I agree - this is THE place to get information - esp when you REALLY need it. It is sad how other boards seem to consist of people who turn to infighting and squabbling when things go wrong!
Interesting TA article re-emphasising the importance of the juncture we are currently at:
http://www.ftmarketwatch.com/news/story.asp?guid={FDB34B92-BA08-4CE9-8F11-98C4909159FB}
Cheers, Mark
Interesting TA article re-emphasising the importance of the juncture we are currently at:
http://www.ftmarketwatch.com/news/story.asp?guid={FDB34B92-BA08-4CE9-8F11-98C4909159FB}
Cheers, Mark
My findings too.....I've been scanning the weekly charts (FTSE250)this weekend and just about everything is on a downturn. How I'm gonna find a long for this week's comp, I've no idea...A couple stick out a bit as being a half chance..ABP AGS ARK IMI .
As for shorts,anything will do, it's just a question of how much..Time to go 100% cash I think
As for shorts,anything will do, it's just a question of how much..Time to go 100% cash I think
Excellent posts, all those millions of PEPS and ISA's and other funds ,who can't hold cash for very long, will either be closed or find the least voatile sector .
When everyone stops buying the downward momentum spiral becomes unstoppable.
No government will allow this to happen, when a kind word, rumour, interest rate rise will abort it. Certainly, the style of trading today is effecting the direction of the markets,haven't heard "don't worry its the long term that matters" quote lately. Like to make one point though, No investers, traders, No market.?? There is a price at which we would all dive in, its not theory , its a fact, what price, index level using TA ,fundamentals ect. would that be, can TA tell us??, 1405 the opening price at the begining of Oct 1998 or one of the supports up to todays level.
Pesonally I seem to see the bottom of the Nas at each new low, it is the Nas, techmark that dictates and grabs all the attention, all other markets seem to follow its lead. I am an optimist (Bull) by nature , but even so, cannot see the end of this bear market, maybe I'll become a bear and short eveyrthing, seems to be the only way out.
Good Luck all
Col
[Edited by waldorf on 04-03-2001 at 05:15 PM]
When everyone stops buying the downward momentum spiral becomes unstoppable.
No government will allow this to happen, when a kind word, rumour, interest rate rise will abort it. Certainly, the style of trading today is effecting the direction of the markets,haven't heard "don't worry its the long term that matters" quote lately. Like to make one point though, No investers, traders, No market.?? There is a price at which we would all dive in, its not theory , its a fact, what price, index level using TA ,fundamentals ect. would that be, can TA tell us??, 1405 the opening price at the begining of Oct 1998 or one of the supports up to todays level.
Pesonally I seem to see the bottom of the Nas at each new low, it is the Nas, techmark that dictates and grabs all the attention, all other markets seem to follow its lead. I am an optimist (Bull) by nature , but even so, cannot see the end of this bear market, maybe I'll become a bear and short eveyrthing, seems to be the only way out.
Good Luck all
Col
[Edited by waldorf on 04-03-2001 at 05:15 PM]
Well, you wanted to conjure up a crash - and you have! But where to now. Pundits are divided by further gloom to come, and those who feel that the fundamentals for the wider market outside TMT stocks are good and that the market is oversold. So how do we reconcile these various views.
Firstly the view that stocks now represent good value. The FTSE 100 is down 25% from it's all time high - a bear market by any definition. So it must be cheap now, right? Well no. The dividend yield on the allshare is 2.5%, which is about double the long term average of around 5%. Admittedly the actions of dear Gordon to tax dividends from shares held by pension funds is distorting the market as companies find other ways to use their profits (share buy backs etc), but nevertheless, it still makes shares look expensive. So what about the p/e of the market? This is currently about 20, or 17 if TMT stocks are stripped out - against a long term average of 14. But an average, by definition, means that price must sometimes be below the average. At the end of the 1973/74 bear market when the allshare slumped by 75% over an 18 month period, the p/e of the allshare was about 4, and the dividend yield about 11.75. This was against a backdrop of rising inflation, falling growth and a quadrupling of the oil price - not a current scenario - but history rarely repeats itself precisely. But these figures do go to show the extent to which markets can become oversold.
Remember Alan Greenspan's "irrational exuberance" comment? It doesn't seem so very long ago - but it was made with the Dow at around 6000. Now we are trying to persuade ourselves that at just under 10,000 the Dow is cheap!.
The press is saying that normally after a fall of 20 - 25% this is the bottom of a normal bear market (whatever that may be) and that buyers will come to no harm at these levels. Hmmm - try telling that to someone who bought into Japan after a 20% fall at 32000 on the Nikkei ( now 12152 10 years later). Or even the Allshare in 73/74. Or the Dow in 1929 which fell by 90% by the time the bottom was reached. Or the techmark where buying in after a 20% fall would now have halved your investment. Some tech stocks have already fallen by 95% - or as one fund manager explained it, they dropped by 90% and then halved!
I am not predicting anything so cataclysmic, but we do need a real capitulation phase before we have seen the bottom. Then we need a period where shares no longer fall on bad news, and where people get bored by the whole subject and reject shares as a means of investing. There will then be few sellers left and buyers will be able to start to drive up the price.
Finally, what are the charts saying. Firstly there is a diamond top pattern that has broken on the FTSE 100 and the Dow. The Dow pattern is well documented in Ed Downs excellent site http://www.signalwatch.com/ and needs no further comment here other than to say that the pattern implies a fall to 7700. Using the same technique for the FTSE projects the market down to at least 4905, with no real support before 4600. also remember that measurements based on a diamond are based on minimum moves - the actual move is frequently more. See attached chart.
The S&P500 has completed a head and shoulders top and standard measurements indicate a move down to 933, which is very close to the bottom in 1998, and a long period of consolidation in 1997.
For both the FTSE and the S&P I don't necessarily see this as a straight line move - a period of consolidation in the form of a flag or pennant at close to current levels would indicate that we have reached the halfway stage from the breakdown points on the major indices. But I believe that we will get there.
Firstly the view that stocks now represent good value. The FTSE 100 is down 25% from it's all time high - a bear market by any definition. So it must be cheap now, right? Well no. The dividend yield on the allshare is 2.5%, which is about double the long term average of around 5%. Admittedly the actions of dear Gordon to tax dividends from shares held by pension funds is distorting the market as companies find other ways to use their profits (share buy backs etc), but nevertheless, it still makes shares look expensive. So what about the p/e of the market? This is currently about 20, or 17 if TMT stocks are stripped out - against a long term average of 14. But an average, by definition, means that price must sometimes be below the average. At the end of the 1973/74 bear market when the allshare slumped by 75% over an 18 month period, the p/e of the allshare was about 4, and the dividend yield about 11.75. This was against a backdrop of rising inflation, falling growth and a quadrupling of the oil price - not a current scenario - but history rarely repeats itself precisely. But these figures do go to show the extent to which markets can become oversold.
Remember Alan Greenspan's "irrational exuberance" comment? It doesn't seem so very long ago - but it was made with the Dow at around 6000. Now we are trying to persuade ourselves that at just under 10,000 the Dow is cheap!.
The press is saying that normally after a fall of 20 - 25% this is the bottom of a normal bear market (whatever that may be) and that buyers will come to no harm at these levels. Hmmm - try telling that to someone who bought into Japan after a 20% fall at 32000 on the Nikkei ( now 12152 10 years later). Or even the Allshare in 73/74. Or the Dow in 1929 which fell by 90% by the time the bottom was reached. Or the techmark where buying in after a 20% fall would now have halved your investment. Some tech stocks have already fallen by 95% - or as one fund manager explained it, they dropped by 90% and then halved!
I am not predicting anything so cataclysmic, but we do need a real capitulation phase before we have seen the bottom. Then we need a period where shares no longer fall on bad news, and where people get bored by the whole subject and reject shares as a means of investing. There will then be few sellers left and buyers will be able to start to drive up the price.
Finally, what are the charts saying. Firstly there is a diamond top pattern that has broken on the FTSE 100 and the Dow. The Dow pattern is well documented in Ed Downs excellent site http://www.signalwatch.com/ and needs no further comment here other than to say that the pattern implies a fall to 7700. Using the same technique for the FTSE projects the market down to at least 4905, with no real support before 4600. also remember that measurements based on a diamond are based on minimum moves - the actual move is frequently more. See attached chart.
The S&P500 has completed a head and shoulders top and standard measurements indicate a move down to 933, which is very close to the bottom in 1998, and a long period of consolidation in 1997.
For both the FTSE and the S&P I don't necessarily see this as a straight line move - a period of consolidation in the form of a flag or pennant at close to current levels would indicate that we have reached the halfway stage from the breakdown points on the major indices. But I believe that we will get there.
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madasafish
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I agree with Trader X we need a crash .. but we will not have one.
Nasdaq comp is in a superbear down trend :
Since September a broad channel 500 points wide with sizeable rallies.
Since end January a much steeper and narrower channel down (200 points wide) inside the braod channel.
The two intersect at 1475 or thereabouts on 30th March give or take a few days.
We should see then some form of rally.. but I see further falls - remember :
1. profits are deteriorating so news will worsen
2. Intel Cisco and Microsoft and others have been booking up to 50% of their EPS by profits on INVESTMENTS. These are now turning to losses. So the news will get worse - much worse.
I expect a major selloff as 1998 - A Greenspan is no fool - if he cuts rates 1% next week he'll be like King Canute trying to stop the tide. BUT a big cut at the bottom when fear is at its worst will drive the institutions to buy in volume and hey presto a 20% rally in a week.. and the corner will turn..
So where is the turn? ANd when. My charts suggest NAS comp at 1100 - maybe spiking to 1000 - and a turnround - June to August - maybe later. Certainly neo earlier.
I'm doing my sums for what to buy and at what price.
BLM at 80p, Autonomy at £4, Colt at £3 seem about right.
(Last time I did this September last year I forecast Bookham at £15 so my track record is one of optimism)
Mike
Nasdaq comp is in a superbear down trend :
Since September a broad channel 500 points wide with sizeable rallies.
Since end January a much steeper and narrower channel down (200 points wide) inside the braod channel.
The two intersect at 1475 or thereabouts on 30th March give or take a few days.
We should see then some form of rally.. but I see further falls - remember :
1. profits are deteriorating so news will worsen
2. Intel Cisco and Microsoft and others have been booking up to 50% of their EPS by profits on INVESTMENTS. These are now turning to losses. So the news will get worse - much worse.
I expect a major selloff as 1998 - A Greenspan is no fool - if he cuts rates 1% next week he'll be like King Canute trying to stop the tide. BUT a big cut at the bottom when fear is at its worst will drive the institutions to buy in volume and hey presto a 20% rally in a week.. and the corner will turn..
So where is the turn? ANd when. My charts suggest NAS comp at 1100 - maybe spiking to 1000 - and a turnround - June to August - maybe later. Certainly neo earlier.
I'm doing my sums for what to buy and at what price.
BLM at 80p, Autonomy at £4, Colt at £3 seem about right.
(Last time I did this September last year I forecast Bookham at £15 so my track record is one of optimism)
Mike
I expect a mini-rally this week - after all, the MM's need volume. So a rally will create buyers, turnover, and profit - after all many MM's have a lot of stock - they need to sell this off at higher prices to satisfy their greed! (Not an insult, as to a lesser extent, that drives us all!)
However, the major down trend is still in tact. So to create volume, MM's will let the price fall. This may be a week to make profit - I hope, but holding any longer that friday may have risks!
Remember, capitulation has not yet come! Where is the bottom - may be as low as above, I do not know. I just feel we are not there yet!
Hopefully a good week to all,
Mark
However, the major down trend is still in tact. So to create volume, MM's will let the price fall. This may be a week to make profit - I hope, but holding any longer that friday may have risks!
Remember, capitulation has not yet come! Where is the bottom - may be as low as above, I do not know. I just feel we are not there yet!
Hopefully a good week to all,
Mark
This is an interesting thread and I just wanted to add few points.
1) This market, particularly the tech related stocks, are clearly trending. As an example, an ADX reading of 38.49 for the future on the NAZ is an indication of strong trending activity.
2) The SAR indicator developed by Wilder is one of those tools you would use ONLY in a trending market. It had been developed to always keep you in the market. It currently suggests being short the future on the NAZ.
3) The overall investment community has grown more mature, less “panicky”, mainly, I should say, due to the fact that financial education and information are reaching every day a larger part of the population. As a result of this, the “follow the flock” approach to investing (of which, do not take me wrong, I am a keen supporter!) has become more widespread. As a result of this, once we are in a trend, any trend, this is likely to last longer than it would have in the past.
4) Spread betting firms, CFDs, more people trading futures and options, all these elements make it possible for investors to play the market ALSO on the short side. In the same way there were speculators pushing up the NAZ before the, erm, “correction of March”, in the same way there are market participants holding short positions, thus contributing to the continuation of the current down trend
1) This market, particularly the tech related stocks, are clearly trending. As an example, an ADX reading of 38.49 for the future on the NAZ is an indication of strong trending activity.
2) The SAR indicator developed by Wilder is one of those tools you would use ONLY in a trending market. It had been developed to always keep you in the market. It currently suggests being short the future on the NAZ.
3) The overall investment community has grown more mature, less “panicky”, mainly, I should say, due to the fact that financial education and information are reaching every day a larger part of the population. As a result of this, the “follow the flock” approach to investing (of which, do not take me wrong, I am a keen supporter!) has become more widespread. As a result of this, once we are in a trend, any trend, this is likely to last longer than it would have in the past.
4) Spread betting firms, CFDs, more people trading futures and options, all these elements make it possible for investors to play the market ALSO on the short side. In the same way there were speculators pushing up the NAZ before the, erm, “correction of March”, in the same way there are market participants holding short positions, thus contributing to the continuation of the current down trend
Good debate, I suspect that there will be one device that knows where the bottom is in this market ....it's called hindsight.
Only when we eventually rise off the bottom and stay off! will we know where it was.
I think the happenings of tomorrow and its interpretaion is crucial
Regards
Joe
Only when we eventually rise off the bottom and stay off! will we know where it was.
I think the happenings of tomorrow and its interpretaion is crucial
Regards
Joe
It always amazes me! America is supposed to be where recession is looming and yet, Wall Street managed a rally of +135.7 on DOW and +60.28 on NAZ in expectation / anticipation of FED cuts tomorow.
What did the professional money in London do today. NOTHING - ABSOLUTELY NOTHING, BUT FRET AGAIN. There is something substantially different between the American culture and the Briitsh. Basically the BULL versus the BEAR. The POSITIVE versus the NEGATIVE. The cups half full (US) versus the cups half empty (UK)
It is a fact that even though the economic problems are mainly in America the UK seems to over-react to the downside situation, yet when the US rises the UK fails to take advantage of the rise. This is partly due to the time lag effect.
CONCLUSION: You are more likely to make money in UK if you are a BEAR (shorting specialist) than if you are a BULL. We live in a very sad country, a race of people who have forgotten how to lead and prefer to be led.
I never realised what sheep we have become until I became involved in the market. I suspect that UK have become subordinate to US and now it seems, incapable of doing anything without permission from Wall Street. What happened to the GREAT in Britian? How bizarre!
Tx
What did the professional money in London do today. NOTHING - ABSOLUTELY NOTHING, BUT FRET AGAIN. There is something substantially different between the American culture and the Briitsh. Basically the BULL versus the BEAR. The POSITIVE versus the NEGATIVE. The cups half full (US) versus the cups half empty (UK)
It is a fact that even though the economic problems are mainly in America the UK seems to over-react to the downside situation, yet when the US rises the UK fails to take advantage of the rise. This is partly due to the time lag effect.
CONCLUSION: You are more likely to make money in UK if you are a BEAR (shorting specialist) than if you are a BULL. We live in a very sad country, a race of people who have forgotten how to lead and prefer to be led.
I never realised what sheep we have become until I became involved in the market. I suspect that UK have become subordinate to US and now it seems, incapable of doing anything without permission from Wall Street. What happened to the GREAT in Britian? How bizarre!
Tx
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The volatility continues with DOW off 238.35 and NAZ off 93.74. Another 20 days at this rate and the NAZ won't exist. The market did not like the 0.5% cut. Could bounce to the upside tomorrow but I would not like to bet on it. If the FTSE tracks Wall Street tomorrow the target of 4905 begins to look possible. Many traders will have opened long positions today and will be under pressure to sell when the spreads come off in the morning. I just have a feeling that the selling climax is some way off and the worst is yet to come. I hope I am wrong. I was a bit harsh on the UK market pro's in my last post but it is a fact that UK never quite seems to catch up with Wall Street and over-reacts to sell off in US. WATCH THIS SPACE. If markets go back into free fall we could see early intervention by the FED. The nightmare continues.
Tx
Tx
The BBC said dealers described a sense of real panick in the market today. BBC 6pm news declared that the sell off is accelerating and is now officially defined as a market CRASH, more serious than 1998.
I would say this description is more applicable to tech stocks but according to commentators the situation is becoming more serious by the day. None of our members should now be holding Long positions. The risks are far too great because nobody but nobody can forecast the bottom or predict the future.
In my view only the smart money can stop this rout and I really do not believe professionals want to stop it. I STRONGLY believe market professionals caused this bear market by attacking tech stocks one year ago today, then it spread to telecoms, now it applies to all tech stocks whether profitable or not, then it applies to defensives and old economy then the whole bloody market. HELP! THERE IS NOW WHERE LEFT TO GO - THE GLOOM AND DOOM MERCHANTS HAVE FINALLY INFECTED THE WHOLE MARKET. WELL DONE BROKERS, THERE WILL BE NO QUICK RECOVERY FROM THIS MESS.
Tx
I would say this description is more applicable to tech stocks but according to commentators the situation is becoming more serious by the day. None of our members should now be holding Long positions. The risks are far too great because nobody but nobody can forecast the bottom or predict the future.
In my view only the smart money can stop this rout and I really do not believe professionals want to stop it. I STRONGLY believe market professionals caused this bear market by attacking tech stocks one year ago today, then it spread to telecoms, now it applies to all tech stocks whether profitable or not, then it applies to defensives and old economy then the whole bloody market. HELP! THERE IS NOW WHERE LEFT TO GO - THE GLOOM AND DOOM MERCHANTS HAVE FINALLY INFECTED THE WHOLE MARKET. WELL DONE BROKERS, THERE WILL BE NO QUICK RECOVERY FROM THIS MESS.
Tx
madasafish
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The investing public has as much blame for this mess as anyone and to blame the professionals is an abrogation of personal responsibilty.
WE were the people who bought rubbish to new hights - remember Media@invest near £1?
- so to blame others for the crash is just plain wrong.
Mike
WE were the people who bought rubbish to new hights - remember Media@invest near £1?
- so to blame others for the crash is just plain wrong.
Mike
Investment banks are stuffed full of money, obscene amounts of money just waiting to come into the market. Retail money is insignificant, only the smart money can decide when it is time to change direction of the trend. The doom and gloom is a self fulfilling prophecy. Gordon Brown et-al keep telling us the economy is strong and we have re-paid the national debt, that everything in the garden is rosy. The market professionals think something different. Both Gordon and the market cannot be right, the question is, which one is wrong, Gordon or the Market. I wonder............hmmmmmm
In reply to your comment, I have to disagree, I have been forecasting this scenario for sometime, you did not need a crystal ball to see the damage being caused by market professionals, brokers and analysts. The story has been unrelenting for the last 12 months, atacking everything tech until they finally got their way. NOW THEY FINALLY OVERDID IT - SURPRISE, SURPRISE IS THAT A NOT A FAMILIAR STORY WITH THESE CLOWNS WHO DELIBERATELY MANIPULATE THE PRICE OF STOCKS UP AND DOWN TO MEET THEIR OWN INSIDER PLAN.
Tx
In reply to your comment, I have to disagree, I have been forecasting this scenario for sometime, you did not need a crystal ball to see the damage being caused by market professionals, brokers and analysts. The story has been unrelenting for the last 12 months, atacking everything tech until they finally got their way. NOW THEY FINALLY OVERDID IT - SURPRISE, SURPRISE IS THAT A NOT A FAMILIAR STORY WITH THESE CLOWNS WHO DELIBERATELY MANIPULATE THE PRICE OF STOCKS UP AND DOWN TO MEET THEIR OWN INSIDER PLAN.
Tx
madasafish
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There is market manipulation of course: but on such a grand scale? WHo lost money? IF I believe your argument the private investor is insignificant so the institutions must have lost. So why are they so dumb as to let themselves manipulate themselves out of money.
Mike
Mike
OK Mike I think there is some validity in what you say, you are right to say you cannot apportion blame in clear cut way. The market is bigger than that, the market knows best etc........ I still do believe this situation has much to do with professionals over reacting to US economic situation and of course reacting directly to US market sell off. I still believe there is a total LACK of leadership from the big players in London. You will read many of my previous posts referring to the subordinate position to US adopted by the big players in London. If our economy is so strong then why are we dancing to Wall Streets tune? I believe it has partly to do with the internecine tendencies of the British culture and make up. There is an advantage in a major sell off, because the whole cycle starts again, with shares on sale for nothing, so that the market professionals can make a killing in the medium to long term.
I do not discount any theory, so please come back to me with your ideas. I think it is useful to have this debate.
Tx
I do not discount any theory, so please come back to me with your ideas. I think it is useful to have this debate.
Tx
With regards of tech stocks' hype and the following crash...it's a case of swindlers and victims...to diclose the swindles you need the victims to get wiser or for the victims to get wiser they need to get familiar with the swindles in the market...either way one has to be aware of manipulations to survive in the market...
Agree with Tx regarding UK big boys double immitating the US ones...just as it is done in foreign policy etc..
Riz
Agree with Tx regarding UK big boys double immitating the US ones...just as it is done in foreign policy etc..
Riz
