Investing strategies and secular bear markets

[AMR]

FBU has to fall a long way to break the uptrend line - Phadreus has done a post over on the NZX forum. The resistance in the 1110s-1120s held up nicely today. If that had broken, FBU would have made a scary looking 6 month double top pattern.

[Hoop]

FBU has to fall a long way to break the uptrend line - Phadreus has done a post over on the NZX forum. The resistance in the 1110s-1120s held up nicely today. If that had broken, FBU would have made a scary looking 6 month double top pattern.

A little confused about your statement XX. As I see it the uptrend line on Phaedrus chart will be broken at $11.15 or thereabouts as well as that resistance.

If one uses a linear graph the uptrend line break is around the $10 mark, is this what you are referring to?

Agreed FBU held up nicely today and the market in general closed stronger to be just down, which is positive news for FBU.

[Hoop]

Dow finished at 13300
Dow broken down through 13500.
This is bearish, a better than average chance that it will test the major support level of 12800 (-4%)

Warning signal for another correction.

How NZX is going to withstand this I'm not sure, its been rather resilient lately.
I'm cashing in some stocks just in case.

[AMR]

Ditto, I was quite nervous watching the Dow plunge 60 points in the last half an hour to end up around 350 points down. What worried me about this is correction was that it was not confined to the financials. The SP500 also broke below 1490.

To answer your question, what I meant was that it has to close below the price and not just touch it intra-day. I think the closing price on the day was at around 1140 or so. I was only long for a day or so before I sold out.

I'm now looking to trade stocks predominantly from the short side. The Hang Seng index looks like it would be good to short soon.

[Hoop]

Yes XX hang Seng seems the most volatile with big swings

Got an Automated email from Colin Twiggs newsletter at 6.10pm thusday saying nearly word for word what we have said.

It seems all the Ducks have lined up in a row on this one. Colin Twiggs has monitored The DOW, S&P500, FTSE 100, Shanghai composite, Aust all ords, they all have broken key supports and signaling a secondary correction.

Sold out of GPG and sold 1/2 of my FBU (my key stock) yesterday.
Gone from 20% to 30% cash. Wish it was more, but I don't know which stock to part with.

Some large sellers were in the market, that is never a good sign.
Warning

[Hoop]

The NZSX50 has dropped 3% since the warning.
I have cash up my weaker stocks, ahead of the fall.
Now I look at the overall picture of how far this correction goes.
The good news that there seems to be buying amongst the gloom in the DOW so commentators give us a 50% / 50% chance that the key support of 12800 will hold. This means another -2% to go at best.
The bad news is that the Nikkei is now a bear market.

I orginally focused on the DOW to look for the correction warning....I now focus on the NZSE50 graph as I mainly invest in NZ stocks as this becomes more important once the warning has be identified. Points to watch is the break in the 5yr trendline somewhere around the 4040 mark and more importantly the key 3900 support line. If NZ follows USA market then another -2% brings the NZ market to about 4020 and bouncing on the trendline but well within the 3900.
So to deduce the statistics, if the Dow holds up above the 12800, the NZSX50 is OK, and I may buy back my just sold weaker stocks, ( FBU and GPG ) and go on stock watch positive

If the DOW falls below the very important 12800 the NZSX has a -3% buffer before it breaks a key support. Then the all important support is at 3500. (-12%)

If the NZSX breaks the 3900 I will eye up my long term stocks and sell as they break their uptrend lines.

Stocks 65% Cash 35% ( should be cashed up more but awaiting half year reports).

[Hoop]

Dow back up past 13300 needs to be above 13500 before I become positive again that the latest correction has ended.

Good to see that both NZSX and FBU have had gains and have respected their trend lines.

Although I sold half of my holding in FBU at $11.69. and FBU seems to be bouncing back up again( $11.57), I still regard the saying "rather be a live coward than a dead hero". A lot of rumours flying around about a big correction waiting to happen...whether it happens or not is not the issue...the issue is that if one can pick the signals of an impending correction then one should react to it.

FBU back on my positive watch
GPG watching