earnings of the S&P500 companies. The second of them shows that the resulting overall P/E ratio has risen into the stratosphere. These charts are most interesting as they demonstrate that earnings no longer matter to investors - all it takes to make the market go up these days is hope, TV commentators talking the market up - and a big dollop of TARP money. This is what is commonly known as a disconnect from reality. One thing is for sure - you don't want to be around when the market suddenly realizes that Barack Obama is not going to be able to wave a magic wand and make everything right, even with the benefit of creating trillions of dollars out of thin air to bid everything up. All this manufactured money had better create a recovery soon or the market is likely to implode. However, recovery is unlikely for, as we know, the banks are jealously hoarding their government granted largesse, and even if they made the funds available to the wider world, companies and individuals are so lamed by debt and fearful that they are in no mood to borrow, no matter how low the interest rate. So let's put 2 and 2 together - the stockmarket rallies hugely to discount recovery, but the recovery never materialises. Well, what a shame - it's an awful long way down from here.

http://www.kitco.com/ind/Maund/images/may252009_3.gif
http://www.kitco.com/ind/Maund/images/may252009_4.gif
Some market observers have been making comments in the recent past to the effect that leveraged ETFs are a scam designed to sluice money from retail investors into the pockets of professionals. While we would concur with this it shouldn't really be surprising, as to the extent that they are a scam they are simply following the rich tradition of many Wall St financial instruments, and compared to sub-prime mortgages, for example, they are a "mom and pop" operation as many European banks and financial institutions still smarting from immense losses will attest. This is not to say that you can't make good money out of them at times - in the same way that an experienced gambler may enter a casino in Las Vegas with a fair chance of coming out richer, but knowing that whatever his fortunes, the house will always win. Right now there are some bear ETFs which have been driven down almost to zero by the big market rally that look set to do really well if the market heads south soon as expected, even taking into account the eroding time value of option elements comprising them and the suspected tendency of the management of these funds to use them as ATMs.
On www.clivemaund.com we will be looking very soon at the associated effect on the dollar and the Treasury market of a reversal in the broad market and also at the likely impact of all this on prices of Precious Metals and oil and on resource stocks.
We called the big rally in copper (http://www.clivemaund.com/article.php?art_id=1879) back in February before it began, and called the big rally in oil (http://www.clivemaund.com/article.php?art_id=69) almost at its inception, and then more recently for copper to enter a trading range and oil to continue higher (http://www.clivemaund.com/article.php?art_id=1936), which is what happened, and finally called the latest rally in gold (http://www.clivemaund.com/article.php?art_id=68)and silver (http://www.clivemaund.com/article.php?art_id=67), although they were expected to perform better than they have on the recent dollar weakness. A big issue that we will address soon is whether gold and silver can break out shortly to new highs or whether they will get caught up in another downwave of deleveraging.
Clive Maund
clivemaund@gmail.com (clivemaund@gmail.com)

[STRAT]

Whats this Tricha? Copy and paste TA :D

I thought you gave no credence to Cloud watching.

By the way DOW up 3% right now and Transport up 4%

Phaedrus. I couldnt help but notice the author of Trichas Cloud Picture has used OBV for a composite :eek:

[Lego_Man]

Reading Marty Zweig's book last night and i was struck by his interesting comments re: markets turning.

By definition the first run of a new bull market is assumed by everyone to be a bear market rally. Everyone wants to wait for the "inevitable" pullback to buy, but any subsequent weakness is counteracted by those who missed the first rally buying in to ensure they dont miss out again. Then you have a second run.

In short, this could be "it".

Maybe it's the time to get all your coin in, set your stops nice and tight, and hang on for the ride?

[Phaedrus]

Phaedrus. I couldnt help but notice the author of Trichas Cloud Picture has used OBV for a composite.I saw that - but let's look at the signals it generated. Looking at the 1 year chart first, up to October, the OBV was rising while the SPX was falling. This is a Bullish Divergence. What happened? The SPX plunged.
Looking at the 6 month chart from the start of 2009 onward, the SPX was falling while the OBV was rising. Another Bullish Divergence. What happened? The SPX plunged. Now, I'm not saying that running an OBV oscillator on an Index is totally worthless, it's just that any signals it generates should be interpreted with caution.
Most all of the "studies" that purport to prove that TA "doesn't work" are based on Indices. Pretty much all of the studies that prove TA does work are based on Stocks. The message here is very clear. Indicators that work well for stocks are much less reliable when applied to Indices. In my experience, this applies particularly to volume based indicators. Each to his own though eh? I could make quite a long list of commonly used indicators and techniques that I never use!


Whats this Tricha? Copy and paste TA? I thought you gave no credence to Cloud watching!Strat, Tricha quite likes TA - so long as it agrees with his/her opinions. Post a chart that presents a contrary view, though, and he/she gets very, very angry! It is only in these circumstances that Tricha classifies TA as "cloud watching and tea cup leaves reading".

[Hoop]

Tricia... who are the lambs??
Those in the market or those out of the market and finding it hard to get in??
I sometimes question the agenda of some of these Commentators.

With this post I will assume that there are no secret hidden agenda's such as... Damn!! I missed getting in so I will scarce monger on this present weakness to push the prices down so I can enter.

Yeah..I believe at this stage of the cycle where the question is being asked ....is it still a bear cycle?.... you will get a split with some say yes and use their biases to present their case and others say no and use their biases to present their case ..this is completely normal and under DOW Theory this psychological behaviour is a signal in itself that a cycle change is taking place.....

Now back to Tricha #298 ..one can just accept it as totally true or if you get the feeling as I do that this Clive Maund is a bear supporter come hell or high water (as is Tricha) I would do my own homework to check out his article and see if one can highlight the biases from it.

Now as a balance.... DISC:(I confess that I have a bias that I think the bottom has been reached and we are in recovery mode...so I'm optimistic for the medium term...long term a year out ????who knows???? I tend to be more pessimistic, but hey that's my bias).

The charts

http://i458.photobucket.com/albums/qq306/Hoop_1/SPmay252009_2.gif

From my drawing channel (automatic channel created by my Incredible charts program) purple lines I don't see a downward break confirmed with the 910 close this morning see X on chart. The bias here is where you start the lines to support your argument or bias..I started drawing a couple of sessions earlier than Clive.
The OBV you have seen Phaedrus views on this...but for those "OBV on index worshippers", I have drawn a resistance/support line ...notice how the R/S line effects the OBV movement...are we witnessing a bounce off that support (R/S) line this morning??


Now this Earnings chart is OK

but... the PE chart ....its total BS!!!.. the latest data added to the Shiller PE Ratio chart (shown in post #298) is not consistent with the analysis used from the past years plots of the chart...... the latest data is false and not normalised.
At the end of the 1st quarter 2009 Shiller has normalised PE ratio of 14 and Crestmont has it at 16
For the understanding of PE Ratios correctly see here at Crestmont Research (http://www.crestmontresearch.com/pdfs/Stock%20PE%20Report.pdf)

I hope this post is useful.

[Lego_Man]

Yeah, i thought that PE thing was bull**** too. Still, the 14-16 measure still leaves a bit of room to fall...

[STRAT]

Maybe it's the time to get all your coin in, set your stops nice and tight, and hang on for the ride?I dont know about that Lego man ( be cautious ). The key is/was to already be in and now with a good profit on the books have room to let the market well and truely turn if thats what it is going to do while still being able to get out well ahead IMO. I would be not inclined to jump in boots and all right now when it could so easily go either way.
At the end of the day each stock will do its own thing too. Overall market sentiment is only part of the picture.

[STRAT]

I saw that - but let's look at the signals it generated. Looking at the 1 year chart first, up to October, the OBV was rising while the SPX was falling. This is a Bullish Divergence. What happened? The SPX plunged.
Looking at the 6 month chart from the start of 2009 onward, the SPX was falling while the OBV was rising. Another Bullish Divergence. What happened? The SPX plunged. .Yup I did see that and it did two things for me. It reconfirmed your previous post to me and I no longer use OBV for the DOW or the ASX. Secondly it shed doubt on the the quality of analisis of the whole post.

[tricha]

Whats this Tricha? Copy and paste TA :D

I thought you gave no credence to Cloud watching.

By the way DOW up 3% right now and Transport up 4%

Phaedrus. I couldnt help but notice the author of Trichas Cloud Picture has used OBV for a composite :eek:

Hmm spent the whole night watching the DOW, did we.:D

What does the big picture tell, a sad story.:(


http://www.kitco.com/ind/Maund/images/may252009_3.gif
http://www.kitco.com/ind/Maund/images/may252009_4.gif

[STRAT]

Hmm spent the whole night watching the DOW, did we.:D


Haha,
no mate, out of hours contract and its really doing me in. These bags under my eyes are starting to look like suitcases

[bermuda]

Haha,
no mate, out of hours contract and its really doing me in. These bags under my eyes are starting to look like suitcases

Hi Strat,
Retire and put yourself in front of a computer that keeps you up to date with CSG.

That is my advice. Do it tomorrow. You won't regret it. If you don't, you will.

Print this off and put it on the back of your front door.

Cheers.

[Hoop]

Hmm spent the whole night watching the DOW, did we.:D

What does the big picture tell, a sad story.:(


http://www.kitco.com/ind/Maund/images/may252009_3.gif
http://www.kitco.com/ind/Maund/images/may252009_4.gif


Quote: What does the big picture tell, a sad story.:(
Yes Tricia a sad story, that chartoftheday.com (http://www.chartoftheday.com) produces an erroneous S&P 500 Normalised PE Ratio chart and you post it not once but twice

For the benefit of others...Tricia has republished the Shiller S&P 500PE Ratio chart which is of normalised PE Ratios** You can't just plonk a "at this moment" PE Ratio figure in it as chartoftheday have done..it doesn't work like that..

..chartoftheday should have know better...a shoddy piece of work.

At the end of the 1st quarter 2009 Shiller has a normalised PE ratio of 14 and Crestmont has it at 16 NOT 125!!!!

**For the understanding of Normalised PE Ratios obtained in the above Shiller S&P500 PE Ratio chart see here at Crestmont Research (http://www.crestmontresearch.com/pdfs/Stock%20PE%20Report.pdf)

A Note of Interest:...Shiller normalised PE Ratio is the excepted guide to determine the distance of Secular cycles

[tricha]

Quote: What does the big picture tell, a sad story.:(
Yes Tricia a sad story, that chartoftheday.com (http://www.chartoftheday.com) produces an erroneous S&P 500 Normalised PE Ratio chart and you post it not once but twice

For the benefit of others...Tricia has republished the Shiller S&P 500PE Ratio chart which is of normalised PE Ratios** You can't just plonk a "at this moment" PE Ratio figure in it as chartoftheday have done..it doesn't work like that..

..chartoftheday should have know better...a shoddy piece of work.

At the end of the 1st quarter 2009 Shiller has a normalised PE ratio of 14 and Crestmont has it at 16 NOT 125!!!!

**For the understanding of Normalised PE Ratios obtained in the above Shiller S&P500 PE Ratio chart see here at Crestmont Research (http://www.crestmontresearch.com/pdfs/Stock%20PE%20Report.pdf)

A Note of Interest:...Shiller normalised PE Ratio is the excepted guide to determine the distance of Secular cycles

Thanks for the enlightening Hoop, this is one educational item you have put before us and the conclusion makes very interesting reading.


CONCLUSION

Although today’s P/E is below 15, the stock market remains in secular bear market
territory—yet relatively undervalued under the expectation of a relatively low inflation and
interest rate environment. It is historically consistent for secular bear markets to present
shorter-term periods of strong returns (cyclical bull markets) followed by periods of market
declines (cyclical bear markets).
The only way to reposition into a secular bull market is to experience a decline in the stock
market relative to the growth in earnings due to significant inflation or deflation. This can
occur either by a significant decline over a short period of time (e.g. the early 1930s
Page 12 of 17
secular bear market) or by minimal decline over a longer period of time (e.g. the 1960s-
1970s secular bear market).
This report assesses the current valuation level in the context of the longer-term market
environment. The goal is to help investors and market spectators to assess more quickly
the current conditions. For the full year 2008, the annual P/E (based upon the average
index across the year) is 20. That is significantly higher than the normalized P/E using
only the year-end index. Annual values are used for longer-term secular market analysis;
the current normalized P/E is more relevant for investors’ shorter-term analysis. If the
market stayed at current levels for the rest of the year, the annual P/E for 2009 would
reflect the current value near 13. Thus, the ‘current’ look at the market (i.e. relatively
undervalued) is a reasonable assessment of the valuation level available to investors
today, even if the annual values do not yet reflect the significant declines.
In this environment, as described in chapter 10 of Unexpected Returns, investors should
take a more active “rowing” approach (i.e. diversified, actively managed investment
portfolio) rather than the secular bull market “sailing” approach (i.e. passive, buy-and-hold
investment portfolio over-weighted in stocks).

Ed Easterling is the author of Unexpected Returns: Understanding Secular Stock Market Cycles,
President of an investment management and research firm, and a Senior Fellow with the
Alternative Investment Center at SMU’s Cox School of Business where he previously served on the
adjunct faculty and taught the course on alternative investments and hedge funds for MBA
students. Mr. Easterling publishes provocative research on the financial markets at
www.CrestmontResearch.com.


Now this piece of work, I suppose it is shoody as well, especially when it is a few years behind the big picture.
Can anyone enlighten us on where this is at the moment.


http://www.resourceinvestor.com/News/2009/5/PublishingImages/20090526chart.jpg

[tricha]

WELL I had to go to the pub and buy a bottle of port to chill out and read indepth, Hoops Crestmont Research (http://www.crestmontresearch.com/pdfs/Stock%20PE%20Report.pdf), .



Aberration

Aberration is our first scenario. Numerous economists were consulted and various data
were evaluated—there do not appear to be generally-recognized reasons that explain the
sudden shift in real economic growth during the current decade to near two-thirds of both
the historical average and prior three decades. The most reasonable explanation is that
the decade of 2000 includes two recessions that coincidentally bookend the period. A
graphical review (Figure B1) of economic growth history using 5, 10, and 15-year rolling
periods (through the estimated trough of 2009) reflects a common pattern. Thus, the
decade of 2000-2009 could be a statistical anomaly.
Trend

Trend is our second scenario. Trends don’t require an explanation to be valid…maybe the
reason will be known some day in the future. What are the implications IF 2% is the new
trend growth rate?
Stocks are simply financial instruments—a payment today for the right to future cash flows.
It sounds hard and cold, yet that’s it. We invest in financial instruments to get a return.
The level of return is determined based upon market rates (driven by expected inflation)
and the probability of losses. For this discussion, let’s eliminate the impact of a change in
inflation and the probability of losses…so it only leaves the future cash flows. For stocks,
the future cash flow stream (over the longer-term) is driven by economic growth.
Therefore, if economic growth slows, the future cash flows (i.e. dividends from earnings)
from stocks also are reduced.
So to get the same level of investment return, an investor must pay a lower initial price for
the reduced cash flows to produce the same expected return. What? …to get similar
returns, an investor must pay less if there are lower cash flows to make the same return?
Yes. The impact on stock market valuations—if we have down-shifted to 2% real
economic growth—is a drop in the average P/E of about 6 points. As a result, the average
would decline below 10 rather than the historical 15 (assuming a repeat of historical
inflation cycles). The natural peak during periods of low inflation would be below 20 rather
than near the mid-20s.
Few economists, financial analysts, nor this author conclude that this has occurred, yet
with the uncertainty of the expected future real economic growth rate, this issue should be
better understood.
Reversion

Reversion is our third and final scenario. Hope springs eternal…
Maybe the long-term trend is not lost. This scenario assumes that the factors of economic
growth will continue at nearly the same rate: working population growth may not decline
Page 17 of 17
due to delayed baby boomer retirements and productivity won’t show a proclivity to fall. As
a result, we may be due for a surge in economic growth (typical of post-recession periods)
that restores the long term average to average. That would portend a period (maybe a full
decade) when quite a few years deliver real economic growth that exceeds the historical
average 3% rate (maybe 4%, to restore the long-term average to the average).
CONCLUSION
Has the decade of the 2000s been an aberration…thus the long-term trend growth rate
(and next decade’s growth rate) for the economy will return to 3%? The implication for P/E
is an average near 15 and peak near 25…
Has the economic growth rate down-shifted to near 2%...thus the long-term trend growth
rate for the economy would be significantly below 3%? The implication for P/E is an
average below 10 and peak below 20…
Is the decade of the 2000s a coincidental period with two recessions…positioning for an
upcoming period for above-average growth that restores the long-term average to
average? Since the long-term growth rate of 3% would remain intact, P/E should average
15 and peak near 25, yet the psychological impact on the market of such rapid growth
could drive a near-term overshooting of the fair value level…

[Hoop]

I 'm impressed Tricia.....good on ya, mate.:)
Crestmont research articles are mind benders, your'e right... you need a bottle of something to unbend your mind back to normal....gee, wished I thought of that.:(

[STRAT]

WELL I had to go to the pub and buy a bottle of port to chill out and read indepth, Hoops Crestmont Research (http://www.crestmontresearch.com/pdfs/Stock%20PE%20Report.pdf), .


and a perfect choice of mind numbing substances I must say Tricha. Port would have been the poison I would have chosen too.;)

Im a little concerned though :eek:

With the world poised at the crossroads of Armageddon yet again why is your cellar empty? I would have thought there would be many cases of fine port stock piled in there.:D

[STRAT]

Hi Strat,
Retire and put yourself in front of a computer that keeps you up to date with CSG.

That is my advice. Do it tomorrow. You won't regret it. If you don't, you will.

Print this off and put it on the back of your front door.

Cheers.Haha,
Not rich enough to retire Im afraid but I have taken your advice in part and to heart Bermuda. Your post is hanging on the only door I face long enough to read it on a regular basis.

Its on back of the Loo door ;)

[The Big Ease]

The DJI continues to amaze.
Smashed through 8500 and at 8700 as I type (2.41% for the day).

Anyone take a look at the Coppock Indicator? Apologies if this has already been mentioned here, but I did a search for it online and it has given a buy. Apparently a very solid indicator for picking market bottoms.

Not without fault, but have read about it being something like 90% plus accurate since the 1950's across multiple markets.

There are so many leading indicators pointing to a recovery. Are they ALL wrong?

[STRAT]

The DJI continues to amaze.
Smashed through 8500 and at 8700 as I type (2.41% for the day).

Anyone take a look at the Coppock Indicator? Apologies if this has already been mentioned here, but I did a search for it online and it has given a buy. Apparently a very solid indicator for picking market bottoms.

Not without fault, but have read about it being something like 90% plus accurate since the 1950's across multiple markets.

There are so many leading indicators pointing to a recovery. Are they ALL wrong?You dont sleep either eh TBE? :D and neither does mark100 or Drillfix by the look of things

Transport has been particularly strong last few days which is sometimes/often the first DOW to move too.

A few positive indicators have been firing over the last few days. Looks like we are breaking out of the trading range we have been in

[The Big Ease]

Melbourne boy in London Strat :)
EDIT: this is really quite extraordinary upwards momentum. 2.9% up and still going.
Whatever you want to call this, it has legs for a little while yet.

[trackers]

Wow, I agree...Did not think the DOW would have another good day today...! Up 2.74%, GM filing for bankruptcy...its alll good.


Still think the music is going to stop soon though :)

[ratkin]

Looks promising , economic green shoots seem to be turning up everywhere, the rally may of begun as pure relief however it is now being bolstered by better news from the economy.

When many so called sensible people are declaring that buy and hold is dead , you know its a golden time to buy.
Much of the stuff i bought or topped up during the dark days of february /march are now showing very healthy gains.
For example acrux which i originally bought at 1.00 and held through the storm due to its strong fundamentals, topping up more at 40c (much to the horror of never average down traders ) has now tripled in price within the space of a month .

Anybody who was brave during the worst months was able to pick up real quality solid stocks at prices which in a few years time will be percieved as ridiculously cheap.
ie TEL TWR NZO QBE etc etc etc

[Dr_Who]

BULL MARKET.

If you are not in you will miss out!

[mark100]

You dont sleep either eh TBE? :D and neither does mark100 or Drillfix by the look of things



Living in Edinburgh at moment Strat. So yeah my sleeping habits are a bit strange but should be back to normal in a few months

[winner69]

ASX200 to hit 4,000 tomorrow .... that will make everybody believe that everything is over .... and then onwards and upwards to 5,000 by Xmas

Recessions get rid of the weak and now GM has gone most will think that the recession has done its job .... and the green shoots will soon be cornfield or whatever they are shoots of.

Could be a different story if Holden go broke but the head honcho has said no worries

[winner69]

and the RBA holding rates at 3% is a good sign ... even though a cut would have helped exporters

[POSSUM THE CAT]

Winner69 Tell me how another rebadged Daewoo is going to save Holden. The second hand car market is flooded with VIVAs nobody wants so why is another one from same source going to do a hell of a lot better. Their rebadged Susukis and Isuzu's were a lot better than these new ones.

[ratkin]

Winner being positive :eek::eek::eek::eek::eek::eek::eek::eek::eek::eek: :eek::eek::eek::eek::eek::eek::eek:

The worst really must be over :)

[STRAT]

Winner69 Tell me how another rebadged Daewoo is going to save Holden. The second hand car market is flooded with VIVAs nobody wants so why is another one from same source going to do a hell of a lot better. Their rebadged Susukis and Isuzu's were a lot better than these new ones.Acually the early Isuzus were crap too :D

[Dr_Who]

Even Toyota, Nissan and Honda is finding it tough. The Jap car co are not paying divi this year.

[STRAT]

Winner being positive :eek::eek::eek::eek::eek::eek::eek::eek::eek::eek: :eek::eek::eek::eek::eek::eek::eek:

The worst really must be over :)Ratkin the evidence is conclusive

Its a bottom

[drillfix]

Ratkin the evidence is conclusive

Its a bottom

LOL, good one STRAT :D

[ratkin]

lol took me a few seconds to get that one

[tricha]

l

Paul B. Farrell
http://i.mktw.net/_newsimages/columnists/farrell_paul.jpg Jun 2, 2009, 12:01 a.m. EST
10 reasons Terminators destroy 'Twitter-brains'

Hypnotized, you'll forget dot-coms, subprimes, the next Great Depression


View all Paul B. Farrell › (http://www.marketwatch.com/search?query=Paul B. Farrell&mode=Keyword)
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Alert (http://www.marketwatch.com/tools/alerts/newsColumn.asp?selectedType=3&column=Paul B. Farrell) Email (http://www.marketwatch.com/news/story_email.asp?guid={D239B4F7-3F26-4B56-B26C-5D8FB54361A7}&dist=emailMidSection) Print (http://www.marketwatch.com/story/story/print?guid=D239B4F7-3F26-4B56-B26C-5D8FB54361A7) By Paul B. Farrell (PaulBFarrell@charter.net), MarketWatch
ARROYO GRANDE, Calif. (MarketWatch) -- In the next "Terminator" sequel, Skynet will "send back" a new, more dangerous "Terminator," not another titanium killing machine but "Twitter Code." And after that, the "Tweet Code" will further limit communications between humanoids, from 140 words to 17 syllables, the length of a Zen koan but without the wisdom.
Two more Skynet weapons further controlling us, destroying our humanity.
Film Clip: "Terminator Salvation"

View a scene from "Terminator Salvation," starring Christian Bale. Courtesy Warner Bros. Pictures.

Why Twitter, why Tweet? Because both reflect a disturbing trend, the rapidly decreasing attention span and intelligence of the human brain. It's no match for Wall Street's version of the "Terminator's" Skynet that is rapidly expanding it's dominance over the public.
Seriously, Wall Street's Skynet has access to massive data bases on the behavior patterns of all humanoids: Transactions on securities, credit cards, loans, taxes, telephone calls, internet, and soon, all medical records, plus a financial innovation arsenal of quant algorithms and the K-Street network of 42,000 lobbyists gives Wall Street Skynet control of government, and absolute control of investors and our so-called democracy.
Folks, this is too real to make up. Less than a year ago, Wall Street banks were insolvent, near bankruptcy. Then in a swift "disaster capitalism" maneuver by Henry Paulson, Wall Street's Trojan Horse in Washington, they raided our Treasury and the Fed, while our clueless reps in Congress stood by.
Eight short months later, Wall Street's back in "business as usual" with bigger salaries and bonuses, while taxpayers hold the bag for over $5 trillion in new debts, a record $546,668 per household reports USA Today.
Wall Street Skynet and its arsenal of Terminators

Forget the metaphor; Wall Street is the real Skynet. And the Twitter/Tweet Codes are just a few of their many nanobots -- financial-innovation Terminators -- infiltrating the investor's brain, dulling our long-term reasoning powers, replacing them with new short-term irrational neurotoxins that will block their capacity to detect the broader strategies of the Wall Street Skynet Conspiracy.
That coupled with a memory purge is preventing us from assembling the "Resistance," a rebellion against Wall Street's version of Skynet.
Wall Street is hypnotizing Main Street investors: That way we forget the past, embrace the illusions and are easier to manipulate. In a trance state, we'll be unable to resist them.
If you don't believe me, here are the 10 nanobots anaesthetizing your brain. They are inspired by one of America's greatest business writers, Stanley Bing, author of a few books in my library: "Crazy Bosses;" "Rome, Inc.;" "Sun Tzu Was a Sissy;" "100 Bull**** Jobs;" and "What Would Machiavelli Do? The End Justifies the Meanness."
Bing writes a Fortune column. His latest, "Lessons We'll Forget," tells me that Wall Street Skynet is operational: "The moment the human animal is comfortable again, it immediately begins the important task of forgetting everything painful that has happened to it."
The past two years were painful, like the Great Depression, yet the investor's attention span has become so short, we're forgetting the pain, even cheering Wall Street.
So here's Bing's intriguing message, adapted for investors who are Terminator fans. Your memory will be purged now as you read about Wall Street Skynet's strategy. And that purge is setting up Great Depression 2, Wall Street's third crash of this century:
1. You'll forget ... that economists misled us, and will again

Bing says "economics is a bunch of bushwa" -- that's nonsense, BS, hype: "Economists are obviously not only behind the curve ... they are in many cases the cause of it." The memory purge is in progress. We see it in the recent upsurge in the "Consumer Sentiment Index," an resurgence of exuberance that says the masses are ready to be misled again.

2. You'll forget ... new crooks are plotting to steal your money

Our brains are designed to deny and suppress bad experiences. Bing says: "Next time this all happens, people will once again be surprised that the guy who ran the exchange [Madoff was Nasdaq chairman] is the person who also managed the Ponzi scheme." And you've already forgotten that megacrook, former Treasury Secretary Hank Paulson. His Ponzi scheme was 15 times bigger than Bernie's, and Congress didn't indict him.
3. You'll forget ... that regulators are also political hacks in disguise

Bing words: "The law is an ass ... Virtually all of the regulators and legislators who were supposed to be monitoring the finance industry were certainly lawyers, as were the lawmakers who were asleep at the switch." The truth is the SEC, CFTC, all staff lawyers and their lobbyists are just more "politicians" gaming the law for their personal gain. Once the bull's back and you're making a few bucks (on paper), you'll forget all this.
4. You'll forget ... bankers are stupid, and will make stupid loans

Whether it's Rome, the Dutch Tulip Bulb Bubble, the Panic of 1837, or the dot-com insanity, "every panic in history has been precipitated by the same stupid sequence of events." Cash-rich bankers back too many greedy speculators, overextend, run out of cash. Banks go broke. Markets crash. Why do they never learn? Because bankers have a gene that makes them not only greedy but "stupid," says Bing. And "as soon as nobody is looking they'll do so again." Worse, bankers "forget" even faster than investors do.
5. You'll forget ... that America's run by a powerful wealthy elite

About eight million billionaires and millionaires run America. This small minority own and control about 90% of America's total wealth: "They're not smarter. They're not happier. They just know how the game is played and, for the most part, what to do to stay there. Sometimes everybody forgets that the whole thing is designed to keep the powerful in power and the rich in their McMansions." The other 300 million have no real power because America is not a democracy: "We'll forget that, of course, as soon as the markets simmer down."
6. You'll forget ... that the news is just another Wall Street 'Terminator'

Fewer newspapers, fewer reporters and "more blogspit" means "everything will only get worse" with the news, says Bing. "At the height of our troubles, the food chain [still] goes from security analyst and quote monkey straight to the wires and blogs and directly to you. And you read it and think whatever occupies your brain pan for the most recent five minutes." Then five minutes later, another relentless data dump of Wall Street's mind-numbing propaganda is crammed into our overloaded brains. We either forget, or go mad.
7. You'll forget ... your anger, and you'll let them get away with it

The subtitle of Bing's "What Would Machiavelli Do" -- The End Justifies the Meanness -- reflects the viciousness in today's public dialogue: Anger drives people to rebel, to join a revolution, the resistance, take responsibility, fight back. Instead, we'll wimp out, forget.
8. You'll forget ... nothing lasts forever (except Wall Street's hype)

Nothing? Remember the 2004 election when Reaganomics was hot? When Rove talked of a "permanent GOP majority?" Later when Bush had "a lot of political capital and planned to spend it?" When the Dow roared above 14,000? Obama's riding high now. Beware, Bing says: Nothing lasts, "not good times and not bad times either." Nothing.
9. You'll forget ... what's really important as soon as the bull roars

There more to life than stocks, the economy, your career and a retirement portfolio. And no matter what, Bing says, you'll eat breakfast today. Just don't forget it tastes better with loved ones. They will always help you forget everything else, if you haven't already.
10. You'll forget ... you can fight back, but the will is gone

Bing ends gently: "We just forgot all this stuff. Stuff? What stuff?" ... fade to black.
As investors forget the pain of the past couple years, our silence alone will crush the Main Street Resistance. At the peak of the dot-com insanity, on March 20, 2000, I posted a column: "Next Crash, sorry, you'll never hear it coming." Investors were deaf: Then again on March 24, 2004 we warned a second time. Same title. But Wall Street was deaf, let their disaster fester, adding fuel for the catastrophic credit meltdown in 2007.
Warning: A third disaster is festering. The worst is yet to come. Yale's Robert Shiller says: "We recently lived through two epidemics of excessive financial optimism. I believe we are close to a third episode, only this one will spread irrational pessimism and distrust -- not exuberance. If that happens, our economic problems will become much worse than they need to be, and our social problems will multiply."
Bing's "Lessons We'll Forget," is a perfect explanation of the coming third episode. And we have no will to fight back. The Great Depression 2 coming in 2011 is our destiny because 95 million investors are forgetting the lessons of prior "episodes" ... and will do nothing.
Now relax and listen to this soft peaceful hypnotic voice: "Yes, relax as I count backwards from 10 to 1. When we reach 1 you will wake up refreshed, optimistic. You will forget all the bad warnings from Bing, Shiller and Farrell about past and future disasters. Just stay in the eternally blissful 'Now.' Once awake, you will only remember this one fact: 'Wall Street is a trusted friend'... you won't forget that now ... will you?" :D

[Dr_Who]

I agree, history will repeat itself in no sooner than we think.

In the meantime, just go with the flow and enjoy the ride. Just remember to sober up before the music stops or you will get a huge hangover.

[drillfix]

Did anybody by any chance watch this:

http://player.sbs.com.au/programs#/programs_08/sneakpeektv/sneakpeektv/playlist/Million-Dollar-Traders/

Part one of a three part series

Not that I watch alot of TV but intersting nonetheless.

They will nearly lose as much money as me...:eek:

[ratkin]

Bears starting to sound desperate . Most would of expected the rally to end by now.

The green shoots keep sprouting .
Today much better US housing data than expected and better auto sales

[The Big Ease]

Alot better in fact.
Economists were tipping 0.5% increase and instead it was 6% plus.


From a stockmarket perspective things just get better.
Everybody has stopped talking about how bad things could get and have begun debating when growth will resume.

[Stranger_Danger]

I don't know if this is a bear market rally or the beginning of a new bull market. No one does.

What I *DO* know is that enough money is being pumped in - and enough people are becoming believers - that if this is just a bear market rally and we eventually go lower than the previous low, then we will get the grief, anger and genuine capitulation that one would expect after the bursting of a massive debt fuelled bubble.

I don't feel we've had that yet.

I've ridden this rally for good gains, and have continued buying. However, at all times I have continued to hold a high percentage in cash and am not falling in love with this market.

A bob each way for me. I'm not maximising my gains and if it turns to custard, I'll take some (hopefully small) losses. On the fence is fine with me.

[OutToLunch]

But for how long? The US Treasury bubble might be getting ready to pop. The link below is but one of many articles swilling around there warning of worse things to come. Hard to know what to make of it all but there is a growing sense that the US are starting to lose control of the bigger picture in the name of short term fixes using massive amounts of debt. I really do struggle to believe that things are really looking as rosy now as some want to believe, ("green shoots" and all that).

http://marketoracle.co.uk/Article10879.html

[Timo]

More food for thought.
http://seekingalpha.com/article/140856-telltale-signs-that-a-significant-correction-isn-t-imminent
Check out the comments.

[STRAT]

More food for thought.
http://seekingalpha.com/article/140856-telltale-signs-that-a-significant-correction-isn-t-imminent
Check out the comments.Alarming eh? but not surprising.

I see the DOW is falling over again tonight :rolleyes:

[Dr_Who]

More food for thought.
http://seekingalpha.com/article/140856-telltale-signs-that-a-significant-correction-isn-t-imminent
Check out the comments.


Ive noticed that the DOW seems to bounced up suddenly in the last 30 mins of closing. This has been happening in the last few months. hmmmm...

[macduffy]

Ive noticed that the DOW seems to bounced up suddenly in the last 30 mins of closing. This has been happening in the last few months. hmmmm...

Buying on the dips?

;)

[Lego_Man]

Well, if the US Government is really propping up the stockmarket, then we are in for the mother of all crashes.

Otherwise it's business as usual and no reason not to be fully invested.

Either way buy and hold is still dead, set your stops and hang on for the ride.

[Hoop]

Yeah...no real evidence to suggest US Government is proping up the Stockmarket..if they are they are doing a bad job...I personally believe this is a accusation from Wall St haters and others who are out to find their own "whipping boys" to blame for this dreadful recession on.



Interesting to note though that out of the major Global Stockmarket Indexes there are presently only 3 that aren't in a primary uptrend scenario

...DOW (needs to break above primary resistance of 9000) S&P500 (1000) and FTSE (4650) .



Latest to enter a primary uptrend have been ASX and DAX last week... I think it is only a matter of time before these 3 laggards join the rest of the World.

Most Stockmarkets in primary uptrends have inverted head & shoulder patterns... The NASDAQ a double bottom.

[tricha]

Well, if the US Government is really propping up the stockmarket, then we are in for the mother of all crashes.

Otherwise it's business as usual and no reason not to be fully invested.

Either way buy and hold is still dead, set your stops and hang on for the ride.

That's about it Lego_Man - set your stops and hang on for the ride. :eek:



Published Jun 4 2009 by Falls Church News-Press (http://www.fcnp.com/commentary/national/4579-the-peak-oil-crisis-watching-a-mega-crisis.html)
Archived Jun 5 2009
The peak oil crisis: watching a mega-crisis

by Tom Whipple
In the last few weeks there have been a number of developments that may provide an insight into the next few years - but first let's review.
We, in America, are deep in the midst of a four-sided crisis. The first side is an economic slump; second, surprisingly, is our government's panicky efforts to stabilize the situation; third, the imminent peaking of fossil fuels and numerous other resources that seems to be in abeyance for the moment; and fourth, global warming which in the long run could overshadow the other three by a wide margin and is attracting considerable amounts of government and Congressional attention.
The important point is that the four aspects of what could easily turn out to be the mega-crisis of the century are all interrelated. Developments in any of the four will cause perturbations for better or worse in the others.
Most believe our current economic problem was caused by the extension of too much credit, too freely, and to the wrong people, over the last 30-40 years. Some, however, are suspicious that the many-fold run-up in oil prices from their historic $10 or $20 a barrel that sopped up so much consumer purchasing power may have had more than a little to do with our current economic problems.
While the consequences of the economic downturn are well understood, we are just starting to appreciate that the massive governmental effort to keep a recession from turning into a depression is threatening unprecedented repercussions of its own. In the last 10 months, the U.S. government and its central bank have spent or issued guarantees approaching $12 trillion in efforts to boost the economy. During the current fiscal year, the US will sell $3.25 trillion in new securities vs. $892 billion worth last fiscal year. Some are already calling this phenomenon the "bailout bubble" and are worried that deficit financing on this scale could destroy the dollar and take much of the U.S. economy with it.
People who claim to understand such things continue to assure us that additional trillions in deficit financing will not be a problem and that anything is better than allowing our economy to slip into another great depression. Despite the government's best efforts, however, interest rates have begun to rise and last week took a rather substantial jump. This in turn could hamper a recovery in the housing market. The recent fall of the U.S. dollar is a companion signal that all is not well. Whether the falling dollar and the increase in interest rates will continue much longer is anybody's guess, but it won't take much more of a move before prospects for an early economic recovery are seriously harmed.
While many different natural resources - fossil fuels, minerals, fresh water - are in danger of running short within next few decades, oil production which probably has already passed its all-time peak looks like the best bet to interfere with, and eventually stymie, an economic recovery. Crude oil prices have doubled since the end of January and may go higher on expectations that an economic recovery is underway. While crude prices are still less than half the $147 a barrel they reached last July, it is getting close to the level where economic damage could be inflicted. While the demand for commercial fuels for trucks and jet planes is down, gasoline demand has not fallen much as prices have edged up.
While the interaction among the four major factors that will have much to do with our economic future - the recession, the bailout, peak oil, and global warming - is easy to understand, the timing and nature of all the possible interactions are difficult to comprehend. Oil supply and demand are relatively easy to track, but no one as yet seems to have a firm insight into whether, when, and how fast massive deficit spending is going to lead to serious trouble.
Any increase in demand from a revitalized economy is almost certain to drive oil prices higher. In the last eight months, OPEC has reduced its oil production by about three million b/d which has kept production closer to demand for the time being. Although a few members of OPEC currently have surplus production capacity that could be turned into increased production, every year we are extracting some 30 billion barrels of mostly easy and cheap-to-produce oil. The simple message is that in three to four years excess production capacity is likely to be eaten up by depletion. After that increased oil production will become very expensive and take considerable effort. Much higher prices and considerable economic damage are virtually certain.
To summarize our situation: If and when the U.S. and world economy rebounds significantly, the increased demand for oil will quickly lead to higher prices which in turn is likely to choke off the rebound; if the U.S. and world economy continues to contract, demand for oil and oil prices will fall for a while, but the economy will be approaching depression levels; if the massive deficit-financed bailouts lead to lack of interest in U.S. government securities and a weaker dollar, interest rates will soar and choke off economic growth; if the U.S. and other governments seriously clamp down on carbon emissions to control global warming, higher energy prices are likely. Our economy and future stand at a crossroad.
No one can claim to have much insight into the likelihood and timing of the many possible developments that could spring from our multi-sided crisis. The one thing we can be sure of, however, is that the four sides of our mega-crisis are inextricably connected. Any change, either for good or ill, sooner or later will cause changes in one or more of the others.
None of this bodes well for a return to life as we knew it only a few years ago.

[Dr_Who]

Buying on the dips?

;)

Indeed :).. this is a bull market and you have to ride it or you may regret it.

You are onto it McDuffy. I assume you are a pro and have been in the market for a very long time.

[The Big Ease]

...and another encouraging sign.
The increase in US unemployment for May was almost half the previous month's.

This rally has quite a way to go. It is pushing higher and the fundamentals ARE beginning to justify the renewed optimism, however cautious.

[tricha]

Actually I am still waiting for someone to do a comparision from the 1929 depression to now. The bear trap would make interesting charting comparisions do u not think ?
Remember we have had trillions of dollars pumped into the system and judgement day is just around the corner.:eek:


...and another encouraging sign.
The increase in US unemployment for May was almost half the previous month's.

This rally has quite a way to go. It is pushing higher and the fundamentals ARE beginning to justify the renewed optimism, however cautious.

ll

City Diaries: 4 June



http://newsimg.bbc.co.uk/media/images/45221000/jpg/_45221054_7ed0416b-5991-485e-a9fa-f946b05377b7.jpg

These diaries are written by people who work in finance and have had a front row seat as their industry goes through the biggest changes in decades.
They give us regular insiders' updates on the mood in the City of London and the dramatic changes in the world of finance.

STEPHEN
"Stephen" (not his real name) has worked in the City of London for over a decade.

http://newsimg.bbc.co.uk/media/images/45862000/jpg/_45862514_007392787-1.jpg Stephen says the threat of nuclear conflict registers barely a blip

Most traders close to the action are struggling to overcome their bafflement at what has unfolded since March. The market's eerie upsurge defies all rational explanations.
Earnings have been shredded, North Korea waves nuclear bombs at its neighbours, Pakistan threatens to implode and, closer to home, there are no obvious drivers for a new round of growth or job creation.
The news is awful, but nobody sells. The threat of nuclear conflict in the Korean peninsula registers barely a blip. But the market grinds higher, and nobody cares.
Most of what sounds like good news is merely speculation about "green shoots". Newspapers seize upon whispers that house-prices are "rebounding" and these whispers risk turning into beliefs. But why should house prices be rising and where is the money to pay those still-high prices going to come from?
Around 600,000 Americans have been losing their jobs each month since Obama was elected. And now nearly 10% of American mortgages are default. The proportions are equivalent, if not worse, here in the UK.
Traders look on, baffled by the news reports even more than by the rally. Who is coming up with these reports, where do they get their ideas from and which data give them hope that things are improving? Are they aware of the dangers of false hope?
Bond 'crash'

http://newsimg.bbc.co.uk/shared/img/o.gifhttp://newsimg.bbc.co.uk/nol/shared/img/v3/start_quote_rb.gif Those traders who still have jobs are happy to have them. In their determination not to make a wrong bet, nobody is taking on risk http://newsimg.bbc.co.uk/nol/shared/img/v3/end_quote_rb.gif


Which lender, whether in receipt of government funds or not, would believe in "green shoots" when faced with a looming threat that might make the subprime crisis look like the warm up?
Between 2004 to 2007, many home-owners apparently logged Mr Greenspan's endorsement of "financial innovation" and took out mortgages with exotic names such as Option ARM. Many such mortgages had five-year terms and these will expire in various waves in the next three years, requiring a replacement. The interest rates at which these will reset depends on the bond market.
Whilst not widely reported in the regular news, the bond markets had a mini crash in May. There's even talk of the ending of the multi-decade bull market - a market characterised by rising prices - in bonds.
The bond market dwarfs the stock market. It's also generally considered to be more boring. But this market determines the price of long-term credit. Crashing bonds mean higher mortgage rates just as millions of mortgages are going to reset.
The risk is this: millions of home-owners who are already financially stretched will be pushed to breaking point once their mortgage resets, triggering another spiral of defaults, repossessions, write-downs, implosions and lay-offs.
Despite this economic outlook, the stock markets in the last three months have agreed with the unstated assumptions in the whispers of "green shoots" - that growth is a prerogative of the modern era, that rebounds are always V-shaped and that central banks and politicians have abolished the business cycle that has plagued economic life since ancient times.
The rally we've seen is almost without peer in financial history. Day by day, week by week, the rally ground higher yet it displayed few of the qualities that generally mark the beginning of a new bull market, if any. It's been a low-quality bounce that slowly dismembered the bears but failed to create new bulls. Financial historians point to 1937 as a rough parallel but it's an inexact one and, despite one of the greatest stock market rallies ever, few traders came out on the right side of it.
The ways of this bear market (a market characterised by falling prices) mightier than almost any in living memory, are difficult and paradoxical.
Those traders who still have jobs are happy to have them. In their determination not to make a wrong bet, nobody is taking on risk. This basically undermines the point of employing them.
Even if we do not see another round of mortgage crises, it's rational to fear more closures and lay-offs in the financial sector, boding ill for London and the wider economy.

Read Stephen's previous entries (http://news.bbc.co.uk/2/hi/business/7748564.stm)


ANTHONY
Anthony (not his real name) works for an investment bank in the City.

http://newsimg.bbc.co.uk/media/images/45862000/jpg/_45862572_007430625-1.jpg The City focuses on tangible events like the collapse of GM, says Anthony

There is a book called The Black Swan by Nassim Taleb which discusses in some detail the impact of the highly improbable. 9/11 was a Black Swan event because nobody predicted it. The book's argument is that the impact of these random events will have a major effect on our lives.
It is these events that we should look out for. Trying to predict when we will emerge from recession is not important. In the end nobody knows least of all City forecasters.
Events in the world such as the underground nuclear test and firing of missiles by North Korea is a potential Black Swan event, but for some curious reason, the City have ignored it. Clearly, if North Korea moves from a test to a nuclear engagement then the Black Swan event would have occurred and the markets would literally fall off a cliff. But nobody seems that concerned about this in the financial markets.
Instead, the City prefers to focus on more tangible events such as the collapse of General Motors. This is something it understands and in economic terms, it is on par with the demise of Lehman Brothers. It was not a Black Swan event and was very predictable as the car industry has had excess capacity for many years.
The message in the City is that the car industry must contract and if workers in Luton suffer because the prospects for the Vauxhall brand are inferior to Opel in Germany, then so be it. It's a simple law of the market, but not one I share.
Unfortunately, I am just as bad as the other forecasters because it is events such as this which has made me argue in earlier diaries that talk about "green shoots" are premature.
I am an advocate of the double-dip recession - a so called "W" recovery, where there is a steep fall, followed by a steep recovery and then another fall before another recovery finally appears which becomes more sustained. I suppose my pessimism is because I know the City will always want to talk up a recovery and therefore take all this optimism with a pinch of salt. The reason for the optimism is simple. If there are more buyers, the City will make more money as volumes go up as punters become convinced that they cannot lose money on the markets.
But it seems that investors do not share that level of optimism. A study by Barclays Capital published this week reports that most investors are sceptical about this rally being sustainable. Investors are not interested in MP expenses. What they have noticed is rising bond yields reflecting market concerns about how governments will finance the huge debts that are being run up with toxic asset purchases and quantitative easing.

http://newsimg.bbc.co.uk/shared/img/o.gifhttp://newsimg.bbc.co.uk/nol/shared/img/v3/start_quote_rb.gif I am an advocate of the double dip recession - a so called 'W' recovery where there is a steep fall, followed by a steep recovery and then another fall before another recovery finally appears which becomes more sustained. http://newsimg.bbc.co.uk/nol/shared/img/v3/end_quote_rb.gif


And Gordon Brown has time to phone Simon Cowell to enquire whether Susan Boyle is OK. It seems that concerns about the economy are taking back stage. But I am afraid Rome is still burning.
My colleagues therefore remain cautiously optimistic if nobody else does. Alan Clarke, an economist at BNP Paribas says that an improvement is unsurprising. He says: 'We have had such a huge contraction that when the cogs start whirring again then by definition output has started to expand.'
My concern is that the "cogs will start whirring" in Asia and not in the US and European economies. We have to face up to the simple fact that there is a major shift underway in the balance of economic power from Western to Asian economies. "Go East, young man" is what the City really feels at the moment. And if there is money to be made, the City big hitters will be there.
If we regulate and tax these guys out of London, then "goodbye London, hello Shanghai" may not be a pipe dream. But if the Black Swan occurs in North Korea, then whatever I think is irrelevant.
I for one won't be going to Shanghai, but I am not a Master of the Universe. I don't care if Sterling is recovering. It is still cheaper to holiday in Barnstaple than Barcelona and there is one forecast I am optimistic about. As The Sun would say, "Phew. What a Scorcher!"
Read Anthony's previous entries (http://news.bbc.co.uk/2/hi/business/7988490.stm)

[ratkin]

Whats your agenda ?

[tricha]

Whats your agenda ?

I do not want to get Slam Dunked a second time Rankin. But I also do not want to miss the boat.

In the Great Depression there were "beartraps" and I suspect that the big rise in the US market is one and as you know what happens in the US Dow, is mirrored in the ASX.
Especially since the US have created out of thin air, trillions.
So r the trillions creating a false impression of a recovery ?

I was hoping someone that was a chartist could overlay a chart of the Great Depression and what has occured in the last two years, to see if there was a correlation.

[tricha]

The best I could do tonight, not up to date, but it is easy to get the general picture.:rolleyes:

http://www.smartmoney.com/Investing/Economy/Even-Worse-Than-the-Great-Depression/?page=2

http://m1.smartmoney.com/aheadofthecurve/images/0306-chart.gif

[The Big Ease]

I have been trapped into a 150% increase in my portfolio in 4 months.
Could you help me with this problem? ;)

You need to look forward. This rally is totally justified.
Almost every leading indicator is pointing not just to a slowdown in contraction, but up!
Just a few important ones:
Libor
Baltic Dry Index
ECRI's leading indices
Purchasing Manager's Index (from right around the world, including China, Brazil and the UK)
Resource prices
Equity markets
Debt markets

Then you have unemployment in the US increasing by less than half the previous month. It just keeps getting better.

There are many things to be uncertain about, but that is always the case looking forward.

For now, the system has been stabilised and the major economies are showing real improvement in conditions.

Consumer sentiment is back on the up.


These diaries are written by people who work in finance and have had a front row seat as their industry goes through the biggest changes in decades.
They give us regular insiders' updates on the mood in the City of London and the dramatic changes in the world of finance.
That is a little bit of a **** if you ask me. It means nothing and confers no authority. There are millions of people who work in finance including economists, phd's and the like. Some of the same people in the front row not only missed this whole episode but created it. Perhaps I just have little time if someone has to resort to titles and professions instead of sound, logical and reasonable arguments.

Look forward. The future is always uncertain, but certainly brighter than you might think.

[tricha]

I bet everyone that's in now, have their finger on the exject button. ;)

Treat recovery with caution - chartist
Lucy Battersby

June 8, 2009
THE current bear market rally is maturing although investors are still trying to squeeze as much as possible out of it, according to a chartist with 40 years experience.
On Friday Wall Street closed marginally higher, up 0.15 per cent, led by the industrials and technology sector, and London's FTSE 100 index closed 1.18 per cent higher.
Locally the S&P/ASX has risen 26.25 per cent since hitting a low of 3145 on March 6 this year, while more than 60 per cent of Global Fortune 500 stocks have met or exceeded a 38 per cent retracement of their falls, according to Garry Abeshouse.
Mr Abeshouse tracks 203 non-finance and 69 finance stocks from a list of the biggest corporations in the world according to capitalisation.
As a chartist, he analyses the retracement figures - how much a stock has retraced its fall - to find patterns and trends.
His latest charting shows the top 30 companies in the Dow Jones have retraced 31 per cent, the S&P 500 31 per cent, the Nasdaq 100 index 40 per cent, and FTSE 32 per cent.
"I think given the severity of the world's financial crisis, the worst in 80 years, the retracement levels of stocks justify a high degree of caution at current prices," he said.
"Over the last 12 months the US dollar and now US equities have formed bearish upward wedge formations on the charts. Upwards wedges are usually very well defined patterns, showing weakening upward momentum, hence the shape.
"These patterns are known to be very common in stocks during bear markets and were especially so during the period 1929 to 1932," he said.
Mr Abeshouse was head chartist at Bain & Co before it was taken over by Deutsche Bank in 1992.
He looks at historical data to find cyclical patterns, often referring as far back as 1875.
"If you look at the charts of past bear markets you will see that almost every major move down in every bear market has been preceded by a 'bull trap', designed to suck in the unwary. This is why it is wise to be cautious of too much optimism this early in the bear market," he said.
Mr Abeshouse also looked at the Australian dollar and found it had retraced 50 per cent of its fall from last year's high of US98c, but its future was difficult to predict.
"Any concerted move down in equities could take the copper price down as well, which is bearish for the Australian dollar, but if the US dollar falls that could be bullish for the Australian dollar - hence the dilemma," he said.
"Historically you would expect to find heavy resistance around the US80c area."
The Australian market will be closed today for the Queen's Birthday holiday.
CommSec chief economist Craig James said the market should start trading positively on Tuesday, with the employment figures from the US showing that job losses were not accelerating.
"It seems that the worst of the job losses is over and, historically, that's always meant improvement in terms of the sharemarket," Mr James said.
"Much depends on what happens in the US [tonight], but at this stage, we would say that the market would be up modestly, perhaps in the order of 10 to 15 points."
Mr James said local investors would also be looking towards monthly economic data from China next week.

[tricha]

George Soros: China a 'positive force'

The billionaire financier George Soros says that China's economy will grow faster than people expect and so will its global economic influence.



June 7, 2009: 12:45 PM ET


http://i2.cdn.turner.com/money/2009/06/07/news/international/soros_china.reut/george_soros_090408.03.jpgInvestor George Soros believes China's clout in the global economy will continue to increase.




SHANGHAI (Reuters) -- Financier George Soros said on Sunday that China's global influence is set to grow faster than most people expect, with its isolation from the global financial system and a heavy state role in banking aiding a relatively swift economic recovery.
He reiterated his cautious views regarding the surge in global stock markets, although he said it may have further to go given liquidity in the markets and that many investors are still sitting on the sidelines.
"In many ways, Chinese banking has benefited from being isolated from the rest of the world and is in better shape than the international banking system," he told an audience at Shanghai's Fudan University.
China's extensive capital controls have helped to shield its financial institutions from the worst of the global financial crisis.

0:00 /3:06Soros comes clean on coal
"The influence of the state is also greater. So when the government says 'lend', banks lend," Soros added. "This puts China in a better position to recover from the recession and that is in fact what has happened."
New loans by Chinese banks surged to record levels in the first quarter, spurring optimism over recovery prospects for the world's third-largest economy.
"China is going to be a positive force in the world and the market, and as a consequence, its power and influence are likely to grow. Personally, I believe it's going to grow faster than most people currently expect," Soros said.
He acknowledged that some doubts remain over China's economic recovery, however, noting data such as a continued fall in electricity consumption.
He also noted that China's aggressive 4 trillion yuan ($586 billion) economic stimulus program, announced last year, had bolstered the economy.
"If that program proves inadequate, it is in a position to apply additional stimulus. China is also in a position to foster a revival of its exports by extending credit and investing abroad," he said.
He reiterated his view that because China's economy is only one-quarter the size of the U.S. economy, it cannot replace the American consumer as the motor of the global economy, so global growth will be slower than in the past.
He sounded a more upbeat note for China's asset markets than for global markets overall, where he remained wary.
"I'm pretty cautious. Even though I've said prices are cheap, I'm not so optimistic as to put all my money into stocks or assets because I think that the outlook is fairly uncertain.
"I do, however, think that the Chinese economy is a promising economy. I think here it is more a matter of finding the right assets rather than saying that I'm not interested in investing."
Asked if the recent climb in global stock markets was a bear market rally, he said: "It may have further to go because there is a lot of liquidity, a lot of investors are on the sidelines. If the market keeps on going up, more of them may decide to join in. You never know how far the rally goes."
"But I certainly don't think we are at the beginning of a big bull market worldwide." http://i.cdn.turner.com/money/images/bug.gif (http://money.cnn.com/2009/06/07/news/international/soros_china.reut/index.htm?postversion=2009060712#TOP)

[Hoop]

Trich Quote..."I bet everyone that's in now, have their finger on the exject button. ;)"

Yes a truthful statement from you Tricha...but hey!..it's the nature of the business us Share investors are in ..even during a raging Bull market.

A bit like saying all sky divers have their fingers on their rip cords..eh... that's true too.

[zorba]

The best I could do tonight, not up to date, but it is easy to get the general picture.:rolleyes:

http://www.smartmoney.com/Investing/Economy/Even-Worse-Than-the-Great-Depression/?page=2

http://m1.smartmoney.com/aheadofthecurve/images/0306-chart.gif



Tricha,

With respect, Donald Luskin's graph, commentary and predictions are now hopelessly out of date. His article was published on 6 March 09 .....within a day or two of the low point in the DJ and S+P 500 indices. Since then they have recovered by 34 % (DJ) and 39% (S+P 500).

His analysis clearly comes from a totally idealogical "Republican" point of view. His text is a classic Republican snivel.

The same people who crashed the US economy and with it the global financial system.

Donald Luskin is the Rush Limburg of economic opinion bullsh!tters.

Just about all of the statements made by Luskin in the text accompanying the graph (see link above) are contradicted by events over the last three months.

Further time may show that we are currently in a bear market rally, and that the global recession may yet plumb deeper depths.

Indeed this is just what Luskin, Limburg and the entire Republican Party wants to happen ....

"what, can government interventions rescue the US and other global economies ?? ..... what utter rubbish ...... only severe Republican medicine will do any good ..... and untill the pinko-socialist Obama administration, and that imbecile Geithner, are voted out of office, there wont be any chance for recovery !!"

Or so Luskin wold have you believe.

Yeah Right !!!!

Time will tell .......

Z

.

[ratkin]

This is 2009 NOT 1929

[zorba]

Ratkin,

EXACTLY !!!!

[Stranger_Danger]

Of course, the devils advocate argument is that whilst previously, everyone was bearish, now, people are laughing at the one bearish doomsayer....

[macduffy]

Here's the Assistant Governor of the RBA with a cautiously positive outlook on the situation - as you'd expect, but makes a lot of sense.

;)

http://www.businessspectator.com.au/bs.nsf/Article/KGB-INTERROGATION-Guy-Debelle-pd20090604-SNV9P?OpenDocument&src=kgb

[STRAT]

Only sketched in by me so not accurate but you get the picture. In the greater scheme of things it says nothing. Could go down again could keep going up. That 34% gain doesnt look so significant in picture form though eh Zorba? :eek:

In terms of the overlay, The only thing those two lines have in common that I can see is they are both trending down

[lakedaemonian]

I have been trapped into a 150% increase in my portfolio in 4 months.
Could you help me with this problem? ;)

You need to look forward. This rally is totally justified.
Almost every leading indicator is pointing not just to a slowdown in contraction, but up!
Just a few important ones:
Libor
Baltic Dry Index
ECRI's leading indices
Purchasing Manager's Index (from right around the world, including China, Brazil and the UK)
Resource prices
Equity markets
Debt markets

Then you have unemployment in the US increasing by less than half the previous month. It just keeps getting better.

There are many things to be uncertain about, but that is always the case looking forward.

For now, the system has been stabilised and the major economies are showing real improvement in conditions.

Consumer sentiment is back on the up.


That is a little bit of a **** if you ask me. It means nothing and confers no authority. There are millions of people who work in finance including economists, phd's and the like. Some of the same people in the front row not only missed this whole episode but created it. Perhaps I just have little time if someone has to resort to titles and professions instead of sound, logical and reasonable arguments.

Look forward. The future is always uncertain, but certainly brighter than you might think.

The Finance, Insurance/Investment, Real Estate(FIRE) economy are detached and do not correlate with the "real" economy in my opinion.

Using US unemployment numbers as anything more than what it is....a highly manipulated and bogus "divining rod", would be extremely dangerous.

Have a look at shadowstats for far more accurate unemployment statistics....they couldn't possibly be worse than the BLS propaganda masquerading as accurate data.

Good on you for getting such an incredible return by running out onto the highway and dodging trucks.....your appetite for risk far exceeds mine.

The only "green shoots" I see are bits of undigested grass in a pile of poo.

[The Big Ease]

The Finance, Insurance/Investment, Real Estate(FIRE) economy are detached and do not correlate with the "real" economy in my opinion.

Using US unemployment numbers as anything more than what it is....a highly manipulated and bogus "divining rod", would be extremely dangerous.

Have a look at shadowstats for far more accurate unemployment statistics....they couldn't possibly be worse than the BLS propaganda masquerading as accurate data.

Good on you for getting such an incredible return by running out onto the highway and dodging trucks.....your appetite for risk far exceeds mine.

The only "green shoots" I see are bits of undigested grass in a pile of poo.
Hi lakedaemonian,
Of course everybody is entitled to their opinion, but in this instance I would have to disagree somewhat.

This recession started because of the finance and banking industry, so the "real" economy as you call it, is most definitely connected to these industries.

However, I did read an article on Sunday ( Sunday Times) which quoted someone who completed a study of recessions and he said that every recession that had its origins in the credit/banking/finance sector ended with a "creditless" expansion in GDP. In other words credit growth lagging GDP growth.

So I guess in this respect, I might be inclined to agree with you, but not towards the point that you make.

I agree that official government figures are up in the air and there was a quote on bloomberg that said some "traders" did not believe the latest figures. All will be known in the end.

I see lots of leading indicators but agree that growth seems to be somewhere off in the distance....though according to this article in the Sunday Times, some economists are suggesting it is quite possible that we are going to experience growth as soon as the next quarter.

This would be quite remarkable.

[The Big Ease]

This is 2009 NOT 1929

Just had to add the BOLD
Someone had to say it. Why anyone would think we had to follow what happened in 1929 just confuses me. It's interesting to look at charts which compare, but that's just about it.

[Lego_Man]

You also forgot to mention that every bear market ends with a lot of bears saying that the recovery is bull****.

Having said that, a re-test is not beyond the realms of possibility.

[zorba]

Only sketched in by me so not accurate but you get the picture. In the greater scheme of things it says nothing. Could go down again could keep going up. That 34% gain doesnt look so significant in picture form though eh Zorba? :eek:

In terms of the overlay, The only thing those two lines have in common that I can see is they are both trending down

Strat,

Fair point ...... great sketching ..... it willl be very interesting to see were it all goes from here.

Z

[tricha]

Trich Quote..."I bet everyone that's in now, have their finger on the exject button. ;)"

Yes a truthful statement from you Tricha...but hey!..it's the nature of the business us Share investors are in ..even during a raging Bull market.

A bit like saying all sky divers have their fingers on their rip cords..eh... that's true too.

Oh yeah Hoop we have the greed or fear factor at the max.

Once the US figures out, that their money out of thin air creation scheme, does not solve the problems, ..............

And this is the last throw of the dice.

We have "Slam Dunk" the end of the American dream, built on cheap energy.

Where does this leave us, keep those stop loses tight folks :D and your cash under your bed or better still, a few gold bars hidden away ;)

[upside_umop]

a very simple, 2 cents worth, for all of 2 minutes i have to reply.

tricha, in the great depression, the stopped spending and cut money supply.

in the financial crisis, they have increased spending and increased money supply.

there is quite a distinct difference...bernanke studied the great depression, thats what he specializes in, to try and avoid that problem.

your quite right though, you cant increase money supply that much and not expect consequences...whether that translates into a feic load of inflation in the immediate future is unknown, but the financial markets are forward looking, and thats a factor that could be getting priced in about now.

Inflation is directly proportional to money supply growth..so if they keep this up:

http://www.personal.kent.edu/~cupton/bbamacro/ma08_files/image014.jpg

u get the picture

but then theres always steralization of money supply too...it will be interesting to see how it develops!

in real terms...we could go backwards! but its best to try and keep up with asset inflation, and the stock market is just one of those forms that provides a slight hedge.

ok that took 5 minutes.

[Hoop]

This Donald Luskin Guy is no slug. Note: I have edited this article (cut about 70% of it out) as from my own experience, long posts don't get read by STers

SmartMoney

Published June 5, 2009
Ahead of the Curve by Donald Luskin



I'm happy to report that my very favorite macroeconomic indicator has turned positive. ....

....It's my favorite because it has nothing to do with macroeconomics, and it is based on analysis that is always wrong. And yet, it works.....

...I'm talking about consensus forward earnings for the stock market. That means taking all the Wall Street analysts' guesses for earnings one year in the future for whatever companies they happen to cover, averaging them, and then capitalization-weighting them so you get the aggregate consensus for the whole S&P 500......


...And it works. Turning points in aggregate consensus forward earnings for the S&P 500 -- that is, when they've stopped growing and started falling -- have perfectly forecasted the last three recessions, including the current one....

...And when they turned up, they perfectly forecasted the recoveries from the last two recessions....


...And now aggregate forward earnings are on the verge of forecasting that earnings growth is back. It's a buy signal. And if the pattern holds, it will be a good one.....

....It comes at a critical time in markets. The S&P 500 is brushing up against a major downtrend line, the one that defines this terrible bear market....


....So call me a cautious bull. I now have almost no doubt that the recession is over. I am very confident that stocks won't make new lower lows in this cycle.....

....And I can't ignore the fact that my favorite indicator is giving a buy signal.
My favorite way to play it continues to be what I've been recommending here for months -- stocks that benefit from inflation. My own personal favorites are xxxxxx companies, involved in xxxxxx (the answer is in the article..gives the STers some incentive to read the article in full....Hoop)
That way I get to exploit the good news of economic recovery, and at the same time exploit the bad news of inflation.

URL for this article:
http://www.smartmoney.com/investing/stocks/my-favorite-indicator/

[STRAT]

I still on the fence here. Im a little concerned so many of you have become raging bulls of late and I would have thought the increase in copy, paste and links to talking heads on the site is a bit of a worry too. :D

I must be becoming conservative or something :eek:

[macduffy]

It makes sense to be cautious at this stage but equally one needn't be completely out of the market and miss a lot of attractive buys.
TSE, BKN, CBP, GCL have all been good performers for me over the last few months but I've ridden them with tight stops and havn't been concerned about leaving a bit more upside for someone else when they've turned down.

[STRAT]

It makes sense to be cautious at this stage but equally one needn't be completely out of the market and miss a lot of attractive buys.
TSE, BKN, CBP, GCL have all been good performers for me over the last few months but I've ridden them with tight stops and havn't been concerned about leaving a bit more upside for someone else when they've turned down.Dont get me wrong MacDuffy,
Ive had a great year so far and am still very much in. After pretty much 9 strait months sitting on my hands last year and early this year I couldnt be happier.

Lets just say I worry about what driver will want to chat about when I on occasion have to catch a cab. :D

[STRAT]

I wouldnt say I'm a raging bull, but think the market will head upwards, followed by a correction, followed by another run, followed by a correction ...... It may ultimately go nowhere fast over the next 10 years, like in the 70's, but short of some unforeseen calamity, I dont see it heading below the March lows.SO, you are saying the market will go up and down KW. I agree :D
I called a low last November :o Me and my big mouth lol. For may stocks it was though.;)

I started this thread just to see how everyone was seated at what was a very indecisive time. At the end of the day I dont care as long as we dont have any overnight crashes. Its always difficult to know whether to buy or sell when that happens.

[Dr_Who]

Comments on this thread reminds me of a song by Black Eye Pea called Boom Boom Boom. :D

I'm so 3008
You so 2000 and late
I got that boom, boom, boom
That future boom, boom, boom
Let me get it now

http://www.youtube.com/watch?v=9F444CELomo

[Hoop]

Think about this - on March 22 2000 the S&P500 hit 1500.
SEVEN and half years later it closed 65 points higher.
18 months later in 2009 its at 939

This decade wont just see us going nowhere, it will see us going backwards! The lost investment decade....

What will the next decade bring? Will it get back to 1500 by 2019? Will we spend TWO decades going nowhere fast?

All you can do is ride the swings and roundabouts within each cycle. Technically speaking, we have been in a bear market since 2000, so personally I think we are overdue a new bull market, even if its a veeeerrrryyyy slooooow recovery :-)

The S&P500 has been in a secular bear market cycle since year 2000.
Secular cycle can be of any length of time but average out at 14 years in length. This is not necessarily a disadvantage time for all investors (as the media leads one to believe) .. some of the more spectacular bull runs have occurred during these times e.g 2003-2007.

[Lego_Man]

Yeah, all it means is that buy and hold is dead.

[Hoop]

Yeah, all it means is that buy and hold is dead.
Very true Legoman..but only in very long term indexed related buy and holds investments .
There has been some research been done about the wisdom of entering certain superannuation schemes. A workers usually strikes 3 secular cycle events during their working life time of 40-45 years. A worker does well if they can time two secular bull cycles to one secular bear cycle but as you would expect not that sucessful if they time 2 secular bear cycles to one secular Bull cycle, so at certain times indexed type Super may not be a good option.

Of interest: I haven't the Data to prove it (need annualised PE ratio data using Schiller formula) but have my suspicions that both the ASX and NZX secular bull cycles ended in 2007.Some one on ST with access to this information may be able to confirm or deny that.

[STRAT]

Yeah, all it means is that buy and hold is dead.Hi Lego and Hoop.
I think you would be very surprised at how well some of the more skilled advocators buy and hold actually do.

Personally I would be hopeless but there is more than one way to get money out of the share market. On another site I used to frequent for example there was a chap who forged a decent living out of trading stocks that were about to payout Dividends.

[Hoop]

Hi Lego anf Hoop.
I think you would be very surprised at how well some of the more skilled advocators buy and hold actually do.

Personally I would be hopeless but there is more than one way to get money out of the share market. On another site I used to frequent for example there was a chap who forged a decent living out of trading stocks that were about to payout Dividends.

Strat would that person be Rozella?

Back to the topic ...In theory very long term holding in Indexed linked investments throughout a secular bear cycle is generally not a good idea...especially so if one bought in at the peak of a bull market run. Buying at the peak of a bull market in a Bull secular cycle and using a buy and hold long term strategy is OK because the next bull market peak is usually a lot higher

My post to Leg-Man... Quote Lego_Man Yeah, all it means is that buy and hold is dead. My response quote... "Very true Legoman..but only in very long term indexed related buy and holds investments." My Quote relates to the now because now we are now in a secular bear market cycle which happens to be measured on an aggregate of stocks e.g S&P500 index. There is some thinking that buy and hold strategy theory has it failings in a portfolio situation as well (see***here at bottom of my post)

Strat, as you know investing in individual stocks is another story...it depends on the past behaviour of that individual stock as to what strategic investment goal you try to implement whether you decide to attempt a buy and hold strategy or some other strategy.

Usually predicting the future doesn't work out, but designing an achievement goal over time when buying a certain individual stock is never a wrong thing to do. If that stock is underachieving your goals you sell it...simple as that!

Contrary to media misinterpretation and using hindsight...implementing a medium term buy and hold strategy on indexed funds since the end of March 2009 to now would have been an excellent idea.

Buying in at the bottom and hold is always a good strategic option..however during bear times no one really knows where the bottom is and by the time its figured out the index has risen by 30+% hence making a late buy and hold investment not as good an idea in a secular bear cycle environment because the bull run has a peak usually at best equal to the peak of the previous bull run.**

**In a secular Bull cycle a bull run peak is nearly always much higher than the previous bull run peak, so a belated buy and hold investment is still a good option.

Is Buy and Hold dead??? in individual stocks ...nah.. I still have a big buy and hold in ABA.nz (Abano Healthcare) from way back sitting in my Portfolio. This stock I've held from the last Bull market cycle right through the 2008 -2009 bear...it never really reached my sell trigger as it never dropped low enough although I must admit I probably should've on 3 occasions... end of 2007 when it broke its meteoric uptrend, (and entered into its $5.40 - $4.20 trading range (during the crash) )..and Nov 2008 and March 2009 dips.....in hindsight damn glad I didn't sell.....
Even now I still regard ABA as a long term buy and hold stock.

This topic is covered by the research article brief Markowitz Misunderstood (http://www.crestmontresearch.com/pdfs/Article%20Markowitz.pdf)which is written in simple language.


Tricia go and buy another bottle of port if you venture past here, it becomes heavy going.

***There is media noise at the moment suggesting that under the current investing environment .....MPT (modern Portfolio theory)1 and buy & hold is dead.... I personally think portfolio theory is hard to understand especially one's own perspective towards stock selection which I think leads to misinterpretation of the theories, misguided beliefs and execution.. see what you think buy clicking on the references.

Reference
1...Modern portfolio theory From Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Modern_portfolio_theory)
2...Post-modern portfolio theory From Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Post-modern_portfolio_theory)

[Lego_Man]

Good responses - my point was for the need in such markets to try and minimise your downside. A couple of months ago indices were at 1997 levels - to me that doesnt equate to a deck in your favour. A very smart stockpicker might be able to achieve good returns obviously but my point was that a more active* approach is undoubtedly more suited to such an environment.

* Dare i say it, TA-based approach

[STRAT]

Excellent post Hoop and great reference material. Even better after a port or two.

All in all, way to complex for me. I like to keep it a lot more simple. I set a minimum performance goal for a stock I purchase usually based on a minimum anual return and thats about it. More often than not I end up trading out sometimes more than once long before a year is up. Portfolio design over such long time frames is way beyond my attention span :D

Not Roszella but he too seems to do well trading that way too.

[ratkin]

When you hear buy and hold is dead (jan feb 2009 ) then you know its the time to buy and hold.

Its laughable when you see a chart of an index , the chartist points out how much a buy and holder would of lost had they bought at the top of the market.

The reason most buy and hold people fail is because they lose their nerve and sell out , or they always buy when everyone is exuberant.

If done properly buy and hold is a great strategy , but is difficult in practice as it requires an iron nerve and far more patience than most possess. It also requires that the investor has a fair amout of money.

[OutToLunch]

It also requires that the investor has a fair amout of money.

At least, plenty to start with :rolleyes:

[trackers]

While you were sleeping: 10 banks to repay TARP funds; oil, copper gain



http://www.sharechat.co.nz/article/1f2e39d1/while-you-were-sleeping-10-banks-to-repay-tarp-funds-oil-copper-gain.html



Ten US lenders won approval from the US Treasury to repay a total US$68 billion of taxpayer funds, giving them more freedom to set executive pay, hire workers and lend. The Treasury didn’t name the banks. American Express, Bank of New York Mellon Corp., BB&T Corp., Capital One Financial Corp., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, Northern Trust Corp., State Street Corp. and US Bancorp said they gained approval, Reuters reported.
“These repayments are an encouraging sign of financial repair. But we still have work to do,” said Treasury Secretary Timothy Geithner.
Bank of America and Citigroup didn’t get approval to repay funding from the Troubled Asset Relief Program, or TARP. Wells Fargo also didn’t gain approval.
US lenders are raising more than US$100 billion, helped by a rally in their own shares, more than the US$74.6 billion of additional capital identified by the stress tests as needing to be raised to strengthen their balance sheets.
The total that will be rapid to the government amounts to US$70 billion. Shares held by the government under the Capital Purchase Program have paid US$4.5 billion in dividend payments, according to the Treasury.
Prices of commodities rallied as the US dollar weakened and auto sales rose in China.
Copper futures for July delivery rose 4.7% to US$2.358 a pound on the New York Mercantile Exchange and have jumped 60% this year.
Crude oil had its first gain in three days ahead of an Energy Department report tomorrow that may show refiners are increasing throughput in anticipation of demand in the Northern Hemisphere summer.
Crude oil for July delivery rose 2.8% to US$69.97 a barrel on the New York Mercantile Exchange and have surged 57% this year.
Gold for August delivery slipped 0.2% to US$950.30 an ounce in New York.
The US dollar declined against the euro as optimism the global economic slump is easing, reducing demand for the world’s reserve currency as a haven.

[Phaedrus]

Its laughable when you see a chart of an index, the chartist points out how much a buy and holder would of lost had they bought at the top of the market. I see it as tragic rather than laughable, Ratkin - but buying at the top of the market was exactly what you as a "buy and holder" were doing. At the end of 2007 when I was posting charts advocating caution (no buying) you were commenting "All very well being cautious but you have missed most of the best buying". At the beginning of 2008 when the market was clearly showing abnormal weakness and I had moved to 100% cash (as per previously posted Index based charts) you were saying "To sum up i prefer to be brave and force myself to buy when times get ugly, its not easy, human nature means we naturally want to do the same as everyone else, to seek reasurance in numbers etc, its tough going against the flow." Not only is it tough, Ratkin, it is also very, very expensive. You were buying "bargain" stocks like MCU, BXB and MFF - even today, these will have to rise by 34% to 76% just to get back to what you paid. You weren't being brave, you were being foolish.


The reason most "buy and hold" people fail is because they lose their nerve and sell outHad you stopped buying in December 2007, "lost your nerve" and sold out completely in Jan 2008, you would be far better off today. The biggest losers in this bear market were the staunch "buy and hold" advocates.


The reason most "buy and hold" people fail is because.... they always buy when everyone is exuberant.When the market is rising? That's a sensible move. Look what happened to you when you bought on a falling market. The reason most "buy and hold" people fail is....Bear markets.


If done properly "buy and hold" is a great strategy..... True - but only in Bull markets. In Bear markets it ensures that maximum losses are sustained.


....... but is difficult in practice as it requires an iron nerve and far more patience than most possess.Well Ratkin, you've certainly proved that you have an iron nerve - all you need now is the patience to wait (perhaps for years) for the stocks you so bravely bought to get back to what you paid for them.

As I said on 11/2/08 "What you are practicing here Ratkin is called 'creative avoidance'. You are tightly focussed on trying to pick up a few shares of "bargain" stocks while choosing to ignore the fact that any small gains made by doing this are eclipsed by the losses your longterm portfolio has incurred.

Ratkin, you and I have deep and fundamental differences in our approach to investing. You believe in "time in the market rather than timing the market" whereas I maintain that you can time the market and devote a lot of effort to that end. You say (23/1/08) that the current market correction is a just "a storm in a teacup". I say it is the most significant event in the history of the NZSX50 Index. To you, therefore, it is business as usual with little or no selling and you are investing new money all the way down. To me it is a time for selling, not buying. (I began selling down in early November and by the end of November had moved to 100% cash).

There are quite a number of knowledgable, experienced and competent investors that post here on ST, Ratkin. They include the likes of Halebop, Winner69, KW, Placebo, Warthog and many others. You can learn a lot from such people. Many of these saw fit to take a significant proportion of their money off the table when the markets weakened. You described such prudent action as that of "nervous ninnys".

When significant market corrections occur,

SELLING IS MORE IMPORTANT THAN BUYING.

[whatsup]

Well said Phad----, take wide advice but make ones own decession!

[ratkin]

I expected any advocation of buy and hold would initiate an attack from Mr P although im suprised at the condescending and personal nature of the attack. Its almost as if he sees an approach different to his own as some kind of personal threat.

fwiw i buy stocks every month , without fail. Some will of been bought at the top of the market some at the very bottom. I have no interest in trying to time the market.

Quite a few of my stocks were bought in the 1990s and have increased in value many , many times. An example is ryman health care , bought very cheaply before all the splits.

With luck in the health department i expect to be invested for another twenty or thirty years , and the odd blip like the current recession are to be expected.


I have been posting on this forum and sharechat since 1998 and during that time im sure i have made many bad and good calls. But predictably you like to point out the bad calls.

Im more than happy with my investment approach which has served me very well for over twenty years.

[Footsie]

The only way to have a fair debate would be to compare the results of Phaedrus with Ratkin over a 10 year period.

However, if the results show that P is the winner but Rat still has a 20%+ p.a. return i'd suggest he just stick to his knitting.

Would you both like to post your results. honesty box rules apply of course.

Test implies that each individual has been using the same method for the past 10 years. Any change of method would make this test null and void.

[ratkin]

Not interested in comparing dick sizes with anybody.

Dont know why the debate has to get personal tbh

Think i will withdraw from it , better things to do with my time

[tricha]

Ok, I bought my bottle of Port as suggested by Hoop, and it's quite nice. I rang MLC and changed my super fund back to 100% cash ;)

As u all know the chart is not up to date, now I challenge all u tea leave readers on this thread, to come up with an over layed chart of 1929 and now. Do a comparision and then do a hold, buy now or run analysis.

I am betting no one will have the guts to do it, especially Phaedrus. :)

And none of this if, buts and maybe's.

Happy Hunting :p


The best I could do tonight, not up to date, but it is easy to get the general picture.:rolleyes:

http://www.smartmoney.com/Investing/Economy/Even-Worse-Than-the-Great-Depression/?page=2

http://m1.smartmoney.com/aheadofthecurve/images/0306-chart.gif

[shasta]

Ok, I bought my bottle of Port as suggested by Hoop, and it's quite nice. I rang MLC and changed my super fund back to 100% cash ;)

As u all know the chart is not up to date, now I challenge all u tea leave readers on this thread, to come up with an over layed chart of 1929 and now. Do a comparision and then do a hold, buy now or run analysis.

I am betting no one will have the guts to do it, especially Phaedrus. :)

And none of this if, buts and maybe's.

Happy Hunting :p

Tricha

It ain't 1929...

The comparisons aren't valid...

We ain't outta the woods by any stretch, but all this mass hysteria & bearishness, will only start off the next bull run!

Oil is in an uptrend, so is gold, why go to cash?

[STRAT]

Ok, I bought my bottle of Port as suggested by Hoop, and it's quite nice. I rang MLC and changed my super fund back to 100% cash ;)

As u all know the chart is not up to date, now I challenge all u tea leave readers on this thread, to come up with an over layed chart of 1929 and now. Do a comparision and then do a hold, buy now or run analysis.

I am betting no one will have the guts to do it, especially Phaedrus. :)

And none of this if, buts and maybe's.

Happy Hunting :pI kinda did that Tricha.

While there are many who could do a better job it looks like they are all giving you the finger :eek:

funny that :D

[tricha]

Tricha

It ain't 1929...

The comparisons aren't valid...

We ain't outta the woods by any stretch, but all this mass hysteria & bearishness, will only start off the next bull run!

Oil is in an uptrend, so is gold, why go to cash?

I want to see the mighty one make an honest call and be judged like he likes to judge others.

Anyway it looks like u r covering your bets by favouring gold , Depression proofing no doubt :rolleyes:

[tricha]

I kinda did that Tricha.

While there are many who could do a better job it looks like they are all giving you the finger :eek:

funny that :D

Giving me the finger or no guts ;)

[shasta]

I want to see the mighty one make an honest call and be judged like he likes to judge others.

Anyway it looks like u r covering your bets by favouring gold , Depression proofing no doubt :rolleyes:

Yup gold & black gold, & when things finally start moving in the right direction inflation is our next worry, & gold will look after that ;)

[tricha]

Yup gold & black gold, & when things finally start moving in the right direction inflation is our next worry, & gold will look after that ;)

Hyperinflation like in Germany in 1924, hmm have u read your history books Shasta, it tends to repeat.

[STRAT]

Hyperinflation like in Germany in 1924, hmm have u read your history books Shasta, it tends to repeat.Lookin in the rear view mirror.
Thought you had no time for that kind of rubbish? :D

re the previous post. Ive found ridicule to not be a great motivator so I will go with the finger ;)

[shasta]

Hyperinflation like in Germany in 1924, hmm have u read your history books Shasta, it tends to repeat.

Germany now & in 1924 are two very different beasts...

Lets leave hyperinflation to the communist south american countries & Zimbabwe.

The western world tends not to get caught up in these traps...

Look a little closer to home, the US, UK, Australia, NZ - thats where the leading indicators mean the most

[tricha]

Lookin in the rear view mirror.
Thought you had no time for that kind of rubbish? :D

re the previous post. Ive found ridicule to not be a great motivator so I will go with the finger ;)

Thats what I expect from a mate of Phaedrus, another gutless wonder ;)

P.S and come on be honest about it, u would be out in the open. Naked

[STRAT]

Thats what I expect from a mate of Phaedrus, another gutless wonder ;)

P.S and come on be honest about it, u would be out in the open. NakedDont get that one Tricha :confused:
How am I short on guts and what is it you want me to be honest about?

[dragonz]

Dont get that one Tricha :confused:
How am I short on guts and what is it you want me to be honest about?

Still the port kicking in me thinks ...... or he thinks you are naked and dont have the guts to be honest about it.

[The Big Ease]

Almost all of the mainstream commentary is now beginning to focus ahead on how to manage inflation, when/if it becomes a problem.

The worst is over for the financial crisis.

[ratkin]

We’re “absolutely in a bull market” and U.S. stocks will rally for another couple of years, said Laszlo Birinyi, president of Birinyi Associates. He offered CNBC his top picks now. (See his recommendations, below.)Birinyi said while investors think that the market "climbs a wall of worry," the market actually fights against a "wall of anxiety."
“Anxiety is in the part of the people who have missed the rally,” Birinyi told CNBC. “And they’re trying to talk the market down so that they can get back in.”


lol , the "experts" swing from one extreme to another

[trackers]

lol , the "experts" swing from one extreme to another

I saw some experts recommendations on a stock yesterday, made me laugh...

Analyst 1: BUY
Analyst 2: BUY
Analyst 3: OUTPERFORM
Analyst 4: OUTPERFORM
Analyst 5: HOLD
Analyst 6: HOLD
Analyst 7: SELL
Analyst 8: SELL

:confused: :rolleyes:

[tricha]

And where does this leave Australia, caught in the middle.

Is the lucky country with only 24 million people and a booty of loot, in the ground, going to gradually de-couple from the states.
But until then we remain on a rollercoaster.

In April, India's car sales were 4.2 percent higher than they were a year prior. Retail sales rose 15 percent in China in the first quarter of 2009. China is likely to grow at 7 or 8 percent this year, India at 6 percent and Indonesia at 4 percent.
By contrast, even using badly flawed official data, the US economy contracted at an annual rate of 6.1 percent last quarter, Europe by 9.6 percent and Japan by a frightening 15 percent, something that rivals the 1930s.
In the West, plus G7 member Japan, banks are overleveraged and thus dysfunctional, governments paralyzed with debt, and consumers are rebuilding their huge debt burdens. America is having trouble selling its public debt at attractive prices. The last three Treasury auctions have gone badly. Its largest state, California, is veering toward total fiscal collapse. The current fiscal year US budget deficit is going to surpass 13 percent of GDP, a level last seen during World War II.

By contrast emerging-market banks are largely healthy and profitable. Every Indian bank, government and private, posted profits in the last quarter of 2008. The governments are in good fiscal shape. China has the world’s largest foreign currency reserves, $2 trillion in reserves, and a budget deficit less than 3 percent of GDP. Brazil is now posting a current account surplus. Indonesia has reduced its debt from 100 percent of GDP nine years ago to 34 percent today.

http://www.financialsense.com/editorials/engdahl/2009/0610.html

[Mick100]

http://www.financialsense.com/fsu/editorials/ciovacco/2009/0612.html

[fungus pudding]

Its getting hard to find bargains again! A correction would be nice, as I want to go shopping :-)


I don't know anything about the share market, never did, but there are heaps of things that look like bargains to me.

[STRAT]

Its getting hard to find bargains again! A correction would be nice, as I want to go shopping :-)Bargains are easy to spot. Theyre the ones you should have bought before they went up heaps :D

[STRAT]

I know Strat, I kinda forgot that I had wanted to buy SEK and WTF and got quite a shock when I checked their price today.

Was having a nosy at some of the engineering companies, but then discovered a write up in the AFR today has pushed the price up <sigh>Cant be on em all KW. Im happy as long as most of the ones I have got are doin alright. But like you I have seen quite a few ( Nov & March ) bargains lately

[OutToLunch]

Where is this all going though? It's been a nice few months for recovering last year's losses but I'm increasingly nervous about the outlook. Trouble is there's so much stuff out there to read, with so many different opinions, that it's hard to work out what the best move is to prepare for what's coming up. On one hand we have arguments like these for hyperinflation:
*
http://www.atimes.com/atimes/Global_Economy/KF05Dj01.html

http://www.thebull.com.au/articles_detail.php?id=3706

… and a case for deflation instead:

http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/04/20/quarterly-review-and-outlook-first-quarter-2009.aspx


Somewhere in the middle I suspect lies the truth.. but, having not experienced anything like these market conditions before (that probably lumps me in with most of these "experts"), I really don't know. Do we look to gold? Food? Oil producers? Cash under the mattress (mattress producers, in that case)? Makers of antidepressants (geez these guys must have made a bundle over the last year or two)..... ?


I've been focussing on the energy sector lately with the long term view that energy is always going to be in demand, but as to where we go from here in the short to medium term, um, pass... :confused:

[lakedaemonian]

Where is this all going though? It's been a nice few months for recovering last year's losses but I'm increasingly nervous about the outlook. Trouble is there's so much stuff out there to read, with so many different opinions, that it's hard to work out what the best move is to prepare for what's coming up. On one hand we have arguments like these for hyperinflation:
*
http://www.atimes.com/atimes/Global_Economy/KF05Dj01.html

http://www.thebull.com.au/articles_detail.php?id=3706

… and a case for deflation instead:

http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/04/20/quarterly-review-and-outlook-first-quarter-2009.aspx


Somewhere in the middle I suspect lies the truth.. but, having not experienced anything like these market conditions before (that probably lumps me in with most of these "experts"), I really don't know. Do we look to gold? Food? Oil producers? Cash under the mattress (mattress producers, in that case)? Makers of antidepressants (geez these guys must have made a bundle over the last year or two)..... ?


I've been focussing on the energy sector lately with the long term view that energy is always going to be in demand, but as to where we go from here in the short to medium term, um, pass... :confused:

I'm a BIG fan of iTulip.

[The Big Ease]

OTL,

You just have to decide for yourself.
What would you expect to see happen before a recovery is possible?
Are those things happening or showing signs of turning around?

We will always have what-ifs with credible commentators on each side.
Most commentators are almost always wrong until the events are almost upon us and then you don't need to be told about them anyhow.

Then you have others who were right about one thing and we mistakenly believe they will continue to be right about what transpires next.

I have posted a couple of times in this thread about what I would like to see before believing the worst is behind us and recovery is imminent. I believe most of those indicators are moving well into positive territory or reversing their negative momentum at an encouraging rate.

You might be interested to know that banks are about to report second quarter earnings and they should continue to improve upon the surprise first quarter profits they made. Probably big increases, especially from the stronger banks and the next quarter will only get better with TARP repaid etc.

China is continuing its momentum and there is also talk of India stepping up. When you take a step back, the really big forces are still there to drive growth once the fear fades.

My guess is we will continue to have a few days up and a sharp drop here and there to relieve the unease. But the momentum is pretty clear.

There is far more good news emergin than bad news.

[Stranger_Danger]

OTL,


There is far more good news emergin than bad news.

You mean like reading a Chinese newspaper? Or talking to a woman who lives with an abusive husband?

[STRAT]

I'm a BIG fan of iTulip.Looks Good lakedaemonian. I have registered

[Dr_Who]

Whose got big enough balls to pick up some stocks today? :cool:

[STRAT]

Whose got big enough balls to pick up some stocks today? :cool:haha Doc,
Thats not the part of your anatomy you should be usin to make decisions.

[trackers]

Whose got big enough balls to pick up some stocks today? :cool:

Absolutely! A lot of great stocks just got cheaper....but which to buy...

looking at getting some more CUE or TSV or maybe BOW

[gazprom1]

Trying to buy some BOW and VPEO at slightly lower levels than they are trading at currently but not worried if I don't get hit.

[gazprom1]

Well I have some more BOW now that it is down 10% for the day!!! No VPEO yet...

[tricha]

Whose got big enough balls to pick up some stocks today? :cool:

Not me, tomorrow they might be cheaper and I kicked my Super Fund back to cash only last Thursday ;)

Markets tumble across Asia (http://www.marketwatch.com/story/asian-shares-lower-recent-optimism-may-be-misplaced)
http://s.wsj.net/public/resources/MWimages/MW-AA454_bank_o_MC_20090521042129.jpg
Reuters
The Bank of Japan building in Tokyo

Banking, commodity and energy stocks lead Asian markets lower on worries the "green shoots" of economic recovery may be an illusion and following a bleak session for Wall Street.

[lakedaemonian]

Looks Good lakedaemonian. I have registered

iTulip has a LOT of big brains with a hard to match track record.

Keep an eye out for the following users:

EJ : Eric Janszen forum founder and one of it's owners

Bart : He's got some of the most wicked cool charts on the net

FRED : Multiuser admin account used for anonymously posting articles on behalf of forum

Just remember to keep things in perspective ;)

It's easy to drink the kool-aid and get onboard the contrarian train of doom :)

It's just one resource for my family's own personal financial plan...but probably the most important to me.

Some of the forum members there really do rate as amongst the "All Blacks" of the internet finance/investment/economics community.

Just my 0.02c

[tricha]

Page last updated at 17:50 GMT, Friday, 12 June 2009 18:50 UK
West to East: A journey through China's economic crisis





http://news.bbc.co.uk/2/hi/programmes/newsnight/8098152.stm

[Hoop]

Absolutely! A lot of great stocks just got cheaper....but which to buy...

looking at getting some more CUE or TSV or maybe BOW

Tricia
Trackers post highlights the very reason why the market may not fall far.

There are many out there with this attitude.. including those conservative folk who are pissed off by not getting in early to appreciate that 40% bounce back opportunity... and have been impatiently waiting for that long overdue correction that never came (until now??) to enter.

Edit:...This decline started in Europe yesterday ... the European markets have just opened "flat".. no more decline..yet?

[STRAT]

iTulip has a LOT of big brains with a hard to match track record.

Keep an eye out for the following users:

EJ : Eric Janszen forum founder and one of it's owners

Bart : He's got some of the most wicked cool charts on the net

FRED : Multiuser admin account used for anonymously posting articles on behalf of forum

Just remember to keep things in perspective ;)

It's easy to drink the kool-aid and get onboard the contrarian train of doom :)

It's just one resource for my family's own personal financial plan...but probably the most important to me.

Some of the forum members there really do rate as amongst the "All Blacks" of the internet finance/investment/economics community.

Just my 0.02c"The All Blacks of" eh? :D
Not all Kiwis follow that faith and Im not a religious man. :eek:

Markets down but oil up over night. I will be interested to see which moves my oil stocks today

[STRAT]

The Charts are all looking a bit grim guys and girls.
Starting to look like its time to get out of the Market again :(

[The Big Ease]

Its just that time of the data cycle. Bit of anxiety is creeping in before hand.
The data should be good based on a number of leading indicators.

http://www.businesscycle.com/files/ecri_data/monthly_indexes.gif

[STRAT]

Its just that time of the data cycle. Bit of anxiety is creeping in before hand.
The data should be good based on a number of leading indicators.

http://www.businesscycle.com/files/ecri_data/monthly_indexes.gifHi TBE,
hope you are right. Gonna keep my trigger finger poised to go in any case.
Thanks for those charts. Do you have similar for previous years? Would be interesting to compare.

[jdg]

i was pleased to see soros with a few words of comfort; suggesting the worst is behind us. stiil, even if he's right, that doesn't mean there wont be a few bumps along the way.

http://www.stuff.co.nz/business/world/2522580/Soros-worst-of-crisis-behind-us

-j

[The Big Ease]

Hi TBE,
hope you are right. Gonna keep my trigger finger poised to go in any case.
Thanks for those charts. Do you have similar for previous years? Would be interesting to compare.

No I don't, but another indicator that has been around longer has also indicated it is time to be in the market.

Look up the Coppock Indicator. Apparently right 90% of the time when picking market bottoms. Not so good picking the top.

[zorba]

Its just that time of the data cycle. Bit of anxiety is creeping in before hand.
The data should be good based on a number of leading indicators.

http://www.businesscycle.com/files/ecri_data/monthly_indexes.gif


TBE,

Thx for post .....

Very interesting website:

http://www.businesscycle.com/

and especially the source for your graphs:

http://www.businesscycle.com/resources/

The monthly index graphs go back to the early 70s and clearly show the effect of the very deep recession in the 73 - 74 period. I remember it well, I was in London and the FTOI 30 (predecessor to the FTSE 100) fell 73% to less than 500 !! The Dow lost 45% in the crash and took till 1993 to recover and exceed the 1972 highs in real terms !!!

Here is a quick summary of the 73 - 74 crash:

http://en.wikipedia.org/wiki/1973%E2%80%931974_stock_market_crash

Whats interesting about the the 73 -74 crash as graphed by the monthy indexes (above) is that the leading, coincident and lagging indexes mark the crash bottom in the correct time sequence.

And right now as of the last couple of months the leading index has turned distinctly up ...

Is it just a bear market rally or will we see over the next couple of months the coincident and lagging indexes turn up in sequence and confirm the 79 - 78 recession has bottomed ?? !!

Oil has come off its recent highs and broken its lower trend line .... is this a bad or good omen ??

Hopefully the next month or two will bring index clarity and point the way forwards to a recovery and a robust oil price.

Z

[The Big Ease]

Zorba, I have been in London for 3 years.
It has been pretty grim for about 9 months but the recovery is back on.
I have recruitment consultants calling me again, ads for banking jobs have been increasing and it won't be long until it feeds through.

The only thing I see on the downside in an immediate sense is the fear of what might happen rather than what is actually happening. The economic fundamentals have already started turning.

What this all means for stocks is up in the air, but it is a good bet that it will continue upwards for a little while yet.

[tricha]

Zorba, I have been in London for 3 years.
It has been pretty grim for about 9 months but the recovery is back on.
I have recruitment consultants calling me again, ads for banking jobs have been increasing and it won't be long until it feeds through.

The only thing I see on the downside in an immediate sense is the fear of what might happen rather than what is actually happening. The economic fundamentals have already started turning.

What this all means for stocks is up in the air, but it is a good bet that it will continue upwards for a little while yet.

The book I keep reading and the book u read Big Ease are worlds apart, maybe it because of the time difference.:rolleyes:


Low oil price pushes markets down


http://newsimg.bbc.co.uk/media/images/45854000/jpg/_45854348_007270425-1.jpg The Dow Jones fell in morning trade

Stock markets have seen large falls as weaker oil and metal prices weighed on commodity stocks, and a World Bank report dampened sentiment. London's FTSE 100 closed 2.6% lower at 4,234.05 points, with mining shares dragging the index down and oil giants BP and Shell also seeing falls.
German and French markets both shed 3%, while in the US, the Dow was down 1.9%.
The World Bank said it expected the economic growth of developing countries to slow this year.
It expects GDP in developing countries to grow by just 1.2% this year, compared with 5.9% in 2008 and 8.1% in 2007.
"The World Bank's forecast is certainly playing a role," said Luc Van Hecka, chief economist at KBC Securities.
"People were becoming perhaps a bit too complacent that most of the difficulties with the financial crisis were behind us. I see some cautious forces here and there."
Falling commodities
Russia's main stock index, the Micex, fell 8% as it felt the impact of falling oil prices, which make up a large part of Russia's economy.
US light, sweet crude oil fell below $67 a barrel.
In the UK, BP shares dropped 3.8% while shares in Royal Dutch Shell lost 4.7% of their value.
Mining stocks also saw heavy falls, pushed down by lower metal prices. Vedanta was the biggest faller, dropping 8.4%.
In France, steelmaker ArcelorMittal fell 6.9%, while in the US, aluminium firm Alcoa was down 7.6%.

[Dr_Who]

Good market for traders.

The more the market comes down the cheaper one gets its hands on stocks. Bring it on! :)

[Stranger_Danger]

For what its worth (basically nothing!) my personal opinion is that theres roughly a 20% chance we will fall off the mother of all cliffs very soon (ie next few weeks).

I don't *think* it will happen, but the pessimism in March turned very rapidly into exuberance, based on little more than "green shoots".

Such "confidence" has struck me more as bluster than confidence based on a whole lot of analysis or fundamentals. I think a lot of people are playing "follow the money", which is fine, but geeez I wouldn't want to be last out if they get scared again.

If you're in this market (and I am, but nowhere near 100%) then you better have some risk tolerance thats for sure.

[Dr_Who]

I am waiting for the right opportunity to start buying some good stocks.

Now, the problem is in the timing. When to buy is a critical point. Anyone have a crystal ball?

[Stranger_Danger]

Hmm am I right in thinking 3800 is pretty important if we close under this for a day or two. Phaedrus?

[Footsie]

The great market bottoms such as 32-33, 74 and 2002-03 all had re-tests of the lows which sent things down but not back to the same levels.

It looks like most major indicies are setting up for a head and shoulders bottom which would see things starting to pull out around later this year

This would be a much more healthly market bottom formatoin that what we currently have

Perhaps another 10% lower than here. so say 800 on Sp500.. That would complete the H&S

That would potential represent a great buying opportunity for those who missed the recent rally.

[Dr_Who]

I tend to agree with you Footsie.

Great opportunity to pick up some cheap stocks. Some of the resources in Aussie are looking cheap.

[shasta]

I tend to agree with you Footsie.

Great opportunity to pick up some cheap stocks. Some of the resources in Aussie are looking cheap.

Dr Who

Have a read of the GMI presentation out today, highlights the cut backs in the resource sector, in an effort to subdue the falling prices & match demand, basically trying to ensure better time ahead.

http://www.stocknessmonster.com/news-item?S=GMI&E=ASX&N=319552

Im not in GMI anymore, but they are a good yardstick for the resource sector.

[Dr_Who]

Thanks Shasta, that was a great presentation. Will reads more into it tonight when I have time.

[STRAT]

Have a wee look at whats going on on the other side. Talk about roller coasters :eek:


http://finance.yahoo.com/intlindices?e=europe

[tricha]

Whose got big enough balls to pick up some stocks today? :cool:

So what share are we buying or r u just full of BULL :D

[Dr_Who]

So what share are we buying or r u just full of BULL :D


If you pay more attention instead of dribbling the gloom and doom story all over the ST you may have noticed that I have been slowly picking up stocks like IRN, KZL, OZL, FPA etc... Also keeping an eye on a few others. My resource stock portfolio have done very well this year. Have been bullish on resource since the beginning of this year.

[trackers]

Looks like another down day ahead...You can always tell because all the forums go dead quiet! Dow down a pip, Oil up - Won't be enough to see some green though I don't think

[tricha]

If you pay more attention instead of dribbling the gloom and doom story all over the ST you may have noticed that I have been slowly picking up stocks like IRN, KZL, OZL, FPA etc... Also keeping an eye on a few others. My resource stock portfolio have done very well this year. Have been bullish on resource since the beginning of this year.

I think u r full of BULL...., what share have u bought in the last week.

I'm picking Hot Air ;)

[Dr_Who]

I think u r full of BULL...., what share have u bought in the last week.

I'm picking Hot Air ;)

KZL 60 cents in insto book build and 70 cents on market. Also bought FPA 66 cents and a few others i cant recall the top of my head. Very happy with both and will hold med/long term.

Hot air are free, stocks are not. :D

Interesting to note that Asia and Europe all up and Dow down.

[The Big Ease]

DOW playing funny buggers.
Good news continues on the durable good front. Economist tipped -0.9%, result was 1.8% up!

Market reacted positively before slipping back. Good news continues, stocks should follow.

[STRAT]

hey strat, reworked the count and concluded we are still in the major A wave up which i think will finish very soon.
there are multiple timeframe bearish divergences appearing as well as some interesting wave relationships.
on the weekly the rally is the most overbought since the bear market began
there is a major trendline approaching and channel line coming into play.
and as you rightly indicated there is a mounting bullish sentiment.

i do apologise but i cant be arsed to post a chart but will do it in the next day or two.Hi Dumbass,
Hows that chart lookin these days?

[tricha]

It's still rattling down the pipe and when the effect of the stimulas package is gone, slam dunk.:confused: to the states.
Will Australia follow suit, hopefully not.

Jun 26, 2009, 8:05 p.m. EST
Four banks fail, bringing 2009 tally to 44



Alert (http://www.marketwatch.com/tools/alerts/newsIndustry.asp?selectedType=7&industry=Financial Services) Email (http://www.marketwatch.com/news/story_email.asp?guid={A6B0AA9C-7320-4EF3-96D8-F5E2DD670BE4}&dist=emailMidSection) Print (http://www.marketwatch.com/story/story/print?guid=A6B0AA9C-7320-4EF3-96D8-F5E2DD670BE4)
By John Letzing (jletzing@marketwatch.com), MarketWatch
SAN FRANCISCO (MarketWatch) -- Four banks in Georgia, Minnesota and California were closed by regulators Friday, as the ongoing credit crisis continued to claim victims.
Villa Rica, Ga.-based Community Bank of West Georgia and Newman, Ga.-based Neighborhood Community Bank were closed, as were Irvine, Calif.-based MetroPacific Bank and Pine City, Minn.-based Horizon Bank. The closures brought the national tally this year to 44, and marked the ninth so far in Georgia.
The Federal Deposit Insurance Corporation said in a statement that it will mail checks to insured depositors at Community Bank of West Georgia on Monday. An institution able to assume the failed bank's deposits could not be found, the FDIC added.
Community Bank of West Georgia had $199.4 million in assets and $182.5 million in deposits as of May 15, according to the regulator, which said that at the time of the closing the bank had roughly $1.1 million in deposits that exceeded the $250,000 limit for insurance.
The FDIC estimated that the failure of Community Bank of West Georgia will cost its deposit insurance fund roughly $85 million.
Neighborhood Community Bank had $221.6 million in assets and $191.3 million in deposits as of March 31, the FDIC said.
The regulator said that West Point, Ga.-based CharterBank will assume National Community Bank's deposits, and that offices of National Community will reopen as branches of CharterBank.
CharterBank also agreed to buy $209.6 million worth of the failed bank's assets.
The failure of National Community will cost the deposit insurance fund $66.7 million, the FDIC added.
Minnesota-based Horizon Bank had $87.6 million in assets and $69.4 million in deposits as of March 31, the FDIC said. The failed bank's deposits will be assumed by St. Cloud, Minn.-based Stearns Bank, National Association.
The cost of Horizon Bank's failure to the deposit insurance fund will be $33.5 million, the FDIC added.
California-based MetroPacific Bank had $80 million in assets and $73 million in deposits, according to the regulator. The failed bank's deposits have been assumed by Tustin, Calif.-based Sunwest Bank.
The cost of MetroPacific Bank's failure to the deposit insurance fund will be $29 million, the FDIC said.
John Letzing is a MarketWatch reporter based in San Francisco.

[COLIN]

It's still rattling down the pipe and when the effect of the stimulas package is gone, slam dunk.:confused: to the states.
Will Australia follow suit, hopefully not.

Jun 26, 2009, 8:05 p.m. EST
Four banks fail, bringing 2009 tally to 44



Alert (http://www.marketwatch.com/tools/alerts/newsIndustry.asp?selectedType=7&industry=Financial Services) Email (http://www.marketwatch.com/news/story_email.asp?guid={A6B0AA9C-7320-4EF3-96D8-F5E2DD670BE4}&dist=emailMidSection) Print (http://www.marketwatch.com/story/story/print?guid=A6B0AA9C-7320-4EF3-96D8-F5E2DD670BE4)
By John Letzing (jletzing@marketwatch.com), MarketWatch
SAN FRANCISCO (MarketWatch) -- Four banks in Georgia, Minnesota and California were closed by regulators Friday, as the ongoing credit crisis continued to claim victims.
Villa Rica, Ga.-based Community Bank of West Georgia and Newman, Ga.-based Neighborhood Community Bank were closed, as were Irvine, Calif.-based MetroPacific Bank and Pine City, Minn.-based Horizon Bank. The closures brought the national tally this year to 44, and marked the ninth so far in Georgia.
The Federal Deposit Insurance Corporation said in a statement that it will mail checks to insured depositors at Community Bank of West Georgia on Monday. An institution able to assume the failed bank's deposits could not be found, the FDIC added.
Community Bank of West Georgia had $199.4 million in assets and $182.5 million in deposits as of May 15, according to the regulator, which said that at the time of the closing the bank had roughly $1.1 million in deposits that exceeded the $250,000 limit for insurance.
The FDIC estimated that the failure of Community Bank of West Georgia will cost its deposit insurance fund roughly $85 million.
Neighborhood Community Bank had $221.6 million in assets and $191.3 million in deposits as of March 31, the FDIC said.
The regulator said that West Point, Ga.-based CharterBank will assume National Community Bank's deposits, and that offices of National Community will reopen as branches of CharterBank.
CharterBank also agreed to buy $209.6 million worth of the failed bank's assets.
The failure of National Community will cost the deposit insurance fund $66.7 million, the FDIC added.
Minnesota-based Horizon Bank had $87.6 million in assets and $69.4 million in deposits as of March 31, the FDIC said. The failed bank's deposits will be assumed by St. Cloud, Minn.-based Stearns Bank, National Association.
The cost of Horizon Bank's failure to the deposit insurance fund will be $33.5 million, the FDIC added.
California-based MetroPacific Bank had $80 million in assets and $73 million in deposits, according to the regulator. The failed bank's deposits have been assumed by Tustin, Calif.-based Sunwest Bank.
The cost of MetroPacific Bank's failure to the deposit insurance fund will be $29 million, the FDIC said.
John Letzing is a MarketWatch reporter based in San Francisco.
They're extremely small banks!
Regional and community banks in America are about as common as hamburger bars, and individual failures are about as common in both industries, even in non-recessionary times.

[dumbass]

Hi Dumbass,
Hows that chart lookin these days?

updated thoughts on this thread Strat , pretty much going to plan.
market reversed at 958 and has posted the biggest retracement of rally , slightly dented bearish view from rally on Thursday.

259114
Click Me!

[STRAT]

updated thoughts on this thread Strat , pretty much going to plan.
market reversed at 958 and has posted the biggest retracement of rally , slightly dented bearish view from rally on Thursday.

259114
Click Me!Thanks Dumbass. You are fast becoming one of my favs around here.

[tricha]

They're extremely small banks!
Regional and community banks in America are about as common as hamburger bars, and individual failures are about as common in both industries, even in non-recessionary times.

Small but still failing and the big ones bailed, the States is in one hell of a mess, but for Australia a different kettle of fish.
That's what I bet on anyway. Australia to slowly decouple from the States and ride on the coat tails of China. But there are no gaurantees.

China's growth in doubt with lenders on a bender







David Uren, Economics correspondent | June 29, 2009

Article from: The Australian (http://www.theaustralian.news.com.au/)
THE strength of China's economy is seen by the the Reserve Bank and international institutions as the biggest source of hope for the Australian economy, but its growth may be less secure than they think.
The OECD raised its forecast for China's growth from 6.3 to 7.7 per cent in its economic outlook last week, while the World Bank lifted its forecast from 6.5 to 7.2 per cent.
Both the Reserve Bank and Treasury believe the global downturn will bring but a brief hiatus to China's growth, with the greater momentum of hundreds of millions of peasants entering the market economy carrying its economy forward.
They contend that rising productivity and living standards will repeat the pattern seen in the 60s in Japan and in the 70s in Taiwan and Korea, but on an incomparably greater scale. Australia's privileged position as China's preferred supplier of resources meant that it would hold on to most of the gains it had made from rising commodity prices, with its terms of trade permanently higher than the long-term average experienced from the mid-1950s until around 2004.
Treasury secretary Ken Henry made this point in a presentation last week, noting that Chinese demand for Australian iron ore and coal would keep our terms of trade strong.
"That means that terms of trade will be supportive of strong income growth in Australia in the next growth cycle," he said.
Certainly, Chinese demand for Australian resources has been behind the miraculous growth in our export volumes this year during the deepest trade slump since the 1930s.
However, new credit growth figures from China last week point to the potential instability of its recent economic performance. Bank lending in the first six months of this year is expected to reach almost 7trillion yuan, equivalent to $1.2 trillion, which would be more than double the growth of last year. In the first quarter, credit was growing at 300 per cent.
It is, as Standard Chartered China analyst Stephen Green put it, the most effective monetary easing in the world, leaving the bond purchases by the Federal Reserve Bank and the Bank of England in the shade.
"While many Chinese friends ask us anxiously about the US printing money, we wonder if those worries might not be better focused at home," he says.
After the first quarter's rapid growth, China's Banking Regulatory Commission instructed banks to slow their lending, and to ensure that loans were not used for speculative purposes. It repeated that warning last week. However, it is clear that the money is pouring into asset markets.

The Shanghai stockmarket is trading at 12-month highs, having risen by 71 per cent this year. Real estate turnover has surged and business investment, principally related to the stimulus package, is rising at rates in excess of 30 per cent.

Some of the credit boom is going into commodity markets. "The current surge in commodity prices is being fuelled by China's demand for speculative inventory," respected economist Andy Xie comments in a Chinese business magazine, Caijing.

He argues that bank loans have been so cheap that commodity distributors started arbitraging the difference between spot and futures prices.

"Now that price curves have flattened for most commodities, these imports are now based on speculation that prices will increase," he says, suggesting it is a bubble destined to implode.

Macquarie Bank has also questioned the sustainability of China's commodity purchases, given its stocks and production.

Besides the implications for inflation and bad debts, it is unlikely that a debt explosion can provide the footing for sustainable growth.

The World Bank's endorsement of China's growth prospects was hedged. It estimates that of the 7.2 per cent growth it forecasts this year, around 6 per cent will be a direct product of the government's stimulus package, which leaves the rest of the economy very anaemic.

It said there were limits to the role the stimulus could play, as government-influenced spending represented only a third of domestic demand in China. On its own, it was unlikely to lead to a rapid, broad-based recovery, given the global environment and the weakness of investment in China's market economy.

It noted that the focus of the stimulus package was investment and was doing little to fire domestic consumption. Apart from commodity exporters, it was doing little to stimulate the regional economy.

"It is too early to say that there is a sustained recovery in China. The policy stimulus allows China to continue to grow in this weak global setting. Nonetheless, there is a limit to how much and how long China's growth can diverge from global growth, given that China's real economy is relatively integrated in the world economy," the World Bank said.

That really goes to the nub of the problem. The OECD, in its economic outlook last week, maintained that China was in the vanguard of the global recovery, followed by India, Brazil and Russia, with the US and Japan picking up next while Europe lagged, tailed by countries like Estonia and Ireland. Australia is a winner from such a scenario, latching on to China's lead.

"Decoupling turned out to be a mirage on the way into the recession. But on the way out, it looks as if recovery will take hold in a staggered manner across countries," OECD acting chief economist Jorgen Elmeskov wrote.

But decoupling is likely to prove just as illusory on the way out. The OECD argued that the different levels of stimulus spending and the varying health of banking systems would shape the recovery. However, the world is too interconnected.

China cannot be expected to drag the US and Europe from their economic slough. Nor can China go off on a growth spurt all on its own. The US is a $US14 trillion economy, while Europe is about $US12 trillion -- combined they are about six times the size of China. The risk is that rather than proving a catalyst for recovery, stimulus spending in China, Australia and elsewhere is just a palliative that will leave economies in no better health and nursing huge debts.

[tricha]

[quote=tricha;262587]Small but still failing and the big ones bailed, the States is in one hell of a mess, but for Australia a different kettle of fish.
That's what I bet on anyway. Australia to slowly decouple from the States and ride on the coat tails of China. But there are no gaurantees.

Monkey see Monkey do, get those lifejackets on folks, the next wave is coming :eek: The green shoots were an illusion.

http://s.wsj.net/public/resources/MWimages/MW-AB105_payrol_MD_20090702110715.jpg
(http://www.marketwatch.com/story/jobs-are-lost-at-a-faster-pace-in-june)

[Dr_Who]

European market down over 3% over night. :eek:

Everyone jump ship. :D;)

[biker]

European market down over 3% over night. :eek:

Everyone jump ship. :D;)

Jump! Jump!!!!

(More bargains on the way :-) )

[dragonz]

I'll keep on trading. The'll just be shorts on downtreading stocks instead of longs on uptreading stocks.

Have set up Prime Mcquarie and IG Markets account that will act for this purpose.

[winner69]

Not much 'panic' today on the NZX .... hell even bell weather stock like NPX is up

[Hoop]

I watched the interview with Indra Nooyi** this morning. She was one interesting lady.

As she sees it.... Any Country east of the Middle East is doing just fine and presently have vibrant economies with good GNP growth. 70% of the worlds population live there. As the big economic countries shrink these "East of the Middle East" Countries are increasing their economic size to a point of being able to take up the slack. Many companies who are Global are targeting these new market areas to counter this recessionary slack demand from Europe and USA and doing very well because of it.

Indra Nooyi was quizzed about Japans growth (East of the Middle East) reciting the -4% GDP decrease in the last quarter as evidence.
..her response was that since the 1990's Japans growth has resembled a L-shape with no GDP growth ...she thinks Japan has very recently turned the corner with very positive signs of potential growth something that hasn't been felt there for a decade.

Latin America she says has vibrant economies as well.


** Indra Nooyi....CEO for Pepsico
At the Age of 53 she is Number 3 of the Top 50 most powerful Women in the World.

In March 2008, Nooyi was elected Chairman of the US-India Business Council (USIBC), a non-profit business advocacy organization representing nearly 300 of the largest US companies doing business in India and two dozen of India's global companies investing in America. Nooyi leads USIBC's Board of Directors, an assembly of 25 senior executives representing a cross-section of American industry
See Wikipedia (http://en.wikipedia.org/wiki/Indra_Nooyi)

Of Interest...
Japan's woeful GDP figures (http://www.economist.com/displayStory.cfm?story_id=13714174)

The Indian economy grew 6.7% in the year to the end of March 2009 but had grown by an average of 8.8% in the previous five years.India could achieve growth of 7% in the current year and more in coming years....
http://news.bbc.co.uk/2/hi/business/8130070.stm

[STRAT]

Yeah Hoop.
meanwhile back at street level in little ol NZ. I have found over the last 4 months many of the Contractor/Companies I deal with on a regular basis are securing contracts in the Middle East. Electrical, Construction specialties and Consultants etc. Seems like every time I ring someone these days thay are unavailable cause they are over there:rolleyes:

[dragonz]

Not much 'panic' today on the NZX .... hell even bell weather stock like NPX is up

ASX market is being whipped:eek:

[drillfix]

Well, what to believe, where are we, where are we going, or when & what this & when and what that.

Sounds like a poem but probably just another way to describe the nature of the beast of the market.

Check this out for some more reading if one is inclined:
http://www.hubb.com/articles/2009/hubb_ArticleJune_1.asp?page=outlook

This was posted a few days ago via email to a slight days old or so, but reflects what may come about.

In brief, Tom Scollon believes markets could very potentially play out like this.

Kinda where we are now:
http://www.hubb.com/images/charts/2009/June/chart3_June2009_lrg.gif

And then the: where we may find ouselves type prediction:
http://www.hubb.com/images/charts/2009/June/chart4_June2009_lrg.gif



Anyways, make of it what you may~! ;)

[Phaedrus]

ASX market is being whippedStand back a bit Dragonz and it just looks like business as usual. No need to panic yet!

http://h1.ripway.com/78963/AllOrds73.gif

[JBmurc]

Well for a large down day on the DOW- my ASX portfilo as a whole held strong today....

-Checkout my new link on obama- I personal never trusted the guy

[winner69]

Stand back a bit Dragonz and it just looks like business as usual. No need to panic yet!

http://h1.ripway.com/78963/AllOrds73.gif

ASX200 weekly close at 3828 keeps a short term uptrend (on a weekly basis) that started back in April intact (Phaedrus's dark green lines)

ASX200 was down 2% over the week and is anout 6% down from yhe high a few weeks ago

Another fall next week and caution would be warranted .... lets see what happens but no reason to panic just yet

[tricha]

Looks like, u and Phaedrus hold pass the parcel :eek:

[AMR]

Tricha it is one -2.6% day...against a 30% rally this year!

[winner69]

Tricha .... just for you

http://informationclearinghouse.info/article22976.htm

[tricha]

Tricha .... just for you

http://informationclearinghouse.info/article22976.htm

Exactly, what did the last bit say winner69 :confused:

Household wealth has slipped $14 trillion since the crisis began. This includes sizable losses in investments, real estate and retirement funds. Home equity has dropped to 41% (a new low) and joblessness is on the rise. When credit was easy; borrowing increased, assets prices rose and the economy grew. Now the process has gone into reverse; credit has dried up, collateral values have plunged, GDP is negative, and consumers are buried under a mountain of debt. Personal bankruptcies, defaults and foreclosures are all up. Deflation is everywhere. It will take years, perhaps a decade or more, to rebuild household balance sheets and restore the flagging economy. The consumer is running on empty and the chances of a robust recovery are nil.

[The Big Ease]

a robust recovery?
sure, what about just an ordinary recovery? it's on the cards and the recession is likely to have ended already in the US.

[Hoop]

Tricia + other "C" wavers waiting for the big crash... please note that you all are expecting something that is a very rare event... such as that occurred in the 1929-1933 Great Depression

To have this rare event crash to come true.... many economic conditions have to be met.

I have listed only some as these are the only ones I can remember at the moment


1 A sharp reversal in the recent commodity cycle (raw materials needed for manufacturing) hasn't happened... still in uptrend (even the laggard Aluminium is showing signs of kicking up).

2 Increasing value in the superpowers currency (the world only has one at present the USA) not happening as US$ in primary downtrend.

3 Other bit players (countries) need to be in recession as well e.g BRIC are in growth phase....not happening

4 Persistent Deflation or Inflation more than -10% or more than +10% /annum respectively from all major economic powers..not happening.

5 Jobless numbers more than 20%(depression indicator)..not happened yet.

6 Large wage/salary cuts of +20%(depression indicator)...not happened yet

7 Negative spot interest rates...not happened (got close in USA in 2008)

8 Signs of Political/social anarchy from a larger proportion of the population (looting, public destruction of property, public giving the middle finger to Govt/business structural systems, break down of Laws and social systems etc) resulting in huge social costs....not happened. very minor event in Asia with Rice rioters in 2008

9 Major Seizure on a global scale / abnormal blockage of credit movements/ systemic breakdown etc... happened in early 2008 but quickly remedied...not happening now...meltdown been adverted.

10 Protectionism increased dramatically / draconian trade tariffs and other import taxes...increased marginally

11 Currency barriers greatly increased....not happened

12 Major Government job relief schemes introduced (Depression indicator)(Note:.lessens the jobless statistical figure)..not happened yet

13 Major property slump more than 30%...Yes... already happened... in USA (and Britain?) Note: happened in 1932.. well after the 1929 crash. This time it happened during the 2008 -2009 crash ..this time the timing is different


These types of economic indicators and many others not mentioned happened after the stockmarket had partially recovered from the 1929 crash before and during its C Wave death spiral.

As at 4 July 2009 you have to ask yourself .."Is there imminent threat from these indicators happening at this moment or in the next few weeks...if your answer is no then you should not expect a sharp downtrend to a new bottom on the Equity sShare markets within this time neither.

Asteroid hitting Earth ..a plague killing 30% of the worlds population or some other Catastrophic Black Swan event and all bets are off.

[lakedaemonian]

Tricia + other "C" wavers waiting for the big crash... please note that you all are expecting something that is a very rare event... such as that occurred in the 1929-1933 Great Depression

To have this rare event crash to come true.... many economic conditions have to be met.

I have listed only some as these are the only ones I can remember at the moment


1 A sharp reversal in the recent commodity cycle (raw materials needed for manufacturing) hasn't happened... still in uptrend (even the laggard Aluminium is showing signs of kicking up).

2 Increasing value in the superpowers currency (the world only has one at present the USA) not happening as US$ in primary downtrend.

3 Other bit players (countries) need to be in recession as well e.g BRIC are in growth phase....not happening

4 Persistent Deflation or Inflation more than -10% or more than +10% /annum respectively from all major economic powers..not happening.

5 Jobless numbers more than 20%(depression indicator)..not happened yet.

6 Large wage/salary cuts of +20%(depression indicator)...not happened yet

7 Negative spot interest rates...not happened (got close in USA in 2008)

8 Signs of Political/social anarchy from a larger proportion of the population (looting, public destruction of property, public giving the middle finger to Govt/business structural systems, break down of Laws and social systems etc) resulting in huge social costs....not happened. very minor event in Asia with Rice rioters in 2008

9 Major Seizure on a global scale / abnormal blockage of credit movements/ systemic breakdown etc... happened in early 2008 but quickly remedied...not happening now...meltdown been adverted.

10 Protectionism increased dramatically / draconian trade tariffs and other import taxes...increased marginally

11 Currency barriers greatly increased....not happened

12 Major Government job relief schemes introduced (Depression indicator)(Note:.lessens the jobless statistical figure)..not happened yet

13 Major property slump more than 30%...Yes... already happened... in USA (and Britain?) Note: happened in 1932.. well after the 1929 crash. This time it happened during the 2008 -2009 crash ..this time the timing is different


These types of economic indicators and many others not mentioned happened after the stockmarket had partially recovered from the 1929 crash before and during its C Wave death spiral.

As at 4 July 2009 you have to ask yourself .."Is there imminent threat from these indicators happening at this moment or in the next few weeks...if your answer is no then you should not expect a sharp downtrend to a new bottom on the Equity sShare markets within this time neither.

Asteroid hitting Earth ..a plague killing 30% of the worlds population or some other Catastrophic Black Swan event and all bets are off.

#4,#5,#6 = See shadowstats.com

Government produced deflation/inflation/unemployment/underemployment numbers simply cannot be trusted.

#9,#10,#11

The US/UK/EU attempting to sink Switzerland as a global banking centre in order to keep themselves afloat is more than just slightly ominous.

And the financial sabre rattling from BRIC in regards to a realignment of the global reserve currency has been increasing in volume, not decreasing.

Just my 0.02c

[tricha]

#4,#5,#6 = See shadowstats.com

Government produced deflation/inflation/unemployment/underemployment numbers simply cannot be trusted.

#9,#10,#11

The US/UK/EU attempting to sink Switzerland as a global banking centre in order to keep themselves afloat is more than just slightly ominous.

And the financial sabre rattling from BRIC in regards to a realignment of the global reserve currency has been increasing in volume, not decreasing.

Just my 0.02c

Depression coming for the States, hopefully BRIC pulls us out of recession as the world decouples. That's my prediction for this terrible mess.


JULY 3, 2009
California Lays Plans to Issue IOUs to Creditors

http://online.wsj.com/article/SB124648274812182537.html?mod=mktw
http://s.wsj.net/public/resources/images/NA-AY708_STATEB_NS_20090701221811.gif

[winner69]

tricha .... do you read www.dailyreckoning.com

I enjoyed that article 'Buy Stocks! at Dow 4000" and their rave on mancession

[winner69]

That "MANCESSION' in the US may have some other consequences beside the impact on the the US economy methinks

One article
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6445913.ece

Won't sleep tonight knowing the ;fragile girl' is fighting back but at least mean outstripping women in some fields - there are more felons, more alcoholics, more drug addicts – and they generally die first.

Obviously Palin is getting lined up for the presidentcy in 2012 ....

[Dr_Who]

This tug of war between the genders have created alot of single middle aged and the elderly who spend huge amount of money on their pets and gardens instead of others around them.

We end up with a society entrenched in a lonely life filled with high fences, pampered pets that is used to having $100 haircuts, nosy neighbours who complain too much and lack of community spirit.

Back on topic. I think the next round will concentrate on corporate earnings. Wait for more downgrades guys.

[tricha]

tricha .... do you read www.dailyreckoning.com (http://www.dailyreckoning.com)

I enjoyed that article 'Buy Stocks! at Dow 4000" and their rave on mancession

Yes I read it Winner69 and read between the lines.

And I read from Phaedrus

Originally Posted by Phaedrus http://www.sharetrader.co.nz/images/buttons/viewpost.gif (http://www.sharetrader.co.nz/showthread.php?p=263286#post263286)
Stand back a bit Dragonz and it just looks like business as usual. No need to panic yet!

Looks like all the bulls have stayed in bed today :confused:

[AMR]

Come on Tricha stop quoting outdated comments. His system has already turned red.

[winner69]

Looks like all the bulls have stayed in bed today :confused:


............ jsut having a nap ... all refreshed for the next step up

[ratkin]

hows the golden triangle ? havent seen any new charts with multicoloured crayons for a few days

[winner69]

hows the golden triangle ? havent seen any new charts with multicoloured crayons for a few days

After a 3.5% rise today they may come out again .... with some light green showing .... another few days and ASX200 at 4000 might even happen

[dragonz]

After a 3.5% rise today they may come out again .... with some light green showing .... another few days and ASX200 at 4000 might even happen

The market is treading at the moment. This is where most of the mistakes are made (regardless of whether you are a fundie or tech trader). Better to look at individual sectors to decide where to put your hard earned cash. If anywhere. Remember that there are all sort of tools (shorts, indexes, forex) that are still trending therfore offering better possibilities.

Just a thought :D

[winner69]

ASX up mre than 1% already today and over 3900 .... all the last few weeks falls recovered .... its all up from here

[Footsie]

HI winner

as at Monday, things were starting to look quite bearish and my chart indicators had all turned negative, but this 4.5% rally in 2 days is quite convincing and if it can hold id say from a TA perspective things would be looking +ve again.

The septics seems to have got things going again. Looking for the DOW to close over 8410 tonight.



If aussie gets over 4,000.... a target could be 4,300

[Lego_Man]

Nah you've got it wrong. Wave chart says we're headed for armageddon, reality will bend to ensure this happens.

Expect a meteor to materialise over New York in the next couple of weeks if the markets havent headed south of their own accord.

[The Big Ease]

this is the steepest rally since the recovery started in March.

[winner69]

HI winner



The septics seems to have got things going again. Looking for the DOW to close over 8410 tonight.



If aussie gets over 4,000.... a target could be 4,300

Bit pessismistic there footsie .... might be 8600 ... ha ha

And the ASX200 will go over 4000 again heading for 4400 in early August

Phaedrus chart will have green lines on it now

[ratkin]

Where are all the "its 1929" people?

This latest rally must be very scary for the bears. They could quite easily claim the april rally was just a dead cat bounce , this latest surge will be harder for them to explain away.
Colin Twiggs in his incredible charts update is one who has been beating the bear drum , only two days ago he was seeing disaster in his charts

[Dr_Who]

Bull market! :)

Welcome to BOOM town.

[STRAT]

Steady on chaps.
Ratkin, Three days ago the chart did look bad.

The last three days do look nice I do agree but its only three days.

So Goldman Sachs made a killing on the share Market last quarter. No surprises there. So did most of us. Besides, they probably had a hand in creating the rally in the first place

It will only take a bit of bad news for the herd to go rushing back to the other side of the paddock.

[The Big Ease]

in advance of Mr P's charts, isn't this sort of bounce back after a correction what you look for to confirm an new uptrend?

From watching bloomberg for the past 3 weeks, the correction has been on very little volume on the DOW, so not particularly convincing in terms of people heading for the exits.

If we exceed last month's highs soon, then it will be up and away for some time.

[Footsie]

With the VIX back at such low levels

a rally of this power is not just volatility.

Its quite a convincing sign that the bear market is now moving further and further behind

Another positive is that the recent pullback was only around 8-10%..... nothing major and quite normal for a new bull.

Its often the case in a new bull market that there will be plenty of sceptics

Put it this way, what would happen if we had no sceptics?


My gold mining junior (SLR) should have a ripper today!!!

Mr P, pleasse post an update

[STRAT]

From watching bloomberg for the past 3 weeks, the correction has been on very little volume on the DOW.Hi TBE. Less volume but I wouldnt say very little and volume has been dropping off since the beginning of the rally in March.
Agree its a very good sign but oh such a short time frame

[The Big Ease]

quite right strat.
Thanks for the chart.

[Phaedrus]

While still a "work in progress" a chart such as this leaves little room for doubt as to whether you should be in the market at the moment. At its simplest, you should not be entering when it is red and want to be in when it is green.
I see no need to make the big calls - all you need to do is act appropriately each day according to the situation as it presents itself. Bull market Bottom or Bear rally? Who knows? Who cares!
This is a pretty volatile market, though. See how it went straight from "weak" to "strong" without the usual magenta "strengthening" phase between.

http://h1.ripway.com/78963/AllOrds716.gif

I wont be posting anything for a little while. After one frost too many, Mrs P and I are fleeing the wintry weather.

[Dr_Who]

Commodities will go gangbusters today on the ASX.

[trackers]

Hmmmm what to buy?? Kicking myself for waiting on the sidelines all week being indecisive... oh well these things happen.

Oil up, DOW up a crap load... Maybe a re-entry into TAP @ 1.10

[JBmurc]

As my portfolio is 100% commodities bring on todays market ASX futures 72+ so well though 4000 maybe even 4100 today
Inflation starting it's march forward -investors holding cash will be the worst off going forward(as they have been over the last couple months)
All the cash that fundies have put into short term cash sect, bonds etc will soon have to enter the market -fund managers lose clients if they don't show decent growth esp. when markets are going up 5% in a week
With so much fiat cash created of late the next bull commodity market will be even stronger with less cheap commodities,with an a ever growing easy cash world wanting them...it's a no brainer fear is turning to greed

[Hoop]

Nice chart Strat....nice formation of the inverse head and shoulder pattern in progress..Do you see it??... the right shoulder formation seems close to being completed doesn't it?..although a upward move through 9000 is required to complete the inverse head and shoulder pattern a rather bullish scenario seems to be is emerging as times go by with this "expected" large correction failing to occur .. just by the fact that the DOW doesn't seem to have that huge selling pressure needed to bust through that 7900 - 8400 resistance zone look..each day adds a little more to that right shoulder formation.

Note:- correction... a downward phase within a Bull Market.

Volume trending down Strat...yeah true.. but how much of this is due to the "Sell in May and go away" holiday investor people, who will all be back at work, refreshed and suntanned next month.

Speaking on the topic of refresh... Winner...r u all nicely refreshed after your little nap? :D


Below is a copy of my post #404 2 months ago dated 15th May 2009 from the DOW Thread (http://www.sharetrader.co.nz/showthread.php?t=6114&page=27). Notice that my orange inverted H&S was predicted to happen back in May and has been progressing according to plan since then.

As you can see nothing much has happened since then....this predicted trading range (a wavy L-shape.. typical Bull market phase 1 cycle behaviour) has been rather boring really.. unless one gets all excited and paranoid at the same time from listening to this very loud conflicting Media noise.





----------------------------------------------------------------------------------------------------------------------------------------------------


Post #404 15 May 2009
Add another way Doc....sideways.

I've been mentioning this strong 7900-8400 resistance band for a while now.
The DOW has fallen back within this band again:(. It tried to break out last night (intraday high 8377) but failed to close at 8331 (+44).

The market is skittish atm and the two forces may be fighting either other for a little while ....thus ...that possible sideways trading pattern scenario.

Re: the charts it wouldn't surprise me to see trading range averaging between 7900-8400 with Max High 9000 and Min Low 7500)

If the DOW got inundated with immense selling pressure and some how does break down through that very strong 7900-8400 zone all is not lost until...
.... the DOW fell below the November2008 bottom that of the 7500 major support mark....this would upset that bullish inverse head and shoulder pattern that the DOW is presently setting up....

Then again the future usually proves me wrong....so I am ready to jump one way or the other, if my assumption proves to be wrong.
....accompanied with heart attack material each time it heads down to test 7900 or (mid7800)...and ultimately if it happened the heart pounding test of the November low (7500)

http://i458.photobucket.com/albums/qq306/Hoop_1/DOWheadandshoulder.png

[ratkin]

Have you had too much acid ??????????

[Footsie]

Hoop

I just read your post from 4/7 re your 10 or so points why we wont have the "c" wave

Very pertinent.

As i've said before you have called this cycle the best of anyone on ST.... and better than Marc Faber etc IMHO

well done again.

[Lego_Man]

Have you had too much acid ??????????

Looks more like an eccy to me.

Either way, i hope the market will be giving us some love.

[ratkin]

I thought it looked like a wolf on a spacehopper . Maybe im the one whose tripping ?

[Abracadabra]

Thanks for updating the chart. Hope you have a good break away.

[Hoop]

A special treat from Uncle Hoop for the 2 children on ST
an updated version of Eccy "the acid man":):):rolleyes:

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW16072009.png

[ratkin]

Why is his right arm bleeding? It wasnt in the other picture

[Lego_Man]

He busted a vein shooting up heroin...

[tricha]

Looks like China is going to pull OZ out of this mess. Will the rest of BRIC do the same ? As the world slowly de-couples from the States.

China grows faster amid worries

http://news.bbc.co.uk/2/hi/business/8153138.stm
.

ANALYSIS
http://newsimg.bbc.co.uk/media/images/46066000/jpg/_46066554_jex_410347_de27-1.jpg
Chris Hogg, BBC Shanghai correspondent
China's economy is recovering earlier than many had expected.
That's largely due to the government's massive economic stimulus package unveiled last November, but the private sector is doing its part too.
China's state controlled banks have lent huge amounts of money to the country's state owned and private sector businesses.
Companies have used the cash to try to avoid shedding jobs and to invest in new equipment.
The many new government infrastructure projects have provided employment for many of the migrant workers who have been laid off - mainly in the export sector.
The slowdown elsewhere in the world means exporters are still suffering, but the rest of China's economy is in much better shape.

[winner69]

Bit pessismistic there footsie .... might be 8600 ... ha ha



A day later and nearly 8700 (whoops over 8700) ..... another good day on the ASX today i'd say

[Dr_Who]

I still believe Aust will get a V shape recovery with many thanks from its Asian neighbours.

[STRAT]

Why is his right arm bleeding? It wasnt in the other pictureHes lucky thats all the burst after hanging upside down for 10 months.

I can see it uncle Hoop but Im a little concerned. He appears to have grown a new head out of the old one :eek: Pehaps that is also from hanging around upside down for so long :D

[Hoop]

Hes lucky thats all the burst after hanging upside down for 10 months.

I can see it uncle Hoop but Im a little concerned. He appears to have grown a new head out of the old one :eek: Pehaps that is also from hanging around upside down for so long :D

Eccy can hang around upside down for as long as he likes:cool::cool:.....if he flips around and becomes the right way up, that will be the time I get my worry beads out :(

...actually he did have a litle H&S friend who looked like he'd been flattened by a steam roller and he was unfortunately the right way up:(...the analysts commented on this little chap last week and he did upset the marketplaces around the world with negativity..this little bugger forced me to sell down my portfolio at the end of last week:mad:...however his little right shoulder broke on Wednesday (15th) so that hopefully is the end of him :D:p:p:p

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW16A072009.png

[tricha]

I still believe Aust will get a V shape recovery with many thanks from its Asian neighbours.

Lets hope :confused:

Decouple and move on. :D

[dragonz]

Lets hope :confused:

Decouple and move on. :D

What does decouple mean :confused:

[tricha]

What does decouple mean :confused:

It means, the USA is an island,.:eek:

[dragonz]

It means, the USA is an island,.:eek:

OK Tricha I think I know what you mean. What yiur saying is its time we look elsewhere for our economic influences.

Its interesting to note that China, Spain and other bodering on 1st world countries have had a rising idex (stock market) as compared to our bear.

[biker]

his little right shoulder broke on Wednesday (15th) so that hopefully is the end of him :D:p:p:p



I think you mean his left shoulder, or is having eyes in the back of your head normal for TA?

[tricha]

OK Tricha I think I know what you mean. What yiur saying is its time we look elsewhere for our economic influences.

Its interesting to note that China, Spain and other bodering on 1st world countries have had a rising idex (stock market) as compared to our bear.

Oh yeah Dragonz and when Australia figures it out, it's game on again.
The "lucky country" will be booming again.

[winner69]

A day later and nearly 8700 (whoops over 8700) ..... another good day on the ASX today i'd say

Footsie said maybe 8600 and it went to 8700 ....

..... and it keeps going up .... over 8800 now

So another great day on the ASX again today and probably go over 4100


Reporting season will be positive for the market cause things will be less worse than thought

[Dr_Who]

Indicators are showing the US recession is over.

Bullmarket!

[The Big Ease]

Remember this chart from ECRI @ businesscycle.com?

http://www.businesscycle.com/files/ecri_data/monthly_indexes.gif

Well the leading indicator is showing a v shaped recovery and quite an emphatic one too.

As you can see, it hasnt been wrong for 30 plus years.

There are a host of other leading indicators all pointing up as well, including the 90% pus accurate coppock indicator.

Look forward to economists hastily revising their projections. They are almost always wrong. Why else would Roubini be so famous for getting it right? Shouldnt there be more than a handful of economists to have seen this coming?

[STRAT]

There are a host of other leading indicators all pointing up as well, including the 90% pus accurate coppock indicator.
I dunno TBE. 90% pus sounds pretty bad :eek:

[winner69]

Jeez ..... DOW might hit 9000 today or tomorrow

ASX didn't do too well yesterday so has a lot of catching up to do today ... watch it fly today

[COLIN]

There are a host of other leading indicators all pointing up as well, including the 90% pus accurate coppock indicator.


Please reassure me that the word is definitely not a mistype for "poppycock".

[ratkin]

Can anybody remember a more suprising month than July 2009 ?

We all expected the april rally would fizzle out , implode or at best just go into a long sideways market.

Here we are with ten straight updays on the NASDAQ the first time this has happened for twelve years. Who would of thought it?

[The Big Ease]

Please reassure me that the word is definitely not a mistype for "poppycock".

definitely not :)

look it up. It has fascinating origins.

[tricha]

Can anybody remember a more suprising month than July 2009 ?

We all expected the april rally would fizzle out , implode or at best just go into a long sideways market.

Here we are with ten straight updays on the NASDAQ the first time this has happened for twelve years. Who would of thought it?

Yes, who would have thought. China is doing the business and dragging us along.
Australia's mining boom set to continue again, the recession in Australia is all but over.:p
The States is a different story, but it is looking like it will get better :confused:

China copper imports jump as prices soar 80% this year

NEW YORK (MarketWatch) -- China's copper imports in the first half of the year jumped nearly 70% from a year ago, the country's customs data showed Wednesday, as copper prices soared 80% this year to their highest level in nine months.
China imported 478,000 metric tons of copper last month, up from May's 422,000, according to the newly released monthly data. Total imports in the first half stood at 2.235 million metric tons, up 68.9% from a year ago.
Rising demand from China, the world's biggest copper consumer, has likely pushed up copper prices. September copper futures rose more than 3% Wednesday to as high as $2.5325 a pound, up 80% this year and standing at the highest level since mid October.
Rising imports from China likely contributed to the drawdown in copper inventories at the London Metal Exchange. LME copper inventories dropped 74,600 metric tons in the first six months.
The sharp increase in imports is "mainly attributable to China's reserve purchases, arbitrage transactions between the LME and the Shanghai Metal Exchange and China's massive infrastructure spending," said Barbara Lambrecht, an analyst at Commerzbank.
However, "metal imports should already decline sharply in July, since China's State Reserves Bureau should have almost achieved its goals regarding amounts they intended to purchase," she said, adding the massive increase in prices can make "further purchases less sensible."
Last week, U.K.-based research group World Bureau of Metal Statistics reported the global copper market recorded a surplus of 90,000 metric tons during the first five months of this year, compared with a deficit of 170,000 metric tons the same period a year ago.
Consumption in the first five months stood at 7.47 million tons, down 3.2% from last year. China's consumption, however, jumped 42% to 3 million metric tons, as the country built up its copper strategic reserves
Meanwhile, China's crude oil imports fell to 16.61 million metric tons in June, or 4.06 million barrels a day, from 17.09 million in May. Total imports in the first half stood at 90.77 million metric tons, up 0.3% from a year ago.
Imports of petroleum products such as gasoline and diesel rose to 3.59 million metric tons on June, up from 3.34 million in the previous month.
In futures trading in New York, September crude fell 1.7% to $64.52 a barrel, moving lower for the first session in six.
The United States Oil Fund /quotes/comstock/13*!uso/quotes/nls/uso (USO (http://www.marketwatch.com/investing/fund/USO) 34.79, -0.15, -0.43%) fell 0.3% to $34.82 Tuesday.
Moming Zhou is a MarketWatch reporter based in New York.

[Footsie]

Tricha is turning bullish

Should we be worried?

Probably not yet.

She isnt quite as bullish as she was bearish yet :)

[JBmurc]

Personal I'll be looking at selling down 20%-30%of my short term portfolio down before Oct09 I'm picking the market to keep upwards to flat till late sep-oct where there will be another large downward trend....then once the doomsdayers are bleating their doom I'll be buying again

[COLIN]

definitely not :)

look it up. It has fascinating origins.

Thanks. Yes, fascinating, particularly the bit about market downturns being like periods of mourning after a bereavement.
And we can be encouraged by the old saying that "time heals the deepest wounds". Trouble is, people forget too readily. Some of us, who witnessed the aftermath of the 1980's excesses, had forgotten a lot of what we thought we had learnt then, and we succumbed to the same irrational exuberance 20 years later.

[macduffy]

Thanks. Yes, fascinating, particularly the bit about market downturns being like periods of mourning after a bereavement.
And we can be encouraged by the old saying that "time heals the deepest wounds". Trouble is, people forget too readily. Some of us, who witnessed the aftermath of the 1980's excesses, had forgotten a lot of what we thought we had learnt then, and we succumbed to the same irrational exuberance 20 years later.

That's true, Colin.

But think of all the fun we had and money we made in the meantime!

;)

[tricha]

Tricha is turning bullish

Should we be worried?

Probably not yet.

She isnt quite as bullish as she was bearish yet :)

Turning bullish, yes, Asia to the rescue

On the other side of the coin. Looking West. it's a totally different picture.

Hyundai posts record quarterly profit



23rd July 2009, 14:15 WST


South Korea’s largest automaker Hyundai Motor has reported its highest-ever quarterly net profit despite the global economic downturn.
Hyundai said net profit in April-June was 811.8 billion won ($A795.14 million), a 48 per cent rise on 546.9 billion won for the same period in 2008.
Operating profit fell 0.8 per cent year-on-year to 657.3 billion won from 662.5 billion, due to higher marketing costs and lower exports due to the global recession.
Declining exports also dragged sales down 11 per cent to 8.08 trillion won from 9.107 trillion.
The record net figure was aided by shareholding gains from affiliates in China and India and tax incentives that boosted sales at home.
Hyundai's domestic sales rose 15 per cent year-on-year to 63,718 in May and 55 per cent to 74,685 in June thanks to the tax breaks.
The company, which had 51 per cent of the domestic automobile market in the first half, is targeting 52 per cent in the second half by focusing on sales of new models such as the midsize YF Sonata sedan.
AFP