Archive through April 23, 2008

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deanrosario

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Post Number: 1390
Registered: 11-2002

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Tuesday, April 22, 2008 - 01:03 pm:

Good to see we are back to discussing the market on this thread!

So, where are we heading?

As always, for me, it's a matter of "what's one's time frame"?

(a) In the very short term - i.e. today

- the direction seems unclear with a move up to 5570ish or down to 5510ish likely based on my assessment of the 2-hour XJO.

(b) In the next few days
- the daily XJO is - for the first time this year - looking bullish rather than bearish, so a move up to 5800 would be the target if the XJO breaks and holds above 5600.

- However, this week we may run out of time, given our shortened trading week.

(c) Longer than a week - in my view - things still appear gloomy

When I look at this XJO weekly chart I still see trouble ahead and the 5800 target mentioned in (b) seems highly unlikely.

This, of course, is my view of the 3 charts. Civilised debate is always welcomed and can surely help us all trade more profitably.

"Never commit yourself to anything you can't walk away from in 30 seconds." Neil McCauley (played by Robert de Niro) in 'Heat'.

"Hope is a dangerous thing. Hope can drive a man insane." Ellis Boyd "Red" Redding, played by Morgan Freeman, in 'The Shawshank Redemption'.

rdumas

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Post Number: 1344
Registered: 11-2006

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Votes: 0


Tuesday, April 22, 2008 - 01:24 pm:

CSL the mighty.

What a wonderful stock we have in CSL. Regardless of market conditions this one keeps marching on every upwards.

CSL today made a new high and you can see from the above chart that it recently once again broke out of a sideways trading channel. All of the EMAs (4, 10 and 30 week) are trending up showing the strength of the stock.

But is it all a fluke. No it isn't. You can see from the 5 year chart below that this baby just keeps powering on. Definitely one for the long term.

rdumas

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Post Number: 1345
Registered: 11-2006

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Votes: 0


Tuesday, April 22, 2008 - 01:33 pm:

G'day Dean,

Good to see you back on IC. I thought that you must have been on a world cruise spending the money that you've been making out of the market recently doing short term trading.

Where to in the next few weeks? I believe that this hinges on what the US market does in the short term. As per my post this morning on the S&P500, if it breaks upwards into the after affects of an invested head and shoulders pattern then we could see a good move in the ASX200.

As can be seen from the chart below the ASX200 yesterday broke through the medium term descending trend line only to get knocked back below it today. With the TMF trending upwards and the RSI in a neutral position our market certainly has a reasonable probability of going up in the medium term. Should this occur I would suggest a target of 5768 as shown on my chart. I think that it would be a brave man to predict a move any further than that at this stage.

resillent1

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Post Number: 433
Registered: 10-2006

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Votes: 0


Tuesday, April 22, 2008 - 02:21 pm:

Rudy

Here's a chart for you to analyse. It is the fall out from the LTCM failure and credit squeeze.

rdumas

Member

Post Number: 1346
Registered: 11-2006

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Votes: 0


Tuesday, April 22, 2008 - 04:58 pm:

Hi Resillent1,

I've been away from home the last couple of hours so didn't see your post until just now.

I need a little assistance from you as to what you want out of the analysis or probably more to the point, what you want me to get out of the analysis.

If you let me know I'll have a go at responding to your post sometime tomorrow.

Cheers

ody

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Post Number: 2394
Registered: 10-2006

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Votes: 0


Tuesday, April 22, 2008 - 05:43 pm:

RUDY AND RESILLENT: SAVINGS AND LOANS

Another episode that has a great deal in common with the present one - indeed the major precursor to this - was the savings and loans crisis. I attach the link for Wikipedia, but remember other accounts that seemed to me more satisfactory (Google: savings and loans [crisis]) when I last looked at this matter many months ago:

http://en.wikipedia.org/wiki/Savings_and_Loan_crisis

In some respects: plus ca change ...

eblode

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Post Number: 750
Registered: 11-2002

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Votes: 0


Tuesday, April 22, 2008 - 05:52 pm:

Rudy,
I've been watching an interesting phenomenon on the DOW. Whenever it hit's a high, the next day which I call Day 1 is relatively flat, then the next day, Day 2 it hits a high again. Let's see if that happens again tomorrow. Last Friday was a 237 day. Yesterday (Day 1) was flat. Tomorrow should be another 200+ day according to my theory. Let's see what happens on the Dow tomorrow.

Eugenio

deanrosario

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Post Number: 1391
Registered: 11-2002

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Votes: 0


Tuesday, April 22, 2008 - 06:19 pm:

Hi Rudy - alas, no world cruise at this stage, however, a quick 10 day "business trip" to Dubai & Qatar is being planned for early June.

It just so happens that the Socceroos play 2 World Cup Qualifiers in these countries at the same time - coincidence of course!

You'll notice the XJO finished at 5565 today.

Actually, it closed at 5575 at 400 p.m. and then 5565 after the closing auction, so, I'm pretty pleased with my estimated upside close of "5570ish"!

In relation to your analysis of our market, I agree the US still influences our - and the rest of the world's - movements on financial markets, however, as we've been noticing lately, irrational exuberance on US markets is often ignored on Aussie markets, or is being used by bears to offload their holdings at higher than expected prices.

CPI figures for March 2008 will be released by the ABS tomorrow at 1130 a.m.

I reckon the market is trading on the expectation of "no rate rise" for the forseeable future, so if the inflation figures are higher than expected ... there could be some nasty dumping of stocks at 1130 a.m.

ody

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Post Number: 2395
Registered: 10-2006

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Votes: 0


Tuesday, April 22, 2008 - 07:25 pm:

Hi Dean,

Reassuring to see you are back. I had been wondering/worrying.

resillent1

Member

Post Number: 434
Registered: 10-2006

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Tuesday, April 22, 2008 - 08:09 pm:

Rudy

The chart is from a period where Russia defaulted on its debt and Long Term Capital Management Collapsed. It came after a long bull market. It predominantly stemmed from the financial economy rather than the physical economy. People feared a total financial collapse - Soros wrote a book on it. The Bull had been banished. Greenspan cut rates including an inter-meeting cut.

History never repeats, but there are some similarities.

I was wondering if you could compare the chart from that period against current, i.e. % falls, trend, support, duration, bottoming formation etc.

That time around the market responded to the monetary stimulus and exploded up, in fact the liquidity probably helped to set up the dot.com boom.

Will our market respond correspondingly this time or play out differently? It could be said things are worse this time but so has been the size of the support and stimulus. If liquidity does get over done will resources be the next bubble or is it already.

Just food for thought.

colin_twiggs

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Post Number: 3168
Registered: 09-2002

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Tuesday, April 22, 2008 - 08:22 pm:

LTCM losses totaled $4.6 billion and shook the financial markets. Losses in the current crisis are estimated at $945 billion.

Regards,
Colin

resillent1

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Post Number: 435
Registered: 10-2006

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Tuesday, April 22, 2008 - 09:29 pm:

Colin

Do you consider the size too great this time around to respond to monetary policy?

The link between credit growth and employment seems to be rock solid to me. I expect employment objectives can’t be met without credit growth, so reserve banks aren’t about to hold back.

It seems to me that a social control mechanism for money supply, and a free market for application of those funds is a miss match and nobody seems to have accountability for asset bubbles that result, so long as they don’t immediately result in CPI measured inflation.

Ultimately the system is broke, but is there enough tonic left to cure this crisis? (and create the next)

deanrosario

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Post Number: 1392
Registered: 11-2002

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Votes: 0


Tuesday, April 22, 2008 - 10:33 pm:

Hi Ody - thanks for the concern.

I found the thread was being sabotaged by people whose only contribution was to mount personal attacks, and decided I wanted no part of such juvenile behaviour.

Thankfully, those who actually want to work the markets have prevailed so, ... let's all make lots of money!

ody

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Post Number: 2396
Registered: 10-2006

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Tuesday, April 22, 2008 - 11:02 pm:

Dean, - I know what you mean, and am sorry (but not surprised) to hear what caused your absence, just as I am pleased to see that you have now joined us again. It is worrying to realise that the behaviour of just one or two saboteurs can result in an excellent poster (and possibly more than one) departing from the thread. Fortunately matters now seem to be in very good order, and it is possible to concentrate on what the thread exists for.

ody

Member