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Trading XAO: Is it capitulating?

Discussion in 'Shares' started by wdongli, 22nd Jun, 2011.

  1. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
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    1,292
    Location:
    Perth
    2010/2011 financial year has been marked as market consolidation year while the fear turns to be the dominant emotion of Australia stock market after a lot of disasters locally and international under the shadow of the GFC. So far shares are down about 9 per cent from April and are at their lowest level since September last year.

    It is human nature that all of us feel difficult to be happy in uncertainties and would like to take the risk even we could see the discount to value. It doesn't matter what the history has shown and how experts point to long-term value in parts of the market. The market and nature have been designed to be sure the winners are few!

    Yes, we have not road map to guide us to drive through what is happening in Europe with its sovereign debt crisis, or with China and the US. They are engaged in history-making experiments: US trying to spend its way out of trouble, China trying to slow a $6 trillion economy without the wheels falling off. Who could see what happen in future? So the personal characteristics and behavior of the market players play the role to win or lose in the future. They are not only the traders, investors, speculators, but policy makers too. Could you put your positions at the place where the future winners must be?

    It is worse that there was Reserve Bank governor Glenn Stevens last week putting more shock on an already nervy Australia with warnings of further interest rate rises just as the collapse of clothing retailer Colorado underlined just how fragile the non-mining part of our economy is. The market herd has got more assurance in their gut that the future would be terrible.

    Warn yourselves "don't read too much into the next week" if your gut has been broken. The things could be really ugly. The end of the financial year is ticked in and that can lead to all sorts of weird gyrations brought on by tax-related selling of stocks and the expiry of options contracts. Losses are lovely in tax time since you could pay less tax, which is a market theme always perennial if the market exists.

    But who could blame investors for remaining on the sidelines?

    Warren Buffett should see this as a buy signal, since he always say "buy when others are fearful" mantra. It is easy to say but hard to follow. I have to say I have tried for years but always fail to get what I want at the lowest price. I know Buffett is right but it makes me very frustrated since it could not be the cells in my blood and then I often than not buy the dirty cheap fishes when the traders and bargain hunters still had the hopes. Yes we have to learn how to identify the inflexion point what's known as the moment of capitulation. Could I put all of my capital when next time XAO is at the moment of capitulation? Big challenge to me as a dirty-cheap fish collector!

    Just to sharpen my mind and make my buying of dirty-cheap fishes with edges. The key is we should buy when the toughest market players or bargain hunters have essentially given up the hopes shares rising again. In other words, it's always darkest before the dawn. We don't seem to be at that point, yet. The market herd enjoys to sell when the fire is furriest. Don't believe that? You do need to find XAO chart for 4 years and see the momentum indicator in March 2009, which was the party time to burn the money!

    It makes me feel very bad since I fail to act as I want this time. If it was not in its darkest time why did I put my capital into it? Man, why could you be a little bit matured and grip the chances exactly when you should!

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    Last edited by a moderator: 22nd Jun, 2011
  2. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    XAO: hurry to cut off your payment voluntarily

    A lot of traders who were active between Oct 2009 - present in most of Australia trading forums has being become dumb.

    The selling are going on without concern what losses could be but all for being out of the market. The big boys need to close the bad deal for next financial year. The retail players need the losses to deduct from their salaries. All act so resolutely. Who said the market players like the profit? They love the losses since it is thrilling to gamble with any type of consequences.

    There are only 6 working days left for anyone who love to get the cut from their salaries. Hurry and if you miss you would be regret! Let's cheer to get the losses, stop the losses, and cut off the payment this year, next year, and every year! Sell on the fire and we would feel great!

    Why don't you sell? I am in unemployment and updating the mind costs too much! I need the profit so I hate to stop the losses!