Archive through May 22, 2008

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deanrosario

Member

Post Number: 1408
Registered: 11-2002

Rating: N/A
Votes: 0


Wednesday, May 21, 2008 - 09:15 am:

Peter - you raise a very interesting point in your analysis of the chart.

I really do find such analysis useful and wish we'd have more discussion of such topics so thank you.

For what it's worth, here is my analysis of the situation.

Whilst I agree that "bear traps" do occur - particularly around prior support levels/Fibonacci levels, it would be my contention that, in this instance, the market reacted to the news of Glenn Stevens at precisely 1130 a.m. rather than any prior-technical stimulus.

Obviously, if currency traders had not viewed the news as a bullish signal for the AUD, there would have been no "bear trap" observed.

In my opinion, the "bear trap" is a "lagging technical pattern".

That is, a "bear trap" is only observed IF the market spikes up after the original attempt to move down.

In my opinion - purely from watching intraday charts on the SPI - "bear traps" do occur, however ...

... and I have absolutely no figures to back up this observation - I'd reckon fewer than 10% of "downward breakouts" result in a bear trap and, unless, you are the one setting the trap (i.e. have enough money to move the market) it's easy to get caught trying to pre-empt the trap.

"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'.

ody

Member

Post Number: 2474
Registered: 10-2006

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Votes: 0


Wednesday, May 21, 2008 - 03:12 pm:

Commodities hit along with the banks

The fall we are seeing just now in our market, based on the US's overnight, is quite broad-based, and it is particularly notable that it is not just the financials which have come down, but - at long last, one might say - resources stocks as well. These had been, as Rudy has more than once pointed out, in a bull market as though the rest of the market had nothing to do with them. Now, suddenly, the resources ARE affected, and we are seeing some significant falls. To my mind the sector had gone up too consistently and too much for too long, so as to look like being based on too much uninhibited optimism and simply "hype" about take-overs, Chinese buying, etc. I feel the sector - certainly metals, perhaps not oil - is ripe for some profit-taking and some reduction in price, so I very much hope to see a somewhat further decline yet, in order to make BHP and RIO hopefully a little cheaper.

It may not happen, of course, but given that the TOTAL market had also been going up in recent weeks, I think we may now well get a CORRECTION, so lower prices than today's. This would seem logical - but of course it does not mean that it will definitely happen.

We are not, as yet, in a real bull market, although many investors of late have tended to behave as though we are. Indeed, a quite substantial fall at some point - whether now or later - would be fully to be expected. But I do not think it likely that we are going back all the way to the levels of January and March.

mrlunch

Member

Post Number: 316
Registered: 09-2006

Rating: N/A
Votes: 0


Wednesday, May 21, 2008 - 03:43 pm:

Does anyone know what happened to all the Street Tracks funds? Which were renamed to SPDR?

Like STW etc?

They don't seem to be trading as such... though they're still operating.

philr

Member

Post Number: 410
Registered: 04-2004

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Votes: 0


Wednesday, May 21, 2008 - 03:55 pm:

They have their own exchange now:

put in stw.axw

Phil

** Let blockheads read what blockheads wrote.
Warren Buffett

sway

Member

Post Number: 311
Registered: 12-2005

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Votes: 0


Wednesday, May 21, 2008 - 05:06 pm:

Ody

Please provide evidence of the fall in the resources sector. I can't see it.
xmj

Cheers
Sway

This is not a recommendation or advice. As they say .... DYOR.

ody

Member

Post Number: 2475
Registered: 10-2006

Rating: N/A
Votes: 0


Wednesday, May 21, 2008 - 07:58 pm:

SWAY: RESOURCES

I was commenting on the current situation. Materials down -2.2% today, metals + mining - 2.3%. BHP (the biggest resources stock) down -3.58%, and RIO -3.19. Compared with what we have seen recently, these figures are quite atypical. Figures from "Tradingroom" and "Yahoo" are public and can easily be checked, if you want to pursue the matter further. Of all indices today, none was worse.

sway

Member

Post Number: 312
Registered: 12-2005

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Votes: 0


Wednesday, May 21, 2008 - 08:43 pm:

Ody
That is such a weak response considering the gleeful tone of your post 2474. Suggest you re-read it and explain to the forum why you find a 2% change in one day to be so significant.

Sway

This is not a recommendation or advice. As they say .... DYOR.

mrlunch

Member

Post Number: 317
Registered: 09-2006

Rating: N/A
Votes: 0


Wednesday, May 21, 2008 - 08:59 pm:

Cheers philr - so they're on the warrants exchange now?

Did other ETFs move there too? I wonder what the purpose behind that was?

ody

Member

Post Number: 2476
Registered: 10-2006

Rating: N/A
Votes: 0


Wednesday, May 21, 2008 - 11:00 pm:

Sway,

I can't see why you should feel the need to put matters so disagreeably - talking about a "weak" response, a "gleeful tone", etc. Why not simply make your points? You will do that far more impressively without such language.

The idea that my tone about the performance of resources was "gleeful" is purely the product of your own mind - I did not feel any glee nor did I express any. I do feel, however - and that is very different from being "gleeful" about it - that the recent meteoric rise in resources has been inspired by a lot of hype and will most likely prove quite unsustainable. So I certainly found in particular a fall of some real magnitude in BHP quite remarkable (imagine that this occurred every day, or even for a number of days), and even a fall of more than 2% for the sector as a whole is not what we have normally seen of late in a sector that seemed impervious to the notion of any decline.

Even so, it is of course quite true that this may not persist. If we are to see a correction - and I am picking we will - then we need a larger number of negative days to establish that. I must confess that I found the fall in the US impressive, again in the light of what has been of late a rather cheerful mood. My sense is that people may be reconsidering their position now that the market has gone up quite a bit. I note that European markets are not looking particularly positive either.

However, I have far too little to go on to say as yet with any confidence that we'll definitely see a correction. What I feel I CAN say is that the chart for the resources sector looks far too toppy for me to have faith in it being sustained for much longer without a fall. If it continues to go up at this rate the fall, once it comes, will be only the bigger, and it is profoundly to be hoped that that situation will be avoided. So that is why I hope - though without glee! - that it will NOT continue to go up at the same pace.

My hope, however, is not a substitute for a cool look. Inasmuch as I CAN look coolly, I would have thought that the resources sector is very probably for the moment overbought, and that a reaction is due. It is possible - but not at all certain - that we saw the beginning of such a reaction in the performance of the materials sector today. The days and weeks to come will undoubtedly clarify the matter.

philr

Member

Post Number: 411
Registered: 04-2004

Rating: N/A
Votes: 0


Wednesday, May 21, 2008 - 11:01 pm:

mrlunch

Yes I think they moved all of them over.

I had a message come up from one of my CFD providers (First Prudential) the other day advising they had all been moved.

Phil

** Let blockheads read what blockheads wrote.
Warren Buffett

ody

Member

Post Number: 2478
Registered: 10-2006

Rating: N/A
Votes: 0


Wednesday, May 21, 2008 - 11:16 pm:

CURRENT SPOT PRICES ON KITCO

Copper: - 0.85%
Nickel: - 2.01%
Aluminium: + 0.51%
Zinc: - 2.27%
Lead: - 2.27%
Uranium: - 3.00%

It's not Armageddon, but, in tune with the performance of resources stocks on our market today, these are not good figures. As I said before: we need something like a pattern, over a number of days, to see whether or not there is a real change occurring. This is too little to go on - but it may be an indication, all the same.

ody

Member

Post Number: 2479
Registered: 10-2006

Rating: N/A
Votes: 0


Wednesday, May 21, 2008 - 11:33 pm:

EMERGING FURTHER TROUBLES

The credit crunch is not at the moment, it seems, the most central worry moving markets, though it still remains a factor. What is causing far more acute worry is the rising price of oil - up more than 14% in three days - and the attendant fear of inflation. Oil is proving a real menace in that regard, and certainly will do immense harm if this price rise continues or indeed even if prices don't come down. As confidence in several economic features is deteriorating again, gold is once again being approached as a "safe haven", which is a negative for the share markets, while the US$ is down - no wonder about all this, as only 16% or Americans feel that their country is "on the right track". All in all then, the profile of matters appears to be changing, and the fact that we have just had a four months high makes it to my mind possibly more than 50% likely that we shall see a correction before long (in what has been a "bull-style" market, though I am still hedging my bets.

sway

Member

Post Number: 313
Registered: 12-2005

Rating: N/A
Votes: 0


Wednesday, May 21, 2008 - 11:53 pm:

ody wrote on Wednesday, May 21, 2008 - 03:12 pm:
it is not just the financials which have come down, but - at long last, one might say - resources stocks as well.

.... at long last? Sounds gleeful to me.

ody wrote on Wednesday, May 21, 2008 - 03:12 pm:
too much uninhibited optimism and simply "hype"

Rubbish. A trend that has been in place for many years is not the result of optimism or hype. A one day fall of 2% is totally insignificant. Why you bothered to even mention it is a mystery. I thought you were a medium/long term operator? Look again at the charts I posted.

ody wrote on Wednesday, May 21, 2008 - 03:12 pm:
I very much hope to see a somewhat further decline yet,

Why? How much would it take? There have been plenty of corrections in the past. What is different this time?

Ody, I can respect any reasonable point of view and mostly I enjoy the discussion presented here. Sometimes I feel the arguments are not sound and I challenge them. This is one of those occasions.

Cheers
Sway

This is not a recommendation or advice. As they say .... DYOR.

azworkinit

Member

Post Number: 29
Registered: 02-2008

Rating: N/A
Votes: 0


Thursday, May 22, 2008 - 12:27 am:

I would think Iron Ore is part of the resources sector and it seems reasonably stable. Is coal in the energy sector?. It seems to be outperforming oil at present. RegardsAz.

"Success is a lousy teacher.It seduces people into thinking they cannot lose."BILL GATES.