Has the market bottomed?

Hmmm... that behaviour sounds like its the Aussie investors who are the idiots??

 

lol, you are right!!!

 

Yes the market seems to bounce off the low that the All-Ords went to yesterday. If tonight brings another rise in the US then I think we are on the 'up' of the trading range...but I would not put my money on it. The US seems to be in a period of no rhyme or reason as to what will happen. This is a time when dollar cost averaging in the trading range seems to be working well..buying in when the all ords is sitting under 4000 and looking to sell when it goes over. Sure you might miss the eventual 'big' bounce which we will inevitably see where the market will power back to the levels seen a few months ago, but I think with all the problems we are hearing with ABC etc. I have my doubts that this is going to happen that soon. Of course we might also see new uncharted territories of the 3000 to 3300 level but there seems to be too much money sitting on the sidelines waiting to invest for the market to go that low, the yields on the financials are looking too attractive at those lower levels. What are people's views on the possible capital raisings (rumour!) for ANZ WBC and CBA. Do you think they will go ahead? I mean this is contributing to their current price weakness isn't it?

 

Ugh... damn support at 8000! Though there is enough bad news around that I'm backing that 8000 will be tested again sometime next week, and the US will push through it.

What is a little unusual is that the Dow rose 6%, yet the XAO is currently only sitting at 2.5% up, even after the 5.5% falls yesterday. It should be an interesting back half of the day for the all ords, and I'll be VERY interested to see if the Dow can maintain even half of the gains it made yesterday.

 

I think most australians don't think much of the 6% gain anymore!

 

Are you saying that the volitility is leaving the Australian market and is continuing in the US?

 

I'm saying when there is a rebound in the US, the australian market doesn't take much notice anymore.

 

Now XJO is 3,523.2 and XAO is 3,513.1.
Where is the next support?
Is looking pretty bad at the moment.

 

I'm pointing to next support been 3400.. this is what I have said a few times will be the next stop should the market break the previous support.

 

For XJO at 3513/09

 

For XAO possibly look for support @ around the 3239 level. If you really want to try to catch the falling knife then I'd be aiming around there.

If it breaks convincingly through there then seriously we are in no man's land.

 

Today the market bounced quickly off 3440, which is exactly 50% down from the intraday high of 6880 that the index reach last year? Is this potentially a significant psychological barrier? Could it be the bottom?

I'm also starting to wonder if the 1% interest rate cuts that people are expecting from the RBA in December will help reduce further downside risk for the Australian market and help restore some stability and maybe even some upward movement.

The other thing that is seeming to be discussed a little more now is the potential for an Australian recession over the first and second quarter of 09... you'd have to think that if the likelihood of that happening increases over the coming weeks then a bottom in the market might not be found until the early months of 09.

That siad, I'm also starting to wondering if the recovery in Australia be be decidedly quicker (assuming it comes), given that a significant part of the collapse of the Australian market and A$ was the result of the withdrawal of Japanese investment with the strengthening Yen - is there potential for the Japanese to flood back in looking for better returns abroad?

 

Without a doubt, they would already be looking at our $ and our cash rate with interest.

As soon as our interest rates bottom and commodities start to recover the Japs will be knocking on our door again

 

With a 5% fall today expected, it will break through this support with strength.

How long do you think it will take for this money to filter back into the system? When a rate change takes place, it takes about 6 months to filter back into the economy. The RBA have destroyed the australian economy. They wanted to slow the economy, and they have done just that! Any rates cuts are not going to be spent by people, they will hold the money to build up a buffer due to uncertain times ahead. I would say the same would apply for K Dudd's 10 billion handout to people, mostly who will spend it on staples and hold the rest for upcoming hard times.

With the global recession looming, I don't think we will see any recovery's anytime soon. This could linger with us for years..

With resources prices plummeting, I don't see people flooding back into the BHP's and RIOs, our economy really doesn't have any other income generating industries here which export. Resources will only pickup once the global economy picks up pace.. with all the debt out there, I think this wont be anytime soon.

 

next stop for all ords 2880.. 3400 broken which was the 50% mark..

interesting times ahead..

good to see OIF finally holding up after macquarie's false report of bank breech released the other day.. but the damage has been done.

 

Very interesting indeed...

Suddenly my exit in January 2008 at 5200 doesn't look like such a bad bet. Market is down to 3550 today, which represents a further 36% drop from where I exited (or almost a 50% return if it recovers to there from current levels). Not to mention the interest holding costs over that period.

I'm with crc, I think this thing has some legs left in it yet. I always said: don't take a long only bet to a bear market. That's a strategy that can only end one way. I'm a long only investor so I'll wait until we've seen the bottom off technically before re-entering. I might give up a few points of gain by not timing it perfectly, but that's a small price to pay given the current downside risks this bear market throws up every new day.

I use a mix of fundamental and technical signals to advise my strategy. Fundamentals have all turned south and the tech signals still have us firmly in bear territory too. No respite in the near term...

May we live in intersting times.

Cheers,
Michael

 

In recent times, any bad news is affecting the ASX but is not affecting the DOW much.

Looking at the ASX chart, there are a few support levels but they are of small duration while the DOW has stronger and longer lasting support levels.

If we look at the DOW chart for the past 30 days we can see that it has been going up and down and hovering around the same levels.
In other words, it has been going sideways for 1 month while the ASX has been falling sharply.

Is this going to continue?
I am suspecting that it will and the ASX will keep falling untill it reaches the more solid support level of 3000 points

cheers

 

ASX leads race to the bottom, but don't worry, be happy | businessday.com.au

Mark

 

Australian share market; ASX; Shares recover from lows

And what a beautiful bounce it was...How long will it last??? Nobody knows...

 

Up to Mon & Tuesday - possibly ....