Agree - and here is the link to make it easier to find the chart:
https://www.sharetrader.co.nz/showth...l=1#post956086
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Agree - and here is the link to make it easier to find the chart:
https://www.sharetrader.co.nz/showth...l=1#post956086
Easy.
If you are brave and if you believe the bear will stay around: stay in cash and / or buy ETF's shorting share indices like e.g. BEAR, BBOZ or BBUS!
Obviously - make sure you don't miss the bottom ... same as with the top, there is no bell ringing to wake shorters up.
For investors or more faint hearted traders: Buy companies with pricing power producing stuff people need .... and keep plenty of cash in safe locations (NO - not under the mattress ...).
One last thing ... they say don't panic, but if you must, panic early (which may or may not be already too late).
Good luck ... and don't panic ... s. above
I posted this on 27th April Post #10716. (edit:..Sharetrader has chart display problems :mad ;: if you can't see the chart please click the link) read the purple text near the right hand bottom of the chart.
NZ50C index's yesterdays close was 4,550.6899 lets round that up to 4551 shall we.
The difference between a Technical Bear and Official Bear Market Cycle is you have the earlier knowledge of the NZX50C index's current trading behavioral pattern....that is the index's behavior will be similar to that of a bear. Observing the Technical Bear can give you fore-warning to be cautious and change one's investment strategy ... Waiting for it to become an official Bear Market Cycle could be and usually is very costly (a more or less 20% dent to your portfolio)..Waiting also creates an investment "locked in" dilemma..."I've lost 20% so I don't want to sell and realise the loss but if I don't sell the market could go down further and if I do sell the market could rally without me...
A Bear's behaviour that investors should know about:
1..Loveable and cute at first until it gets cranky and throws a hissyfit,.
2..Bears are dangerous and destructive animals.
3..A bear's temperment is highly volatile and when in a rage it displays gross irrationality. In between the rages the bear seems calm, playful and friendly.
4..Bears have a great sense of smell and can sniff out animals that are hiding. They can even climb trees.
5..Bears are Omnivores. Their diet is eat anything.. quote from faunafacts..."....A bear’s diet can change to adapt to the weather or habitat it’s in. For example, when bears leave their dens in the spring post hibernation, it’s not uncommon for them to exist on a diet of available berries and winter-killed carrion like moose, deer, or fish...."
Now with the investor armed with this knowledge..what is the best and safest the answer to this question.."If you were walking in the woods one day and saw a bear roaming the same woods, what should you do...Ignore the bear and keep walking? go up to the bear and give it a hug? hide? turn around and leave the woods and come back when the bear is gone?"
Giving the bear a hug might seem a ridiculous answer but from the various investing forums it seems many hug the bear by using the buy and hold strategy during both Bull and Bear Cycles.
The stock market will definitely go lower from here, unless it goes higher, which it might; but only if doesn’t go lower. Which it shall, unless it doesn’t… then it won’t.
Alokdhir..in answer to your question. We are seeing the bears claws and the mauling of investors..Remember the bear is irrational (fundamentally my quote:..The bear can't count)..We maybe be near Bear market Cycle phase 2 which sees the bear calming down for a while and investors will come out of hiding and create a relief rally just how large any relief rally is depends on the news..all you need to know is the market is still a bear and the next tantrum will create a lower low..
Perhaps 4500 is the point where investor relief starts..time will tell.
If a rally starts from 4500 expect disappoints on the way.. Don't expect it to go through many resistance levels. Most bear rallies fail at the next major resistance level (4800)..There are a lot of minor resistance levels above 4800 so the index has to have powerful buyer momentum to push through all those resistances to reach 5050. Although anything is possible it is asking a bit much when in the NZ50C is a bear......that's the statistical result fact
From my post #10716 The descending triangle pattern formed during a down trend is considered a continuation pattern in other words the chances of the NZ50C index breaking out below the triangle pattern has far greater odds than breaking out through the top..
How is this worked out?...Many people do statistical analysis of 10 of thousands and maybe hundreds of thousands of each pattern to determine the odds..One of these people has book and Bulkowski's The Pattern Site is must see for anyone interested in TA charting.
To get a basic understanding of charting..Charting displays the past up to the present day of all buyers and sellers grouped together..This is the psychological trading behaviour in a graphic form. Strangely most people believe in the written alphabetic form but most dismiss (skeptic) the numeric or visible form ..even though they believe that a picture can be worth a 1000 words.
Predicting in charting is based on the results of 10 or 100 of thousands of past results to obtain a statistical result (probability of a happening).
My chart shows a descending triangle breakout and the statistical probability of after the fall buyers start to become excited again (psychological) and start to influence the market with their buying. with NZ50C that should start around the 4500 level..This is as long as there isn't any sudden bad news...this could be the Stage 2 developing when we see an end to the latest sharp drop and replaced with a few sucker rallies Usually during a Bear Market Cycle (early stage 1 phase) it takes a while before investor denial dissipates ..The media displays peoples feelings so when people are in denial the news is usually more optimistic than it should be and we hear more good news than bad news..
We have reached the point of the Bear Market cycle (late phase 1) where the investors are starting to realise..so the denial is dissipating..the media reacts according and starts to publish more bad news than good news and so the fulfilling prophesy begins with capitulation waves before the commencement of Bear Market phase 2 which sees investor relief after the capitulation waves. On the chart it is easy to see the Bear Market phases because of its vision showing the past behaviour..but when the Bear Market Starts at that time it is impossible to see it as it looks like one of many bull market cycle corrections..It's only when the Bear Market cycle matures towards stage 2 that we get the feeling that the bull might be dead..
Thanks heaps for your post Hoop
Thanks Hoop. Well worded :t_up: