NZSX50 - Good News!

[bonne vie]

Thanks CJ. While I have been an investor largely since 2008, It is only recently, due to having a sudden unexplanned exit from working full time (health) that I have had time to be more proactive with my portfolio. My portfolio is even more important now to grow income for the future while mitigating the risks as far as possible. Finding this forum has been great. So much knowledge out there willingly shared, by the likes of yourself, Sparky, Moosie and many more. I hope, in time I will be able to become a meaningful contributor

[Banksie]

Looks like the rest of the market is going to be completely ignored today with all eyes on slightly-less-than-Mighty River Power.

Lol - I guess so - even NZX have replaced their landing page with a MRP flag https://www.nzx.com/

[bonne vie]

Cheers bonne vie, glad to have ya onboard. I can't wait until the day I can semi-retire and focus on the portfolio day-in and day-out as a hobby AND my income :)
With your number of posts I thought you must be. LOL . Hope that museum is coming along - can just see a Moose head trophy on the wall winking as another trade is done.

[000831]

does anybody know whether there is tradable index fund in New Zealand. or index future?

[Stranger_Danger]

That suggests we still have a little way to run.

He was asking you what to do.

The top is when he tells you what to do.

[CJ]

Well, I said I would tell posters here when the famous "taxi driver" moment happens.

And it happened today.I don't think that is quite as bad as you let on. You said you are effectively a professional investor, he saw your gold rolex ;) and asked how he could acheive the same.

The comment re mining stocks is the worrying part of the conversation but the positive is he isn't invested yet.

[Banksie]

Coming from a newbie this may be kind of ironic - but wouldn't a good metric be the number of new members signing up to sharetrader? If we could chart that against the nzx50 I am sure there must be some sort of correlation.

[Billy Boy]

Ah - but newbies coming to Sharetrader could be highly intelligent and seasoned investors (TA and FA alike), who have just got online.

I had been reasonably exposed to property and shares before I first joined Sharetrader in December 2011.

New members who are also new to investing altogether would be a different story.
The Herald have been running some vid's on share market investing...
ME WHO DISLIKE THE MEDIA must on this occasion give them my congrat's.
I only hope they keep going
BB:t_up:

[CJ]

The Herald have been running some vid's on share market investing...
BB:t_up:Stuff got in on the act with an article or two as well. I didn't read as assumed it would be to simplistic.

[Billy Boy]

Stuff got in on the act with an article or two as well. I didn't read as assumed it would be to simplistic.
Let's hope all can go beyond the simplistic.
I feel the nzx could do a bit better on this front. After all, it's very hard to sell a secret.
BB

[Vaygor1]

1. Fair point, he hadn't invested yet.
2. Though he was asking for tips. Not yet euphoric out there, but certainly exuberant
3. I wouldn't wear a rolex. :-)

Typo by CJ.... meant to say Patek Philippe. ;)

[Billy Boy]

sparky #814
Good post.....
CPI i often think is not a good indicator of inflation as it leaves out too much.
Underlying inflation is the one to keep an eye on, if we can.
Trillions & trillions of Dollars, Euro's, etc have been printed. Now how are various
Govnmts going to pay this debt back?. Inflating it away over time. ? probably.
NZ cannot escape this, as we will be importing it. Therefore when do we see the
beginning. I think we are seeing it now.
Your chart showing 2.6% inflation (CPI 2000 - 2013), I think it's being held to this buy the
high nz Dollar. When the NZ dollar drops !!, well !! . The big Q. now is
How long for this high $NZ, When will it drop, Why, and of course :-
Where would you want to have you hard earned $$$, in the share market ??. Property ??
Bonds ??. under the matris ??
Ya revived my thinking Sparky.
Cheers BB

[winner69]

WOULD HAVE PREFERRED A RED BALLOON ... to represent up up and away

Like a helium filled one that can keep rising ... all the way into space

[Hoop]

WOULD HAVE PREFERRED A RED BALLOON ... to represent up up and away

Like a helium filled one that can keep rising ... all the way into space

Will this do :)

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5017052013-2.png (http://s458.photobucket.com/user/Hoop_1/media/NZX5017052013-2.png.html)

[winner69]

we seem to have missed the capitulation stage belg was talking about a few months

see this time is different

[000831]

Looks like we're seeing some profit taking today. Tech stocks down with 4th straight day of losses (not helped by profit taking on TEL of course!). Consolidation time before we totally run out of steam???

Is any index future or short selling in NZ?

[Xerof]

So far we have:

- bouyant sharemarket
- bouyant property market (where it counts)
- rampant high LVR bank lending, free tv's, cash teasers
- bouyant consumer confidence
- verbose taxi drivers
- lots of newbies investing

there is one vital link yet to come to complete our perfect storm scenario


- winning the Americas Cup

[winner69]

So when does the music stop and everyone rush for the chairs?

not for a while ... this time it is different

Bears Give Up: Biggest Switch in Sentiment in 7 Years
http://www.cnbc.com/id/42459309

[Xerof]

Xerof, these are reasons to hold some cash, would you agree?

when I think back to 1987, its currently a mild froth compared to then, and when the GFC washed onto our shores, we got hit through no particular fault of our own...deleveraging just unwound at a frenetic pace. To me the world has not deleveraged sufficiently yet, so if you are skimming some cash off, I see nothing wrong with that, but I don't yet see a crash looming, perhaps a decent correction?

for me a good sign of a coming correction is strong volatility within a narrow range, i.e. indecisiveness and hesitancy can lead people to the sidelines.


of course, the start of the GFC led to the finance company woes, which WERE our own fault!

[macduffy]

I normally try hard to be optimistic about the market but here's a recent quote from Bill Gross, savvy boss of PIMCO. Of course, he could be talking his own book but it gave food for thought, nevertheless.

"Never have investors reached so high in price for so low a return. Never have investors stooped so low for so much risk."
–Bill Gross, PIMCO, 14 May 2013

[BIRMANBOY]

See investing can be fun.:)Nice work.
Will this do :)

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5017052013-2.png (http://s458.photobucket.com/user/Hoop_1/media/NZX5017052013-2.png.html)

[Toulouse - Luzern]

Thanks Hoop,

I enjoy reading your posts.

NZX chart is looking good.

Favourable market on the NZX just now IMHO.

Is there a similar thread for the ASX with Phaedrus chart approach.

On another NZX thread KFL.NZX is discussed as doing well and BRM.NZX as going sideways.

I suspect this follows the overall charts.

Thanks and regards

[ratkin]

Am i the only one hoping for a decent correction?

[000831]

Hope the NZX down by 20%!!!! Do you guys think Japan will have a financial crisis instead of a booming. Abe's master plan could lead a diaster.

[Hoop]

The NZX50 has been breaking down since last Wednesday..it was Friday when it became noticeable and today it was expected and Mr Market did exactly as predicted ..closed at 4478 down 48 (-1.1%).

Since there has been only minor negative movements the target price for a bottoming is 4400 (70% chance) and would last a month or so, making this another very shallow correction....... However I sold down a major part of my portfolio at opening today as I think the previous rise was too steep....It is well above the primary trend and primary S&R line...25% above its primaries is too far up I think (in other words its risen too high too quickly).....Most of the time a 20% decline triggers a bear market which lasts about 18 months...In NZX50's scenario a 25% decline would still be just in Bull territory... it would be an very rare event if that happened.

The NZX50 bull is over 4 years old...I have seen bulls around 7 years old but on average the expected lifespan is just under 4 years old. This NZX50 bull has had a new lease of life and is extremely healthy atm... sudden cyclic deaths are rare and it would take a black swan event to cause it......normally deaths occur slowly and quietly over a period of months with most investors with positive outlooks oblivious to the cyclic reversal assuming it is another but more potent bull market correction and are buying in early to get these "cheap" shares ..this buying "cheap shares" behaviour causes a bearish double or triple top type patterns to form..........we have yet to see this pattern EDIT: The AORDS is showing one now

So what will happen?
We can't predict the future so we take one day at a time and one step at a time.......First step is watch the MA50 and the 4400 area and see where that leads us to...

EDIT:...It has been brought to my attention that The chart below has some missing data between Nov2012 to Mar2013 this has distorted the indicators ...e.g EMA50 is in fact at 4502 not at 4468.. MA50 has been broken today....EMA200 is 4160 not 4006..The drawn S&R lines at 4400 and 4350 are unaffected and are correct

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5024052013.png (http://s458.photobucket.com/user/Hoop_1/media/NZX5024052013.png.html)

[Major von Tempsky]

I think someone has already quoted the old adage "Sell in May and go away".
Well I haven't sold but I'm off to Canada until late June and I'm building up a nice bundle of cash .... so I hope to find the NZX50 collapsed in a heap when I get back :-)

[Hoop]

I think someone has already quoted the old adage "Sell in May and go away".
Well I haven't sold but I'm off to Canada until late June and I'm building up a nice bundle of cash .... so I hope to find the NZX50 collapsed in a heap when I get back :-)

We'll try our best for you MVT...TEL at $1.80 sound good for you on your return ;) ;)

Have a nice trip ..

[MAC]

Hoop, can I ask where I can get good NZ50 trend data from ?. I traditionally have been dependent on yahoo finance data, but with the yahoo NZ50 data being corrupted between Nov 12 and Mar 13 I find I get trend distortions, perhaps others find the same thing. Can you recommend an alternative data source ?

http://au.finance.yahoo.com/echarts?s=%5ENZ50#symbol=%5Enz50;range=1y;compare= ;indicator=sma(50,200)+bollinger+rsi+macd+stochast icslow;charttype=line;crosshair=on;ohlcvalues=0;lo gscale=off;source=undefined;

[Hoop]

Hoop, can I ask where I can get good NZ50 trend data from ?. I traditionally have been dependent on yahoo finance data, but with the yahoo NZ50 data being corrupted between Nov 12 and Mar 13 I find I get trend distortions, perhaps others find the same thing. Can you recommend an alternative data source ?

http://au.finance.yahoo.com/echarts?s=%5ENZ50#symbol=%5Enz50;range=1y;compare= ;indicator=sma(50,200)+bollinger+rsi+macd+stochast icslow;charttype=line;crosshair=on;ohlcvalues=0;lo gscale=off;source=undefined;
Hi MAC..
The charts I post are from incredible charts they use the yahoo NZ data as a default...After reading your posts I noticed I have the same distortion...seems to be weekly instead of daily and then 3 day...typical Yahoo rubbish!!! I thought that was fixed up ...it seems its back again.......

I've checked with Stockcharts ( http://stockcharts.com/h-sc/ui ) the NZX50 chart with them seems to be intact... they use EOD data...yes there's a big difference they have MA50 at 4496 so today that was broken...on IC chart the MA50 is at 4468 (not broken)....bugger:mad ;: That Yahoo distortion is too big to be ignored

I think I have to ditch Colin Twigg's Incredible Charts they are too inaccurate for NZ stocks :(

try here MAC....and thanks for picking up on those errors.
http://www.findata.co.nz/login.aspx
http://www.eoddata.com/download.aspx?e=NZX
probably have to subscribe

[MAC]

many thanks hoop, appreciate your experience and advice.

[CJ]

Should see the NZX have a better day.Finally some green on my quote charts which is a great releif from the red over the last few days.

Of course the only company that is red is the one I want to sell

[shambles]

Great Post Hoop, appreciate you sharing.

[Hoop]

......

Expecting to see a nice rebound in many NZ stocks that have lost ground over the last few trading days!
Some may see these "up days" as an opportunity to offload some more of their portfolio risk and realise their gain...eh?

[000831]

Some may see these "up days" as an opportunity to offload some more of their portfolio...eh?

Yeah, big guys always doing so. rebounce for one or two weeks, then continue to dump.

[Hoop]

Could well be the case. I'm still of the opposite mind-set (for now), accumulating more on the "down days". IMO everything is much more reliant on economic data now that the FED has strongly signalled it's intent to ease back with QE, IMO sooner rather than later if economic conditions all it. So I’m particularly looking at consumer spending, housing, and manufacturing data coming out of the US and to a lesser extent the Euro zone. There is obviously a lot of room for things to improve there and IF they do I see no reason why equity markets can't head towards their 2007 peak (I'm talking capital indices not gross). My tune will change though if trends in economic data aren’t signalling improvements OR if/when we approach 2007 highs. I also feel now is the time for Kiwis (if they already have a good NZ based portfolio) to start considering a heavier weighting towards US and potentially AU stocks.

Interested in others thoughts….

I reliance on a bubbling economy to increase the shareprice is possible but not always true....there is a poor correlation between Equity Market Cycle / Economic cycle. ..sometimes it happens sometimes it doesn't....Equity Investors should not rely on the economic cycle..yet nearly all do...you hear them say that they can't wait until the economy comes right...

You hear all the positives about the good times...so lets balance out the positives with some negatives that can affect Equities during the boom times
.....Central Banks tighten money supply to dampen signs of increases in inflation by increasing interest rates.....company debt expenses rise
.....More consumer spending attracts new competitive players into the consumer market, existing players expenses increase to protect market share
.....More listed companies enter the exchange competing for investors moneys as well as most investors are fully invested....a lot of investor money is unavailable therefore available money supply for Equities shrinks or gets redistributed causing some stocks to suddenly "correct"
.....As interest rates rise Equity market competes by lowering the PE Ratio to increase yield rates.
.....With increasingly tightening of the money supply there is an increase in financial instruments offering attractive rates of return by Companies taking on more debt so to expand and meet the increasing consumer demand.......................extra debt expense
.....An increasing employee expense as Companies take on new workers to cope with increased consumer demand and protect their market share.
.....Supply/demand //price interaction..........price rises when demand outstrips supply and puts strain on supply lines....Logistic price increases, raw materials prices rises, Oil , Power
.....Lack of available investment money forces investor speculation ...buying high cost debt and entering into stretched supply lines such as oil, minerals etc to make a fast $$$...thus creating well overpriced commodities "bubble" that relates to extra manufacturing company expense


Let the good times roll ...eh :D

Edit: The best time for Equities strangely enough (illogical to the layman) is when Equities are oversold...due to political/ business/economic cycle environments being turbid and in a uncertain state, and the investor has to climb that "wall of worry" for that year or two before the good times return

[000831]

Just noticed that the Japanese N225 stops for lunch everyday.

How quaint! :rolleyes:

Yes, Asian markets have break for lunch there. very good for us

more focus on Japanese 10 years bond yield. it is 0.92% now.

[Hoop]

Interesting thoughts Hoop and I do agree 100% with your first and last (the edit) comment. The rest are all fair observations but I think some are not very strong in this current climate so thought I would offer some counter thoughts:

Several of your points (point 1,4,5) are based on the possibility of tighter monetary policy via increased interest rates; Given that tighter monetary policy right now means the FED backing off (or indicating they are backing off) of unprecedented QE I don’t see the likelihood of interest rate hikes in the short to medium term as a strong possibility. The whole reason QE was necessary was because interest rates were at their lower bound, hence increasing interest rates is two giant steps away from where we are now. For businesses this means cash is still cheap, for investors the comparative advantage would still appear to be in equities as opposed to fixed interest or bonds.

Also, recently I had the pleasure of attending a seminar by an ex-chief economist of the First National Bank of Chicago and was also able to discuss some aspects of today’s economic climate with him after. One of the things we discussed relate, I think, quite closely to several of the points you make (points 3 and 8). In particular that QE has left banks and businesses awash with cash that is essentially just sitting there. I therefore don’t think there is a lack of investor money out there, and also think current businesses are very well positioned to take advantage of any economic upturn.

Points 2, 6 and 7 could arguably be seen just as easily as positives.

last first...yeah sure 2,6,7 can be both ways ...but a humming economy does put strain on the system ...how often have you heard from a CEO "profits would've grown if Joe Bloggs had fillfulled his obligation to supply us with raw materials we had the buyers out there waiting...or the unions refuse to move goods because they expect their workers to receive some benefit from the economic boom....or the extra machines on order haven't arrived ..etc.

The banks awash with cash...doesn't automatically translate to available money for the Equity market...There are reasons why a bank has a lot of money.......There are other markets than the Equity Markets that may be perceived by the investor to be a better bet. Us Kiwis moan about our good companies being takeover cheaply...the reason is obvious the NZX has to be second fiddle to the Kiwis love affair with the property market which has now reached to a point in some areas of being in a bubble.

This also raises another point... available money on Wall St does not translate to having available money on the NZSE...it just happens that the NZx50 oscillations are similar to the S&P500 at the moment..it doesnt necessarily mean that we will stay in sync for the next year or so.

In saying that, both Equity markets look oversold to me and must be due to correct...

[Hoop]

Fair points Hoop, so where do you sense we are placed right now? both from a TA persepective TA is favouring a mild bull correction the TA Target is around 4400 which relates to about a 6% correction...remember this 4400 is distance travelled.... the time frame is unknown the NZX50 could quickly correct or could take several months...Could the Correction be more stronger ? of course it can TA Targeting is using past data to predict the future TA target, it is only a line drawn in the sand that has a mathematically 70% chance of reaching but mainly based on a holistic view point? I like to see a continuing slowly improving economy/business cycle with a cooling off of the property market bubble and to some extent the Equity market ...From a cyclic viewpoint the present Equity bull is now a senior citizen so it wouldn't surprise me if the Equity market stagnates and starts to disappoint from here on in the face of improving company results...NZ has some major weaknesses that disturb me These weaknesses have always been with us so its nothing new, such as NZ dependence on one commodity (dairy) by one huge (too big to let fail?) monopolistic company, NZ's inability to control its own currency and thirdly the continual Kiwi love affair with the property market
Are you long or are you starting to bank some cash?.. Ive just cash out most of my longs this week so went from 2% to 75% cash So far the IRD will be very happy with me this year...All peoples exits are due to different reasons My decision to realise my gain now was due to my poor overall capital gain since 2009 which is well below this Bull market gain since 2009. I got clobbered with Pike River Coal failure which when calculated by diminishing returns I have to make +300% since 2009 just to get my portfolio back to where Mr Market is now. I can't afford to give anything back to the market during corrections if I want to reach my 300% goal

As I said earlier as long as economic data continues to generally improve and so long as markets don't get too highly valued (2007 Capital Index peaks) I'm still long. If it wasn't for PRC I would probably ride the bull market corrections too

Also the later point you raise about NZSE vs the S&P500 is part of the reason I am more inclined to weight my new investment money more towards the US.
Hmmm maybe ....if only for the currency play....Wall st Equities bull is the same age as NZX50 bull... its also a very healthy senior citizen.

[000831]

Nikkie 225 down by 3.25% below 14000 so far today, Hong Kong HSI below MA60. ...............

[MAC]

NZX has been sitting smack on it's trend line for three trading days in a row now, tomorrow could be an interesting watch heading into the weekend.

[000831]

Japanese down 5% for the day, another turbulence coming

[Hoop]

NZX has been sitting smack on it's trend line for three trading days in a row now, tomorrow could be an interesting watch heading into the weekend.

Yes very interesting next few days...The pacific area is looking rather grim....NZX50 as you say Mac....The All Ords retesting it 4900 major double top trough support its technicals are breaking down the MA50 is a goneburger...The Nikkei 225 closed today on its conjunture point.....

A can't understand the European market at opening, its totally ignored the worlds 4th biggest economy share market melt down today. The down under share markets didn't reflect much either, the NZX50 down 0.4% Aords down 0.8%...
Hmmmm...Its all too much for me ...so I've used the wimp strategy..and cashed out

http://i458.photobucket.com/albums/qq306/Hoop_1/Nikkei22530052013.png (http://s458.photobucket.com/user/Hoop_1/media/Nikkei22530052013.png.html)

[000831]

Yes very interesting next few days...The pacific area is looking rather grim....NZX50 as you say Mac....The All Ords retesting it 4900 major double top trough support its technicals are breaking down the MA50 is a goneburger...The Nikkei 225 closed today on its conjunture point.....

A can't understand the European market at opening, its totally ignored the worlds 4th biggest economy share market melt down today. The down under share markets didn't reflect much either, the NZX50 down 0.4% Aords down 0.8%...
Hmmmm...Its all too much for me ...so I've used the wimp strategy..and cashed out

http://i458.photobucket.com/albums/qq306/Hoop_1/Nikkei22530052013.png (http://s458.photobucket.com/user/Hoop_1/media/Nikkei22530052013.png.html)



The graph lets me back to 2007 in Chinese market. The index dropped from 6000 to 2000.

Could you pls draw a Hong Kong one for me?

[Hoop]

This really puts the "Japanese bubble" into perspective.

http://www.fool.com/investing/general/2013/06/04/putting-the-new-japanese-stock-bubble-in-perspecti.aspx

As you were people, doomsday is not this week!


Conjuncture point has broken since my chart was post..this is a major break and could become a potential problem....Small bounce up to form the right shoulder then maybe a further Manhattan type fall..eh?

By the way Moosie ..nice 30 year chart.... lower highs and lower lows......try drawing a primary down trend line starting from the 1991 right shoulder.....could be a secular sucker rally ..eh....or maybe ( you'll need hope here) its due for a primary break back to a long range bull market cycle...eh.

[000831]

u still in? Another problem raised from south east Asian area. Phillipine (inflation 5%) , Thai, indonesia (5.47%), Singapore, index crashed the same trend with Japan. Foreign investments all outflow back to Japan and US.

Phillipine and Indoesia would be the first to lift up interest rate.

Ready to short some tech stocks in NZX once DJI break through MA60

[Hoop]

Always more money to be made Sparky. Don't you know us young folk never sleep and don't know about this weird game you older generation like to call "Whack! F***!"?

Moosie ...think Japanese :D:D

Disc: sold all NZX shares end of May...cash 85%

[000831]

Amen barcode ;)

Losers outpacing gainers at a factor of 7 to 1. Anyone having a horrible day out there??? I think we're officially near to correction territory as well!

Maybe it's just beginning........... Japanese President Abe's politician career could be end up for this. They changed president almost every year in the pass ten years.

[Hoop]

Today's Chart ... 11.15am

from my post #856 27th May 2013

The NZX50 has been breaking down since last Wednesday..it was Friday when it became noticeable and today it was expected and Mr Market did exactly as predicted ..closed at 4478 down 48 (-1.1%).

Since there has been only minor negative movements the target price for a bottoming is 4400 (70% chance) and would last a month or so, making this another very shallow correction....... However I sold down a major part of my portfolio at opening today as I think the previous rise was too steep....It is well above the primary trend and primary S&R line...25% above its primaries is too far up I think (in other words its risen too high too quickly).....Most of the time a 20% decline triggers a bear market which lasts about 18 months...In NZX50's scenario a 25% decline would still be just in Bull territory... it would be an very rare event if that happened.

The NZX50 bull is over 4 years old...I have seen bulls around 7 years old but on average the expected lifespan is just under 4 years old. This NZX50 bull has had a new lease of life and is extremely healthy atm... sudden cyclic deaths are rare and it would take a black swan event to cause it......normally deaths occur slowly and quietly over a period of months with most investors with positive outlooks oblivious to the cyclic reversal assuming it is another but more potent bull market correction and are buying in early to get these "cheap" shares ..this buying "cheap shares" behaviour causes a bearish double or triple top type patterns to form..........we have yet to see this pattern EDIT: The AORDS is showing one now

So what will happen?
We can't predict the future so we take one day at a time and one step at a time.......First step is watch the MA50 and the 4400 area and see where that leads us to...


.......First step is watch the MA50 and the 4400 area and see where that leads us to...

MA50 broken ...NZX50 has entered into the 4400 area

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=NZ%3aNZ50GR&uf=0&type=2&size=4&sid=1392984&style=320&freq=1&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=8&rand=328503222&compidx=aaaaa%3a0&ma=1&maval=50&lf=8&lf2=512&lf3=1024&height=981&width=1045&mocktick=1

[Xerof]

I think the butterfly flapped it's wings in Japan first......

[MAC]

Looks like an up day for the market NZ50 4455. Back above 4400 Hoop ?

[Hoop]

I think the butterfly flapped it's wings in Japan first......

Japan is a worry Xerof....QE is a dangerous tool if mismanaged.


Looks like an up day for the market NZ50 4455. Back above 4400 Hoop ?

Seems rather strange ...eh?? ...It was down -1.2% when I left ...came back turned on the computer to see the carnage and there wasn't much to see..NZX50 regained the loss to close flat...The other overseas markets didn't recover....what happened??

[troyvdh]

Hold on...returns required i.e. deposits et al at banks do they not remain eclipsed by divs from companies in the sharemarket....i.e CEN and Pfi ..who have both forecast greater payouts....am I wrong...why the panic

[RRR]

Thanks Hoop, correction is good for the market. Markets don't go up in a straight line! I do hope this is just a correction:)

[MAC]

We may be seeing the ASX200 bottom at the MA200 also ?. The short term test for the NZ50 would seem to be if it returns above it's prior trend line next week, presently at 4501, then the avoidance of a double top over the next few weeks ?. Would be happy to receive advice from those with TA experience much greater than mine (novice).

[POSSUM THE CAT]

Sparky how do rate against the cat?

[RRR]

NZX forum is much more exuberant than ASX forum by the numbers at least:cool: It was exactly the opposite not so long ago and many posters boasted that they don't care about NZX and the forum - felt very neglected and unloved:ohmy:. Time to buy Ozzie?

[Billy Boy]

NZX50 now within 275 points of the ASX. Slashing and burning our way too within striking distance of taking over the ASX!:ohmy:
YUP.... Singapore exchange is next
:D:D:D

[Merc]

... yes, the bull is now 4.5 years old, but relative to earnings, the companies are at or close to full value...

I am a semi-novice in the share market with the occasional purchase over the years tending to trigger a world wide melt down in the share market (and here you thought it was external factors like an Asian crisis).

But I am a landlord who has a pretty good grasp on the property cycle and how it fits within economic trends. The property market tends to follow a roughly 10 year cycle of over-valued houses, recession, under valued houses, recovery, boom, correct value, bubble, bust... start all over again. The last bust was late 2007.

Presumably the share market follows a similar cyclic pattern. Would this be similar in the share market and if so, where in the cycle would you pick the current position to be?

[Merc]

Thank you - your chart also happens in the property market as well :)

I have a feeling that my buying shares now shouldn't trigger the usual recession (although if I'd had spare cash in the last year or two it would have been more certain) but it does pay to check.

The usual share charts only seem to go back 10 years which doesn't help in comparing cycles with cycles. Apparently the last cycle was the highest since WW2 so I'm somewhat cautious as to how high or far this one will go.

Does anyone have any charts of historical trends and/or theories on this?

[noodles]

I'm pretty sure the 1987 bubble was one of the highest, along with 1929 and the 2000 dotcom bubble (all in inflation relative terms). 2008 was the highest in recent times. were nowhere near a bubble right now

There may not be a share market bubble, but a few commentators have said the bond bubble is bursting.

What does that mean for the sharemarket? Probably not very good. The recent correction probably has a lot to do with the us trasury yields increasing sharply.

[Hoop]

The facts :.... The NZX50 bull is 4.25 years old......Average life span of a bull is 3.75 years old.....

The risk of a cycle reversal to Bear grows with each Bull correction...and there's an excellent chance the next bull correction is upon us now.

Use bell curve methodology to work out the old bull's chances to live on

Hoop
PHD (doom):p

[Merc]

That figures - I bought some shares last week...

What is the average life span of a Bear?

[troyvdh]

Merc...keep an eye on interest rates...as we all know...an increasing amount of folk (ie retirement) require a return on any investment to maintain/sustain a given life style....currently many shares offer great divs ...folk talk about a "bubble in the housing mkt"....daahhh....to build a new house now..and more so in Canterbury (unless you have to) one would have to be quite desperate and clueless....i.e. over priced/built in a frenzied atmosphere.....Im pretty sure that a home being built now will in time adopt a "nickname"....similar to houses built in the mid/late nineties....i.e. poly castles.....we have thousands of them in CHCH...all sadly doomed....some say 20 billion dollars some say more nation wide....cheers anyway...troy

oops sorry ...also (as you are probably aware as a fellow landlord)...what is the likely consequence about somewhat insane increases in building costs on existing properties,,,,gee it aint rocket science is it. eh

[Cool Bear]

I used a very crude unscientific indicator of my own based on a 5 wk moving ave advance vs decline on the nzx and it is telling me to sell. Moved a bit to cash th last few days. Would have done it a week or two earlier but was away with little access to the net n my spreedsheet.

[Hoop]

That figures - I bought some shares last week...

What is the average life span of a Bear?

Welcome to sharetrader Merc.

Bear cycle lifespan varies much more than a bull cycle lifespan so to average out a bears lifespan would mostly be inaccurate. Its best to say it ranges mostly between 6 to 18 months.


I am a semi-novice in the share market with the occasional purchase over the years tending to trigger a world wide melt down in the share market (and here you thought it was external factors like an Asian crisis).

ahhh...so we have you to blame..eh? ;)

[CJ]

By all accounts the OCR aint changing until next year.I agree wit this and the number of deals the banks are doing to get people to fix IMHO confirms that believe this too.

[Merc]

...ahhh...so we have you to blame..eh? ;)

Undoubtedly! Timing wrong every time.

The first rental we bought was "on luck" 20 odd years ago. The neighbours told us to so we did. And the timing turned out right.

The second house we bought was the most valuable of the houses we have since bought. It was bought on a falling market in 1998 (it fell a lot further) and sold on a rising market in 2003 (it promptly took off upwards). It resold recently for twice what we sold it for. 2 years from now it will be worth even more. Oh and the first lot of tenants moved after a year and, as rents had actually gone down in that time we took a hit in the "dividends" as well.

Why valuable? The incredible learning curve - it taught us a huge amount about cycles and the maths!

We bought a few others in the next couple of years based on the maths and they have done rather well.

So, with large mortgages, why the share market now? Elderly mother with shares who claims ill health when it comes to decisions. She still thinks Ron Brierly is wonderful - and holds GPG shares.

Nothing like a little of my money in shares to make me sit up, pay attention and be in a better position to monitor what is going on with her - considerably larger - portfolio. I do know that most of her shares are worth a lot less than they were in 2007 when I put them in a watch list.

Cyclic share market: Was reading last night about secular bear markets... interesting...

[MAC]

Household debt hasn't decreased substantially since 2008, in fact it's been on the rise again since last year. Property market is climbing at 10%p.a. When interest rates do start to rise again next year it could be an interesting watch.

4594

[Hoop]

........

Nothing like a little of my money in shares to make me sit up, pay attention and be in a better position to monitor what is going on with her - considerably larger - portfolio. I do know that most of her shares are worth a lot less than they were in 2007 when I put them in a watch list.

Cyclic share market: Was reading last night about secular bear markets... interesting...
Merc ...Have a look at the Investing Strategies and Secular Bear Market thread (http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets)...Winner 69 and I did some extensive work on his thread....The secular bear cycle is still operating on many global markets so this thread is still current ..... The Wall St Secular Bear is 13 years old now. I think the secular Bear is operating on the NZX50 its hard to find Annualised PE Ratio data stretching back decades as the NZX50 was created back in 2003 and is a different animal to the old NZSE40 or what ever it was called back then...Winner69 may provide us with the NZ data..

[Hoop]

quote Post #856 27th May (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News!/page58)..........So what will happen?
We can't predict the future so we take one day at a time and one step at a time.......First step is watch the MA50 and the 4400 area and see where that leads us to...

.................................................. .................................................. .................................................. ......................................
6th June Post #909 (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News%21/page61) ....MA50 broken ...NZX50 has entered into the 4400 area

.................................................. .................................................. .................................................. ......................................

Technicals still not great...The failed rally is a pull back (see Bulkowski's website here (http://www.thepatternsite.com/pullbacks.html)) and has made life a little more pessimistic.
Of interest is the previous post re: secular bear cycles...they are usually seen as a very large trading range pattern ...notice the secular break on the chart...we are at the top of that long term trading pattern again ..so another bearish sign for the NZSE.



http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5011062013.gif (http://s458.photobucket.com/user/Hoop_1/media/NZX5011062013.gif.html)

[Merc]

Knowledge is power, and I have gained vast insights into markets over the past 2 years as well. I feel I am at a great advantage compared to 98% of people in my age range and am set up for the future, with the sky the limit. The best thing you can do is acquire that knowledge at the earliest age possible.

Absolutely. But with two years experience - just remember that there are cycles and there are cycles and also cycles within cycles. There were hot and cold days during the Ice Age.

In your 20s you can take far more risks than you can when in your 50s as time is on your side.

Also remember the Elliott Wave Theory.

For the last month or two I've been reading, analysing, ghostly trawling through here (and getting some great tips!) and bought two lots of shares. As my investments are more about learning than creating mega wealth (although I wouldn't say no to this bonus!) it has been $3,000 in each company. Current plan is for 2 more for similar amounts within the next month or two. Haven't figured out which ones yet but into analysing cycles first.

[Merc]

.... I have been trying to warn colleagues and friends off buying a house/land over the past few months ...

This landlord holds opposing views

Short term bubbles can burst, long term it is the best investment ever made. Yes interest will go up so fix for longer terms! Personally I believe in mortgage averaging - splitting the loan into chunks that expire at different times.

MacDonalds invest in real estate, hamburgers merely pay the rent; Rymans invest in real estate and use...<think about it> to pay the rent.

There are around 12 identified factors that affect the housing market but the biggest is supply and demand - which is why Auckland and Christchurch have taken off big time. Other towns follow when those who are struggling finally get the message they can have a better life style with more available cash if they move there.

The solution to the current Auckland market isn't for an increase in building but for a large bunch of Aucklanders to move elsewhere. They can start with one of my tenants who I will happily donate to the cause! Lower rent elsewhere would increase their disposable income thus allowing them to pay their arrears faster. As they seem to have issues with working it would also help the taxpayer through a drop in their accommodation supplement.

[Merc]

...EDIT: Oh and the other 10 factors you mentioned, I'd be really interested in as well.
Cheers

There is a chart in one of my books, but a quick scan shows it probably isn't in the one I thought it was.

One that I remember was low bank interest rates. People diving in because the figure stack up NOW without factoring in that they change.
Once rates go up some will not buy and/or sell, others will commit and over extend themselves. Immigration was another. The others were similar things that affect supply and demand.

Solving the Auckland crisis? With the population expected to double in, what was it - 20 years? it means more houses. Upwards, infill or outwards. By which time the roads will be totally bottlenecked and people will be sleeping in their cars in the office car park to get to work on time (if they aren't already)!

Seriously - solving the housing crisis involves other towns setting themselves up as ideal destinations with plenty of jobs. Hamilton, Tauranga, Napier... all have the mass and infrastructure to be able to do this. But I can't see this happening over night or in the near future.

Years with 7s in them tend to have been the historical peaks but of course cycles can compress or extend so don't bank on 2017 being the peak in the current climate. I'm sort of using it as a guide but will be watching closely

[enzed staffy]

The government needs to remember theres more to NZ than just Auckland. Supporting other regions would at least start helping "other towns setting themselves up as ideal destinations" instead of strangling them at every turn - Dunedins Hillside work shop closures come to mind - we gave the contract to the china cos they were a little cheaper and twelve months later we were repairing every wagon they made at the cost of millions.
meanwhile hundreds lost their jobs.
Selling out our companies to overseas buyers for short term gain another - FPA comes to mind - what do you know another kick to Dunedin. I'm sure other regions have similar stories.
We need to take a bit more pride, accept a little less profit , to maintain our jobs and skills in NZ- they won't come back.
The rest of the country is not uniformly benefiting from the housing boom in Auckland, or the capital gain even if their preferred investment is housing

[enzed staffy]

I'm not nearly as jaundiced as that sounds

[troyvdh]

Dear turmeric...I could well be wrong here ....its my belief that what JK was saying was that there was (and this my take of it) a definite pattern of companies choosing to relocate their headquarters in Auckland ...and I suppose that JK is a believer in "Less government" is the way to go then Is he actually wrong in that should the nats win again...there may well be a diminishment of public employees.....having said that I recently rode around Wellington....Island bay and all...and thought it was fantastic....a real joy on a sunny day......cheers

[janner]

Key himself said on radio tonight.. In reference to the GCSB fiasco .. "Every thing we do is outside of the law "..

10pm 1zb..

[Merc]

... EDIT: Oh and the other 10 factors you mentioned, I'd be really interested in as well.
Cheers

The book was "Grow Rich with the property cycle" by Kieran Trass

Kieran is the one who has heavily promoted the Property Clock. Time for a reread as although it is a property book shares fit in to the cycle too.

An investment course I did years ago showed how all investments inter-relate. e.g. when all is gloom in other investments people stockpile gold - which promptly pushes the gold price to new levels. And when property hit the heights in 2007 then crashed but the maths still didn't work the investors quietly turned to shares.

Factors include:
DEMOGRAPHIC
- population growth
- Property vacancy rates
- Employment
- Property construction
- No of people per household
FINANCIAL
- Property ROI
- Rents
- Incomes
- Property Finance Availability
- Gross Domestic Product
- Property Values
- Property Affordability
EMOTIONAL
- No of days to sell property
- Gentrification
- Property Listings
- Property Sales

[CJ]

Question: has Kieran Trass grown rich?I think he did very well for himself but then went a bit crazy and become a supporter of Hubbard saying he was being unfairly treated (despite costing the Govt $700m+)

One of his trainees is also doing well and is now president of APIA.

[MAC]

I’d like to say that I’ve appreciated a lot of the discussion on this and other threads in regard to whether we are encountering a bull market correction or a bear market reversal. Complements to you all.

I understand secular and cyclical market technical’s, the average age of bull markets, and the age of this bull market. But, when I spin around I do not see the exuberance required to catalyse a reversal to a bear market. I’m not suggesting that there aren’t issues out there, or over the horizon, but at present it feels to me to be more like 1984 or 2005 rather than 1987 or 2008.

1986: My flatmates were having a pissing contest over how many brierly shares they had accumulated on their credit cards. In what seemed like a short duration every set of traffic lights in Wellington where I was living suddenly had a shiny new BMW. It was clear to a lot of us that this was not going to last.

2007: I was living in Auckland, young folk in my office were buying new homes with 5% deposit, smoko room discussion was how to buy self-funding rental properties, and remember all those property development shows on TV. Again it was clear it wasn’t going to last.

I’m just a humble observer of life trying to understand the view of others, and perhaps I am missing something.

Can those with a bear view convey to us all which market they feel is about to burst and what signs of extreme exuberance you feel are manifesting in making a bear market assessment at this time ?.

[000831]

Updated news, ten years US government bond yeild raised to 2.25% this Tuesday. South East Asian and South American share markets crashed as JAPAN. Contigence may occur.

[winner69]

The numbers man said - Contigence may occur

Contingence sounds painful mate - is it catching? is it terminal?

[Xerof]

Not sure if he meant contagion or incontinence, but both are probably suitable alternates

[Hoop]

I’d like to say that I’ve appreciated a lot of the discussion on this and other threads in regard to whether we are encountering a bull market correction or a bear market reversal. Complements to you all.

I understand secular and cyclical market technical’s, the average age of bull markets, and the age of this bull market. But, when I spin around I do not see the exuberance required to catalyse a reversal to a bear market. I’m not suggesting that there aren’t issues out there, or over the horizon, but at present it feels to me to be more like 1984 or 2005 rather than 1987 or 2008.

1986: My flatmates were having a pissing contest over how many brierly shares they had accumulated on their credit cards. In what seemed like a short duration every set of traffic lights in Wellington where I was living suddenly had a shiny new BMW. It was clear to a lot of us that this was not going to last.

2007: I was living in Auckland, young folk in my office were buying new homes with 5% deposit, smoko room discussion was how to buy self-funding rental properties, and remember all those property development shows on TV. Again it was clear it wasn’t going to last.

I’m just a humble observer of life trying to understand the view of others, and perhaps I am missing something.

Can those with a bear view convey to us all which market they feel is about to burst and what signs of extreme exuberance you feel are manifesting in making a bear market assessment at this time ?.

Good times feels "normal" ..Only after the party ends does it then feel exuberant.

[MAC]

I can largely appreciate that not having full retrospective insight is a risk, I also understand and respect the view that a sound risk management approach is to raise a cash position when a bull market cycle is looking statistically long. I guess the contrary risk is that one may become out of the market for too long and suffer a loss of return.

I am a believer that there are usually at least some signs that a bear market may be upon us though.

David Darst of Morgan Stanley is one of the few vocal public economists I've a healthy respect for. At the 2013 SALT conference in Las Vegas he floated a 6 point bear market checklist which may be of interest per link below.

http://www.cnbc.com/id/100720862

[000831]

Japan down 5.13% since openning, Shanghai down 3.39%, Hong Kong down 3.16%

Phillipine down 4.39% Thailand down 1.32% , Singapore down 1.26%

Asian foreign investments are flowing back to Japan and US.

us ten year government bond yield : http://www.bloomberg.com/quote/USGG10YR:IND

JAPAN ten year government bond yield: http://www.bloomberg.com/quote/GJGB10:IND

[000831]

1997 Asian Financial Crisis

[000831]

1997 Asian Financial Crisis


Indonesia raised Fasbi by 0.25% yesterday. Other countries in this area will follow and try to keep foreign investment.

[JohnnyTheHorse]

About to test that 4400 support again.

[Goldstein]

You know the market is in trouble when RAK and PGC are leaders for the day...

I was trying to think of something witty to say, but I don't think I can top Moosie's.

Hard to judge where to from here. I pretty much cashed up a few weeks ago, only because the stocks I had were looking a bit bloated with sellers starting to build. I'm a bit lucky in that regard..

[000831]

Asian financial crisis, the only thing I would say. Phillipine dropped by 6%, Thailand dropped by 4%.
The two countries should lift up interest rate immediately to stop foreign investment run away. More like 1997.

[iceman]

Here is an interesting excerpt from Tony Alexander commenting from the Fieldays at Mystery Creek. It gives an interesting insight into where our farmers stand in todays economy. Thought it was somewhat relevant for the discussion on this forum :

"Few borrowers appear aggressively concerned about interest
rates apart from wanting some indication as to
the proportion of their debt they
should get fixed, for what term, and when. Farmers tend to take a longer
horison for such fixing than city folk who think an 18 m
onth fixed rate is managing one’s risk. Farmers tend
toward the five year term if not seven, and I have
been reminding all and sundry that this year deals mature
for the many farmers who signed up ten year fixed rate
s back in 2003 when rates fell sharply on the back of
a cut in the Federal Reserve’s funds rate to just 1%.
I am suggesting thinking about fixing 5 – 7 years for half
one’s debt and not trying to pi
ck when fixed rates will rise (looking to fi
x just days before they do) because in
this very uncertain world we cannot pick when the
next big upward jump in
fixed rates will come.
But while some farmers have asked about fixed versus
floating, their queries hav
e been outnumbered three
to one by those who have asked instead about where to in
vest their money in order to get a decent return.
Most of those asking appear to have funds on term
deposit currently and want a
higher yield but are not
prepared to chase the sort of pr
oducts which caught so many people
out back in the 2000s when the chooks
came home to roost for so many crooked and poorly run finance companies.
I am not offering advice but simply
note that there is massive uncer
tainty still around the world and that
sharemarkets, exchange rates, and fixed interest security
prices will experience very
high volatility in coming
years. Volatility by definition means risk so in order
to manage that risk while
seeking better returns they
should really speak with the so
rt of people like our private bankers who focus on such things. "

[Hoop]

We're going for another run (you heard it here first from the Moose!)

http://www.marketwatch.com/story/us-stocks-rally-as-fed-fears-abate-2013-06-13?siteid=yhoof2

Yes as the S&P500 and the NZX50 are in sync (oscillations in line) at the moment I would assume today will be an up day.....
If it is an up day.... it will be another successful test off the 4400 and be a buy signal with very tight stops....this is positive news for the bulls as it strengthens the 4400 support area. (the bull market correction end point area).

The TA target (4400) has been reached (that 70% chance is now 100% chance) (see my Post/chart 27th May) (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News!/page58)...however I need to see more than one buy signal before I buy back in. My investment discipline is more cautious than some...

The fear and risk of a correction may be slightly lessened today which will bring the bulls out to play...however all the bearish signs are still present.

Disc..85% cash

[Cool Bear]

No, wait a few more days, Hoop. Could be the dead cat bouncing.

On the other hand, the recent drop may just be a correction but has it finish correcting? May be a few more days/weeks yet.

[Hoop]

wait too long ans the boat might have left. drop was on speculation QE will end soon; its not. time to buy.

Start buying Hoop :)

ahhhhh. the Exuberance of Youth

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcQcHIaT5Ti0zOePy59jdyRWxWneYNfwc c_CgCZCdhf4NMPHPT28

[Merc]

Recession, recovery, boom, bubble, bust, recession... The cycle repeats

My guess is 2011 and 2012 were recovery. Where are we now? Boom? And how long does this part of the cycle usually last?

Still looking for the answers in historical charts.

Relating this back to the property - there are always good buys in any market but strategy changes in line with the cycle. Just have to figure out this share cycle before too enthusiastically throwing money at it :)

[Hoop]

You guys are assuming that the business cycle, economic cycle and the Equity cycle go in sync together....I have some bad news if you assume that....Research has proved there is a poor correlation between the economic cycle and the Equities cycle.

[Merc]

You guys are assuming that the business cycle, economic cycle and the Equity cycle go in sync together....I have some bad news if you assume that....Research has proved there is a poor correlation between the economic cycle and the Equities cycle.

So where do you think we are in the share cycle?

[Hoop]

So where do you think we are in the share cycle?

Using TA discipline cycles don't matter you sell on the sell signals ..like now

However I do make it a hobby to try and figure it out....using past history and probabilities... One thing that most investors ignore is the fact that PE Ratio movement is the primary driver of any sharemarket...PE Ratios are also cyclic and the best way to track it is to "annualise" so to knock out the volitity "noise"...This past decade most annualised PE Ratios around the 1st world countries are trending downwards and company profits have to rise just to keep the sharemarket index at a flat line...therefore the Dividends tends to increase as the investors demand more for their investment $ This is typical behaviour of a secular bear market cycle....We have been in a secular bear market cycle for 13 years and the cyclic bull market cycles don't rise up into exuberant heights investors are more conservative with less speculating attitudes.

Unfortunately investors spend too much time concentrating on the secondary and tertiary drivers...day by day economic news drives the market only fleetingly and therefore it is called "noise"..ST forum is mostly "noise"...the more important market physics are ignored.

So where do I think we are in the share cycle?

Working of probabilities ....the current NZX50 bull market cycle is 4.25 years old and has risen 83% If it is in a secular bear market cycle then probably close to its top....Its a probability..this time who knows it may have already ended or it could go on for months years..

.however the risk v reward is very high....its always is when you arrive late to the party....As Sparky said we did all our buying years ago when the share were cheap
.
.


Unfortunately the data is hard to find on NZ stockmarkets....and not long enough period
.................................................. .................................................. .................................................. .................................................. .......
The USA markets data below 1871--2013 showing Bull market cycles
http://greenbackd.files.wordpress.com/2013/04/table_us_bull_markets_since_1871.png?w=640&h=456
Source: Shiller (2013)
Look impressive ...huh!
Now you all going to assume that...hey ..when the economy comes right it will go up even more so NZX50 +83% still have room to travel as it is still below the average.
In relation the Wall st 104% is low too.....right?
WRONG!!!.....remember reading the bit above about secular bear market cycles
Below I have colour coded the table into Bull markets within secular bull and bear market cyclesBull markets are muted affairs inside secular bear cycles...and the 2009/20?? bull is looking rather advanced and above its average rise at 104%...since that table was made the S&P500 has risen to +148%

http://i458.photobucket.com/albums/qq306/Hoop_1/Secularbullperiods.png (http://s458.photobucket.com/user/Hoop_1/media/Secularbullperiods.png.html)

[Merc]

Thank you Hoop, very, very interesting and just the type of info I'm looking for.

Yes I had caught onto the fact that the party is well underway, it was a lack of cash and other interests taking up my time that prevented me joining it earlier.

It is guesswork as to whether the party will take a breather in an orderly manner or take off into the rowdy stage where it will inevitably crash and burn.

I think my answer is don't throw cash at anything in sight but seek for the nuggets of gold amongst the noise and take care whilst learning the fundamentals - thus being in a position to maximize returns in the next cycle.

My first step a month back was to download all NZ shares into a spread sheet, work out what sector they were in and compare PE ratios (time consuming and there are no doubt easier ways but it was a brilliant aid to understanding). 2 or 3 sectors stood out better than others and one or two companies in each of these looked interesting. Some of the anomalies turned out to be penny dreadfuls, one looked like a nugget of gold (and I bought into it). Time will tell if it really is gold. Several others appeared worth another look and I've taken a punt on one of them

[kizame]

Thankyou Hoop, very very interesting.

[Cool Bear]

Using TA discipline cycles don't matter you sell on the sell signals ..like now
Thank you, Hoop.

[MAC]

Hoop, given the charts are where they are, do you feel we are statistically likely to see a final push higher this year, a double top for instance, or do you feel is it all down hill from here ?

[shambles]

Hi Merc, would you mind sharing the name of the companies you recently bought into? Regards, Shambles

[Merc]

Remembering that I'm still in major learning curve mode and dipping a toe in rather than mortgaging the farm to the hilt (i.e. I could be wildly out) - PEB and CNU

[Merc]

Thank you Sparky. If wrong - we blame The Clown :)
Although, to be fair, both of these were on my, rather short, "Interest List" BEFORE coming to this forum

Snakk also appeared as a possible anomaly in the statistics. But although there is a highly entertaining thread, as I detest mobile phones (had one for years), suffer from "ad blindness" and take marketing people with a bag of salt it doesn't seem like a good match for me. I'm watching though and will be interested to see where it goes.

[MAC]

There's been much recent doom and gloom on this thread, perhaps rightfully so or perhaps we are presently in the midst of a correction, either way thought I would offer some balance.

Below are some links of reading interest in respect to the phase of the present secular bear cycle.

Many analysts believe that the present secular bear cycle is at or close to an end, and that we are at an inflection point of a forward secular bull cycle formation.

Will the secular bear take us down, or, are the markets at the cusp of a secular bull formation which could just go up from here ?

http://www.moneynews.com/Gary-Jakacky/Obama-bull-market-secular/2013/05/08/id/503353

http://www.marketfolly.com/2013/06/market-strategist-jeff-saut-on-odds-of.html

[MAC]

Absolutley, if they are quality stocks presenting good value they will outperform over the long run, shouldn't loose sight of that. I take it that you've resisted any urge to totally cash up and hide in the wardrobe ?

[Merc]

Many, many years ago a lecturer told our class, "You can always tell the state of the economy by the number of cranes on the horizon." Over the years we have noticed this to be true. Times of boom the cranes are everywhere, times of gloom not a one to be seen.

It is the transitional times that cranes aren't the best indicator

[percy]

Many, many years ago a lecturer told our class, "You can always tell the state of the economy by the number of cranes on the horizon." Over the years we have noticed this to be true. Times of boom the cranes are everywhere, times of gloom not a one to be seen.

It is the transitional times that cranes aren't the best indicator

A lot of cranes in Christchurch.

[Hoop]

There's been much recent doom and gloom on this thread, perhaps rightfully so or perhaps we are presently in the midst of a correction, either way thought I would offer some balance.

Below are some links of reading interest in respect to the phase of the present secular bear cycle.

Many analysts believe that the present secular bear cycle is at or close to an end, and that we are at an inflection point of a forward secular bull cycle formation.

Will the secular bear take us down, or, are the markets at the cusp of a secular bull formation which could just go up from here ?

http://www.moneynews.com/Gary-Jakacky/Obama-bull-market-secular/2013/05/08/id/503353

http://www.marketfolly.com/2013/06/market-strategist-jeff-saut-on-odds-of.html

Hi Mac.
I've read both articles...both say trust me I know what I'm doing (quote Sledgehammer (old TV series)......Gary Jakacky doesn't seem to grasp the secular theory concept as he runs off target with macro and micro events to justify the secular movement..instead of the theory itself..
Jeff Saut..seem to know little more about secular stuff...but he too has fallen short...with no analytical reasons either..could be he doesn't want to lose his readers with the complex stuf....He mentions there are others out there that believed the Secular Bear was killed off by the nasty cyclic grizzly bear.....These claims have been argued out over the last 2 years and was put to bed..It seems Jeff either don't follow it to its outcome or he is in denial due to the "won't say die" attitude of the DOW and S&P500 that seems to want go up forever....
Both obviously haven't considered the fact that secular bear characteristic flat tops trading ranges is it's behaviour but exemptions do occur e.g AORDS 2003 -2007 freakish bull run...(see here) (http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets/page21)

Secular bear killed off in AORDs???? was debated by Winner and I a few month back...we needed more time to get more results to be sure....
The Wall St secular bear is alive and well and is tracking slowly downwards from the 2007 Exurbant heights...Time is not the factor with Secular theory ..it is distance traveled for the annualised PE Ratio to reach it reversal points it could 3 years or 20+ years or anything in between

What everyone must remember including those two authors are
1.....Cyclic market reversals are measured by the Index (share) price trends
2.....Secular reversals are measured by the "annualised" PE Ratio trends...Price has nothing to do with it.. There are examples of a secular bear market starting up during a cyclic bull market
3.....Research has proved there is no difference in the growth of the economy (GDP GNP) during either Equities secular bull or Bear Market.
4.....Different secular investment strategies are needed....Buy and Hold (sailing) works the best during a secular bull markets but terrible during the secular bear where active cyclic buying and selling(rowing) is the best Strategy.....Pension/insurance/superfunds funds are negatively affected by secular bears

The ending of a secular bear occurs when the annualised PE Ratio falls to below 10 stays under 10 for a length of time (not a normal PE Ratio spike as happened in 2008/09) then the secular bear ends when the annualised PE Ratio breaks upward above 10
http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets/page20
http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets/page15
http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets/page19

[Microsloth]

QE explained, and September looks likely for easing to kick in

http://www.reuters.com/article/2013/06/16/us-usa-fed-qe-idUSBRE95F05C20130616

[Mista_Trix]

Given the obvious waves in the markets every time easing is mentioned, logic would suggest that it isn't time to pull back until these waves become ripples. Surely easing while there's still panic in the markets suggests the timing isn't correct.

[CJ]

Let us be rational.

Bernanke has not spent all those hundreds of billions of dollars to build confidence in America to simply see it all turn to custard by violent turning off the supply of cash.

When QE ends, it will be because America itself is sure that its economy is standing on its own two feet.The jobs not done till its done.

[winner69]

All this QE is just making the rich richer (from rising asset prices) but the real dilemma for the those rich is that, as the gap widens between them and the rest of humanity, the natural human craving for fairness and having a slice of the pie will have immense

The last time the world saw such such disparities between the hyper-rich and the average guy was at the beginning of the Great Depression.

There will be change .... not this week or next week but sometime ..... when QE stops. QE has been unsustainable and slowly turning it off is not the cure, it has just exaggerated the underlying problem

[CJ]

QE has been unsustainable and slowly turning it off is not the cure, it has just exaggerated the underlying problemA bit late to pull out now though isn't it?

[000831]

updated news

China: two stated owned banks, Guang Da Bank and Xing Ye Bank triggered debt default. The amount is over 100 billion RMB.
The LIBOR is increasing up to 4.958% from 1.95% within 6 days.

[winner69]

IMO yes and no Sparky. I agree Bernanke wont be violently turning off the cash, they have been really clear about their intentions. The problem is, no one knows what will happen once the cash is turned off....
Also QE, by all accounts, hasn’t really had the desired effect many were hoping for. Yes, equity prices have risen and there is a wealth effect coming into play, BUT if what I have heard is correct the major problem is that instead of all that extra cash being used for investment (which in addition to increased liquidity, was the desired outcome), much of it is just being sat on. As a result while QE appears to have stabilised the US economy it hasn’t really provided the level of stimulus that was originally expected. Hence it has dragged on, much more money than anticipated has been pumped into the system, and therefore, the adverse consequences of what is unprecedented monetary policy, are arguably quite high. There is a lot of uncertainty amongst economists about how things will track from here.

Record Porsche sales in the US as average real incomes fall .... go figure

[winner69]

Mmm, wealth effect I suspect. Maybe the underlying reason Tesla surged too. Anyone following that stock?? $40 to $100 in about 2 months.

Dead right ---- wealth effect allows those who to spend .... and those who do see their wage packet gradually getting smaller and smaller over time

[Hoop]

Hey guys,

It interests me that this conversation about the market situation can be had without a single mention of QE. I must admit I am not very familiar with the topic of "secular bear cycles" and when I have the time I will go away and read up on some of Hoops suggested readings, BUT Im not sure how you guys can be comfortable having these discussions without putting it in context of the single largest driver of the equity markets over the last few years? You only have to have half an ear to the ground to realise that QE has driven equity prices to a point where there is a significant imbalance between equity markets and economic fundamentals. With the threat of QE ending the markets have gotten the jitters. Throw the BOJ's policies into the mix and you have increased evidence of the impact of QE.

Just thought I'd throw those thoughts into the mix and see what you guys think.

The reason why I haven't mentioned it very much is that fact that with every below "expected" growth or a recessionary period there is a natural easing of Fiscal and Monetary policies...the system naturally adjusts.

To show the charts overall objective, the complex stuff is filtered out

When dealing with charts it is not wise (and impossible) to mention all the thousands of factors that occur at any given point of the day/week/month...complexity clouds the resulting issues..therefore it is assumed that all these 1000s of factors "always" correct themselves, so they and other self correcting factors can be filtered out of the charts overall objective. If a spanner is jammed into the system's gearbox it will result in a market correction which may become visible on a chart...Therefore us chartists don't become paranoid and sweat the small stuff in going our charting programmes.

Chartists if they think a factor is affecting the charts primary objective they can add that factor and produce a secondary chart that shows that secondary objective, as has happened in the previous post by Moosie....

Think of it this way...Imagine you hoping into the car to drive to work, if there is no noise do you always think about and talk about the hundred or so cogs all revolving around at differing rates all tied into a network to produce the job they are designed to do such as spin the front/back wheels of your car.. ..you are not going to sweat over one cog are you..unless it fails to do its job...If it does fail you will certainty know about it as the engine/gearbox develops a noise then you know something is wrong...If there is "Media noise" e,g car stereo You are not going to say at work everyday that a certain cog in your cars gearbox is doing this and that. I don't hear anything but I'm worried about ...............eh??..

Do you all get paranoid about turning on your TV and think that a part might fail somewhere within the kilometers of circuitry...no you don't unless the part has failed.

One of the thousands of factors (cogs) in the economy which always gets media attention is the Monetary easing and tightening cog ..OK this is a bigger cog (with its own network of complex sub cogs) in the economic gearbox and ordinary people get to feel the effects of it when it slowly spins around and at certain areas of its revolution it get to cause pain onto the general public..this is a good sign as it proves its still working....

Global Financial crisis 2007...the gearbox (financial system) developed a rattle..The mechanics came in, repositioned the slipped cogs which advanced the Monetary cog to the easing position...so far so good all the cogs are working...but we are worried as we can't hear if there is any noise... because the bloody car stereo is turned up too loud and the passer-byes can hear the sub booming up to a kilometer away

Charts are good as they may (by filtering out all noises) sense a vibration..If the gearbox seizes it will suddenly happen but a chart "may" pick up that vibration warning...

Thinking about all the possible things that could go wrong clutters up ones brain forcing one's mentals to do false logic thinking. Politicians are good at this and use it as a tool...it always happens and it always works...that why our daily Media we read is full of crap. See Bob Jones todays article "Too many people have sense of entitlement" (http://www.nzherald.co.nz/media-publishing-industry/news/article.cfm?c_id=707&objectid=10888177)


All this QE is just making the rich richer (from rising asset prices) but the real dilemma for the those rich is that, as the gap widens between them and the rest of humanity, the natural human craving for fairness and having a slice of the pie will have immense

The last time the world saw such such disparities between the hyper-rich and the average guy was at the beginning of the Great Depression.

There will be change .... not this week or next week but sometime ..... when QE stops. QE has been unsustainable and slowly turning it off is not the cure, it has just exaggerated the underlying problem

QE has been mentioned by the acedemics for decades that it is a two edged sword and can only be handled successfully by a highly skilled swordsman...Bernanke has the qualifications but the powers of B around him certainly don't...and I not sure about that Japanese bloke....and the Europe outfit could picking this sword up as well..............
It seems everyone wants to have a go with this sword....

Hmmm..mucking around with a much higher more powerful engine to get you where you want to go ....Hmmm ,,,that provides stress to its other networked parts.....a blown gearbox perhaps...eh Winner

[Billy Boy]

Even if there is a clear signal which can be extracted from macro-economic data traditional chartist's wouldn’t adjust for it anyway would they? Stand to be corrected there though.
I agree .... I,m Not a chartist as I feel charts are a great history lesson.
Thats not to say I totally ignore them. But if a wave is created then all
ships will rock, some more than others depending on external factors that
made the wave. Or the building of the wave (GFC), It had to happen !!!.
Charts tend to display this in hindsight.
I learnt that lesson in 87. And I was lucky.
Hoop old son keep up the chart posts, I and others can always learn.
BB:)

[stoploss]

I think you might be mistaken about LIBOR. I am not seeing any movements such as those you indicate. Are you sure you didnt mean Chinese Central Bank Interest rates or something? LIBOR is the London InterBank Offered Rate.

http://www.telegraph.co.uk/finance/china-business/10123507/Fitch-says-China-credit-bubble-unprecedented-in-modern-world-history.html

[stoploss]

Interesting article, but unless I am missing something what has it got to do with LIBOR? "Shibor" maybe? You (and barcode - sorry I don't remember the numbers) may just be getting the two confused!

I am not getting it confused, just put that on, as it is possibly what he is referring to.

[stoploss]

That... Is... Not... Pretty... :scared:

No , I am not aware of an "emerging market " that hasn't run into trouble along the line somewhere , be a hit for everyone if they can't manage this one ....

[Mista_Trix]

http://www.nbr.co.nz/article/while-you-were-sleeping-optimism-lifts-equities-bd-141696

International markets looked good overnight, should be another positive days trading ... for the meantime at least.

[000831]

I think you might be mistaken about LIBOR. I am not seeing any movements such as those you indicate. Are you sure you didnt mean Chinese Central Bank Interest rates or something? LIBOR is the London InterBank Offered Rate.


yeah, mistake here, the name is SHBOR, shanghai bank interbank rates. Very tighten monetary policy now

[Hoop]

4400 being tested again. Too soon for a double bottom Hoop? Looks like it's just part of the overall decline lately rather than a seperate event...

Hmmm..maybe.... usually a correction lasts a couple of month on average..but you never know for sure as the time variation for how long a bull market correction last can be rather large... 1 month 6 months 9 months?
The view to be taken should one day at a time looking at possible scenarios both positive and negative and watching for those reversal signs..

Since its down trending and testing the 4400 (4398) again the pessimist view is.... what happens it the short/medium 4400 support breaks? Answer: no big deal.

The worry time starts if the NZX50 starts testing that Primary support at 4335 which has Secular connotations (2007 bull market top)

The correction so far is 5%... its a very small correction if it bottoms out here at 4400

[Cool Bear]

Hmmm..maybe.... usually a correction lasts a couple of month on average..but you never know for sure as the time variation for how long a bull market correction last can be rather large... 1 month 6 months 9 months?
The view to be taken should one day at a time looking at possible scenarios both positive and negative and watching for those reversal signs..

Since its down trending and testing the 4400 (4398) again the pessimist view is.... what happens it the short/medium 4400 support breaks? Answer: no big deal.

The worry time starts if the NZX50 starts testing that Primary support at 4335 which has Secular connotations (2007 bull market top)

The correction so far is 5%... its a very small correction if it bottoms out here at 4400
Hoop, thanks. Does it matters if the 4335 and 4398 are reached intraday or must they be breached only at the closing?

[bull....]

i have a consolidation completing and a break of 4380 will fall at least another 100

[bull....]

i wouldnt be surprised to see another big fall in the dow tonight or fri night , asx could hit new lows next week

[troyvdh]

Bernhard hickey now on nat radio

[000831]

NZ GDP slows down, only 0.3% for the first quarter. The expected figure is 0.6%.

[000831]

China PMI data lower than May and in some financial trouble now.

Look at Singapore, Phillipine, Thai, Korea, HK, Indonesi, horrible day, Euro and America Zone also blue

[percy]

Best ad for Newstalk ZB I reckon

Love it.!!!

[troyvdh]

Im thick what do guys mean...ZB...Hosking ..never have listened (apart from Vietch and Decker)...after I heard that tosser (Hosking) defended Hotchin and L Armstrong.

[troyvdh]

You must be young and love ads....cheers...

[Hoop]

Hoop, thanks. Does it matters if the 4335 and 4398 are reached intraday or must they be breached only at the closing?


Hi Cool Bear
If a chartist is a Dow theory purist then the lines are drawn at closing day prices.
However modern technology has given us minute 5 minutes 15 minutes hourly daily monthly pricing ..so nowadays charting has to be treated differently with the differing timeframes....Long term stuff I still use closing prices...sometimes weekly prices shows a better picture... but for medium to short term stuff I find that using candlesticks is the way to go adding logical intraday pricing and Gaps into the mix. Gaps are very powerful support and Resistance points.

I say logical intraday...sometimes you get the flash when someone "fatfingers" an order. ..Also TA doesn't work that well with illiquid stocks and intraday pricing can be bizarre for example when the sell time period arrives and you've still got say 100 shares left out of a 20000 sell order so you quit those at a much lower price as there are no buyers within coooeee of the market price just so to complete that 20000 sell order.

An interesting debate emerged among chartists in early August 2011 (I think from memory) when MR Market had a mental breakdown and a flash crash appeared the question was do we include that as a point or do we ignore it...Some said yes some said no and some sat on the fence I was a fence sitter :mellow: as I had no idea.......With hindsight it is now added.... as spooky as it seems now it formed a point on the primary uptrend line with the Xmas 2011 bottom when that bull market correction occurred....

[bull....]

[QUOTE=bull....;413064]i wouldnt be surprised to see another big fall in the dow tonight or fri night , asx could hit new lows next week[/QUOTE

yuk it was bigger than i thought

[bull....]

[QUOTE=bull....;413121]

further carnage was exoected. jyst remember the US economy is actually improving and that most gains up until now have been through easy money. the news is positive, not negative, the usa is just addicted to stimulus! stay strong and we should be in a better place next week

your right moosie lets hope it pans out alright

[Cool Bear]

Hi Cool Bear
If a chartist is a Dow theory purist then the lines are drawn at closing day prices.
However modern technology has given us minute 5 minutes 15 minutes hourly daily monthly pricing ..so nowadays charting has to be treated differently with the differing timeframes....Long term stuff I still use closing prices...sometimes weekly prices shows a better picture... but for medium to short term stuff I find that using candlesticks is the way to go adding logical intraday pricing and Gaps into the mix. Gaps are very powerful support and Resistance points.

I say logical intraday...sometimes you get the flash when someone "fatfingers" an order. ..Also TA doesn't work that well with illiquid stocks and intraday pricing can be bizarre for example when the sell time period arrives and you've still got say 100 shares left out of a 20000 sell order so you quit those at a much lower price as there are no buyers within coooeee of the market price just so to complete that 20000 sell order.

An interesting debate emerged among chartists in early August 2011 (I think from memory) when MR Market had a mental breakdown and a flash crash appeared the question was do we include that as a point or do we ignore it...Some said yes some said no and some sat on the fence I was a fence sitter :mellow: as I had no idea.......With hindsight it is now added.... as spooky as it seems now it formed a point on the primary uptrend line with the Xmas 2011 bottom when that bull market correction occurred....

Hi Hoop. Many thanks. Always learn a lot from your posts and now almost finish reading all your posts in the "Investing strategies and secular bear market". You call it correctly then.

[Mista_Trix]

On the upside there's likely to be a few good buys over the next week for anyone who has any cash ... alas I do not.

[Hoop]

On the upside there's likely to be a few good buys over the next week for anyone who has any cash ... alas I do not.
My portfolio is 85% cash and I have no intention to buy until I see buy signals...cacheee daggeees loseee fingeees

[000831]

NZX did or did not have more than 2% drop within one trading day these two years?

[Hoop]

Cheap shares??
have a look at the NZX50 Manhattan on the Chart
If the primary support 4435 fails expect the index to cuddle up to the MA200 which be as much as 8% below that support...this gives you the perspective of how far and how fast the index went up in relation with the distance apart with its MA200 line.. In my opinion the index is miles too far apart from it MA200 line...OK, there is a lag effect with the MA200 ...even so if NZX50 buys time they could meet at the 4200 halfway area still about 5% lower than now....

...Manhattan climbs can be a worry when they peter out

Hoop staying out until buy signals return
disc 85% cash

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5019062013.png (http://s458.photobucket.com/user/Hoop_1/media/NZX5019062013.png.html)

[CJ]

There is blood on the floors - even XRO is down :scared:

[MAC]

Hoop, a lot of people have much respect for your posts and your charting exp and advice on this site including myself.

There are a variety of traders and investors who use and read posts here at ST. What balancing and calming advice can you offer young or less experienced investors who are still in and who may be prone to panic sell at such a point in time ?

[Cool Bear]

TEL now showing 1 cent up. Bleeding stops?

Well done Hoop, at 85% cash. I had difficulties getting to 80%. There is always a reason to hold to this one or that.

This a good time for the brave and the intraday traders. But I am neither and will wait out the lousy weather.

[Mista_Trix]

Look at the fear! Marvellous to behold for lovers of human psychology.

Another big drop in the clown portfolio for me today. however, I'm primed to buy more of what I like. Maybe not today though....

Hard to know if you'll time it right and hit the bottom of what you want, I'm in a very similar boat, but only with the ability to buy a couple at small numbers.

[000831]

There is blood on the floors - even XRO is down :scared:

haha, I am waiting at 4000 with 100% cash for the cheap shares. :D

[000831]

Caution all, maybe this is not affecting NZX, but be very very careful about this news as the major trading country.

SHIBOR (shanghai interbank offered rate) today jumped up to 13.444% (578.40 BP), People said bank of china may trigger 40billion RMB debt default this afternoon. RBC is having a meeting now to decide whether bail out or other alternative ways to solve the problem.

Personally, I am expected China Index down more than 3% today, which may cause panic to other countries share markets.

[randoman]

Hey all,
Long time listener, first time caller!

I too find the human aspect of all this fascinating and, as always, the great zh is a fine read on those days your fingers get a bit burnt: http://www.zerohedge.com/news/2013-06-20/market-tops-form-margin.

Got myself to 30% cash today after slowly trying to rebalance this week, managed to end the week with DIL still out of whack and at almost 20% of my portfolio, I'm licking my wounds a bit!

DK

[000831]

http://www.economist.com/news/finance-and-economics/21579862-chinas-central-bank-allows-cash-crunch-worsen-shibor-shock

Moosie, r u from the future. you posted a article from tomorrow, 22th of June 2013. Could pls explain to us? :cool:

[Xerof]

PBOC injects cash, rates retreat - bloomberg

[Jay]

What is it?? that most only heard that we are easing up on the easing so to speak and not the bit about the economy is growing and that's why we are easing up
:confused:
I'm confused! must be friday

[troyvdh]

Me to Jay....for me. However my "portfolio" despite the recent days events has not lost a 'jot"...Main holdings being CEN PFI RYM MET CUE PPP...I suppose it could be said that at times I also have not enjoyed the "highs" of various companies....cheers

It is Friday....

[Hoop]

Hoop, a lot of people have much respect for your posts and your charting exp and advice on this site including myself.

There are a variety of traders and investors who use and read posts here at ST. What balancing and calming advice can you offer young or less experienced investors who are still in and who may be prone to panic sell at such a point in time ?

Hi Mac

As you are aware the NZX50 index has entered into a correction phase which we have no idea how long or how deep its going to be...

TA tries to get an "educated" guess from using past history and dealing with mathematical odds of a happening.... but sadly that won't ease your anxiety.

From history,... Corrections when they occur have a habit (signature) of a rapid fall early in the correction phase..then a recovery (pull back).. then a lesser fall to below the earlier bottom or sometimes if we are lucky, the fall isn't as severe to create another bottom...If the correction lingers on longer than "normal" the process may repeat..These repeating types are usually more nastier beasts..The 1st steep fall is usually the behavioural "Hell there's bad news everywhere I must get out now before its too late" feeling and the recovery is the entering of buyers to pick up the "cheap" shares on offer,,the next fall starts when the previous investors who wanted to sell but left it too late get a second chance to exit as well as the quick buck merchants doing their quick in and out flick and a maybe a return of the shorters influences (if there's enough doing this type of trading?)... after that, disappointment, impatience and frustration can set in as most of the lets buy "cheap " shares have already 100% bought in... and it is now " how long it will take for investors to change their attitude from negative to positive and get this bull market moving again" time.....As I said above the process may repeat ,,this can happen when another wave of bad news is given out by the media..

Corrections are a worrying time, an average 10% bull market correction sounds like nothing in hindsight, if as it says "Bull market" the price will bottom out and come right and then rally towards new highs...but experiencing a correction first hand and feeling its uncertain outcome can be traumatic for many, and the media adds to ones anxiety by its ability to suddenly switch and dredge up massive amounts of bad news

So Far the NZX50 index has fallen about 7%..so... if it going to be your average 10% correction over 3 months then the worst is over, but expect your nerves to be jangled for a while yet because perhaps this time it's different it could be a 15% or a 19.99% correction....or......remember this is an old bull (4.25yrs old) and it might've died.....But don't panic because most of the time, these drops and pullbacks makes it very difficult in an early phase of a Bear cycle to determine a cyclic reversal point...most investors would still be bullish believing the stalling rallies creating double/triple tops is still the effects from a previous bull market correction....

Its very rare to have a crash without a pull back to commence a cyclic bear market cycle.

I hope the new investors have a strategy in place when they buy their shares...experience in the market is the only way to determine ones strengths and weaknesses and how well you make the right decisions when under anxiety and stress........having dummy runs does prepare you with the theory of buy and sell and gives you knowledge of how the market works..but...only in the market can one learn how well they can cope with the stress and mental pressures the market can put pile upon you.
Only then can one apply a strategy that makes you invest efficiently and feeling the most comfortable doing it.

Google to find different successful investment strategies and apply the one that suits....

Often a new investor begins by using the buy and hold blue chip high(ish) yield long term strategy...avoiding the Taxman at the same time.....If that is your strategy then use your discipline to ignore the waxing and waning of the Market because you are applying the assumption that in 10 or 20 years time the market would be significantly higher than now.....the dividends is your reward for patience.

When the market is crappy...and you feeling likewise..remember you wont be alone

[noodles]

Hi Mac

When the market is crappy...and you feeling likewise..remember you wont be alone

Fantastic words Hoop.

However, there are those who embrace the dark side (shorting stocks) who can sleep well at night knowing gains can be made from the short portfolio while the longs are suffering a bit.

It is also a good lesson on why you should take profits when the markets have got a bit ahead of itself.

[iceman]

Thanks very much for this post Hoop. It is great reading.

[iceman]

If one goes back about a year we had the same swoon to about the 10% level Hoop mentions at about the same time. And guess what - check the news around this time and much of it is similar to now. Funny how history repeats.

BUT - the swoon was reflected in a temporary blip to 2.5% in the 10yr US treasury notes. This time is different - the trend in the notes looks pretty solid to 2.5% and looks likely to go higher and stay higher. Bond holders are taking a bath and those that must sell find buyers want a higher yield. Ouch!

And what happened after that swoon 12 months ago? Steady sailing "upwards and onwards" as Winner would say. Will this happen again? i.e. another 12 month bull run? I think not. At least not for the same stocks.

If QE is wound down - which I think it must and Fed notes suggest they think it must too - then they'll be some belt tightening as monetary liquidity is roped in gently. For many big companies who have been hoarding cash or can raise cash through corp bonds they'll steam on. But smaller companies and/or those with already stretched balance sheets will find going tough and the market will send their sp down.

The other big shock that's to come is from China and the other BRICs whose growth rates will disappoint.

In NZ, we've seen the NZD fall sharply after rising continuously for quite a while. My guess is that it will fall further which will give a few companies with significant overseas earning and little currency hedging a boost. (Most have currency hedges in place tho.) A falling NZD also makes farmers richer and they'll be paying down more debt but may invest a bit more too.

Overall - these effects will balance out NZ Inc and give a buffer to offshore shocks.

But - and here's the rub - many NZX listed companies are trading at high PE ratios. For the NZ50 to keep going higher these ratios need to be justified by growth. I.e. the growth keeps the PE ratio at the same level. This I just can't see. While the US consumer may be coming out of their caves - many of our other major trading partners are still very much in hibernation mode. And our consumers - with the exception of those buying Akl property! - ain't spending that hard. And to make it harder - the fall in the NZD hits consumers faster than those with currency hedges.

After the current swoon is over (it may be as high as 15% down) ... it'll be sideways with a slight up bias for the NZ50 and the 50 (and top 100) will be volatile - those that justify their high PEs will be okay - those that continue with the steady dividend stream on appropriate PE ratios (9-13 range) will okay - but those on high PE ratios that bring results to market that don't justify the PE ratio will be punished (and it will be these that'll be good buying when the dust settles).

discl: 15% cash - but most importantly - zero leverage

Good summary Belg and hard to disagree with.
The only thing I have a slightly different view on is that I actually think a slowdown in China to more sustainable levels is good. China can not continue to grow as it has for the last few years as it is already causing some serious issues such as congestion, pollution, housing non-affordability and much more. These are all serious issues that need to be dealt with (haven't been dealt with so far) along the way and I think that is more likely to happen properly if growth slows down to say 6-8% PA. The last thing we want is China growing unsustainably and then crashing. It would have terrible consequences.

In my industry (fishing) China's appetite for almost all our products is almost impossible to satisfy and they are buying products that to date have been regarded as offal at very reasonable prices. I am sure agriculture will be in a similar position. This will not be affected by a slight slowdown in growth. So like you, I believe Companies that pay steady dividends on reasonable PE ratios will continue to be good investments, especially exporters now with the falling NZ$. I have been accumulating SAN as one such (unloved) share !

[percy]

May I also thank "posters" for sharing their experience and thoughts with excellent posts.
I feel companies like EBO,FPH , HNZ, POT with growing earnings and prospect of higher dividends are safe havens.
Companies in the retirement sector RYM and SUM, have an ageing population, which will give them tail winds for a number of years.
TUA and AWF both have strong balance sheets and are well run.
So these companies, should there be weakness, will recover very quickly.
Others that I hold,ABA, AIA,PGW ,SKC ,SKL, SKT I don't know?My holdings in unlisted REL,PAZ and not listed Trutest will be interesting as will estaronline.com.
"Well positioned?"

[Billy Boy]

http://video.msnbc.msn.com/the-cycle/52277536#52277536
iNTERESTING .....?
BB

[noodles]

May I also thank "posters" for sharing their experience and thoughts with excellent posts.
I feel companies like EBO,FPH , HNZ, POT with growing earnings and prospect of higher dividends are safe havens.
Companies in the retirement sector RYM and SUM, have an ageing population, which will give them tail winds for a number of years.
TUA and AWF both have strong balance sheets and are well run.
So these companies, should there be weakness, will recover very quickly.
Others that I hold,ABA, AIA,PGW ,SKC ,SKL, SKT I don't know?My holdings in unlisted REL,PAZ and not listed Trutest will be interesting as will estaronline.com.
"Well positioned?"


Percy, I find that unless you have conviction in your selection, it is easy to sell when the going gets tough. Why are you holding if you don't know why?

Also, you seem well diversified. So much so, i wonder how your returns compare to the nzx 50? May as well buy the index?

Good luck

[percy]

Percy, I find that unless you have conviction in your selection, it is easy to sell when the going gets tough. Why are you holding if you don't know why?

Also, you seem well diversified. So much so, i wonder how your returns compare to the nzx 50? May as well buy the index?

Good luck

I lost my convictions and my shirt in GFC,by holding large positions in EBO[did well], while SCY halved,and PGC and NPX had to recap.
What I did learn was not to hold too few stocks. Stocks held should have strong balance sheets,and be in a position to incease dividends.
Well last year I certainly out performed the NZX 50,and I think all funds.You may have noted I came second in Aussie competition last year with 140% or more with companies I held.
My hobby is the sharemarket,so index would be no fun at all.Don't knows, may be changed to I am almost certain? SKT a week ago was a strong hold.Today SP under pressure,yet yield is over 10% and SKY will lose few subscribers,yet business model is weakened.Now a strong watch!
I also hold a wide portfolio of small cap Aussie companies.Not a lot of money in any one company, although the way some have performed they are getting sizable.

[noodles]

I lost my convictions and my shirt in GFC,by holding large positions in EBO[did well], while SCY halved,and PGC and NPX had to recap.
What I did learn was not to hold too few stocks. Stocks held should have strong balance sheets,and be in a position to incease dividends.
Well last year I certainly out performed the NZX 50,and I think all funds.You may have noted I came second in Aussie competition last year with 140% or more with companies I held.
My hobby is the sharemarket,so index would be no fun at all.Don't knows, may be changed to I am almost certain? SKT a week ago was a strong hold.Today SP under pressure,yet yield is over 10% and SKY will lose few subscribers,yet business model is weakened.Now a strong watch!
I also hold a wide portfolio of small cap Aussie companies.Not a lot of money in any one company, although the way some have performed they are getting sizable.

Arr, it appears you definitely a buy and holder. Well done on your achievements so far. I note you still have SKL. I would have sold that after the first profit warning. But i think this stock should now benefit from the drop in currency.

I think HNZ Is now the cheapest stock on the exchange. All others seem expensive (or at least not cheap) and prone to drop if there are further market corrections.

[percy]

SKL.Brought at a lot lower SP than today.The reasons I am holding are:
1/ strong board with skin in the game.
2/David Mair appears to be a fantastic CEO.
3/Paying a good dividend.
4/Very little debt.
5/Slow down with pumps and liners will recover.
6/Building a new factory.[Old one is as old as the hills].
7/New factory will have all new machinery.So I expect staff and general cost savings.
If I sold I may get my timing wrong buying back in.
HNZ.We agree.Next year's fully imputed 6cents divie is going to drive the SP.Would any funds manager hold HNZ,or would it be in any index?Not a bad hobby to have?

[noodles]

It is great having a hobby that makes you money. Hnz will be on fund managers radars soon.

[Mista_Trix]

... correct me if I'm wrong, this is more of a contemplation than a reality but it would be good to get an idea of whether this is likely from someone with experience.

Are we likely to see (or are already seeing) an exodus of international investment in equities now that our dollar is falling (cash out of high NZ dollar while it's still strong), and a buy-back when it looks to have rested at its low - using the stronger relative position of the fallen NZ dollar to reinvest in the markets??

I guess there's no real questions in here, more - is this a factor with the falling markets, and an equities revival point when the dollar stabilises at its low?

[Hoop]

Terry Hall's article (http://www.stuff.co.nz/business/money/8833115/Currency-speculators-pull-claws-out-of-kiwi)
Currency speculators pull claws out of kiwi



Remember this thought though... the TA dollar watchers began seeing this drop at the beginning of May... 8 weeks ago!!! The media is late in picking this up......cashing up Equities (property??), switching currencies so not to be exposed to the possible invisible double whammy seemed a good idea last month and makes perfect investment sense for everyone ..huh ..but the downunder currencies drop broke TA support so now the smart stay away and away we go in a currency downtrend

But hey what you don't see doesn't hurt you...right?

[000831]

An interesting day for NZX, DJI fell last night, China down 5.3% due to tighten policy.

NZX seems to have less implications by those overseas market and walking alone.

[bull....]

An interesting day for NZX, DJI fell last night, China down 5.3% due to tighten policy.

NZX seems to have less implications by those overseas market and walking alone.

nzx following asx more than any other market , but falls are not as great

[Hoop]

nzx following asx more than any other market , but falls are not as great

Yes The two indexes are back in Sync (sort of) since the reversal point and as you say Bull NZX50 falls aren't as great as the AORDs..

The gap between the two indexes are narrowing towards parity :)

http://i458.photobucket.com/albums/qq306/Hoop_1/AORDSNZX5025062013.gif (http://s458.photobucket.com/user/Hoop_1/media/AORDSNZX5025062013.gif.html)

[Hoop]

Thanks for the chart Hoop. Looks like the NZX's P/E is running a bit low as well, so surely we can't have that far to fall in the long run? Single digits seems a bit extreme for one of the most solid countries of GDP growth at the moment...

Not extreme at all Moosie

This present scenario is the ideal time for a drop in the PE Ratio.... a PE under 10 (remember we are speaking CAPE) is more likely with economic growth than with stagnant growth.. P is forward looking and E is at last reporting.

P is in a downtrend as investors fret over Global events and lose focus on local events.
E is going up due to favourable NZ business/economy cycle.
Sellers outnumber Bargain Hunters
Available money diminishing....Money exiting NZ (NZ is not considered a safe Haven)
Smart money sidelined awaiting recovery

[biker]

Yep, there might be a bull trap coming........or not. I guess they have a 50% chance of being right.

[Hoop]

Hmmmmm, truly. Still watching the 4,300 level with bated breath.

Read an interesting article on Elliot Wave Theory regarding most major markets last night. Appears the FTSE and DAX are in the worst shape of all and have bigger falls to come. Said there might be a bull trap coming up whereby dip-buyers buy in but can't get out as the trap is too fast and closes too soon to let them exit their positions with a profit, so they just hold. Sinc eour markets are mirroring foreign ones at the moment, what are your thoughts?

EW theory is something I can't grasp...I can see the waves in hindsight ..sometimes ...:)...it just gets too complicated.....sub waves and sub sub waves...meh!!.. ..all you need is sub wave to be misinterpreted and the thing is wrong ..Pure EW like most other predictions into the future fails to produce significant < 85% results...so I leave this discipline to the EW followers. The guru in this area is Robert Prechter and if you followed his advice via his newsletters over the years you wouldn't have much money left to invest. Phaedrus did an analysis of Prechters results ..its somewhere on ST.

EW is an discipline involving investor social behaviour ...Analysing Investor behaviour is my discipline area also, but the closest to EW I get is the boundary touching points within a pattern and also if I need extra confirmation on Support and resistance lines I may use the Fibonacci Retacement...I unlike the EW purists don't rely on one single discipline I use a few disciplines and use them to confirm each other...the same idea as using more than TA indicator to confirm a result...the lining up of the ducks effect:)

Moosie if you really want to go down the EW track and learn and discuss about it... PM Dumbass he is the expert in this field on ST.

My thoughts on the Market.......Most Market Indexes are broken (TA-wise) at the moment so common sense says keep out... Phaedrus MSI indicator is the best tool to indicate that broken concept.. I'm guessing the MSI is red for most global indexes...see Trackers he has Phaedrus's MSI formulae you will need Metastock software and history data to run it.

Where to from here?............for the NZX50 watch that 4335 support line.... This line orginates from the overheated 2007 market double (5) tops so it has secular meaning and could be of major importance..if the 4335 breaks the bull get sick but its not the end of the bull... The bull often dances with the MA200 line and rallys off it.. Atm the MA200 is at 4200 and rising....However dropping down below MA200 with a bit distance south of the MA200 is showing a bear trait and perhaps a dead bull.


Yep, there might be a bull trap coming........or not. I guess they have a 50% chance of being right.

Sub waves (not the EW kind) are corrections within a correction ....lower highs and lower lows

You always get at least correction (rally) within a correction...these rallies top out around an old support now resistance point
It usually caused by bargain hunters out numbering the sellers.
If the bargain hunters are of "the top up of my investments" type then this type of rally becomes unsustainable when the hunters are satisfied and become 100% "in"

[000831]

China down 3.8% so far, another country crash after Japan.

[gv1]

China down 3.8% so far, another country crash after Japan.
I see as a correction rather than a crash.

If you invest in a company you think are doing well, then why should you worry?
This is the biggest mistake people make, sell up at a huge loss and say its a market crash. That's when big boys make money from little guys.
If its a good, reputable co and you haven't borrrowed money to buy shares(you should never borrow to fund shares), don't sell them.

[troyvdh]

dear gv...never a truer (?) word said....as I have said in the past some folks investment horizon is quite frankly a reflection of how many folk view success....a quick buck made ..an enormous feeling of self satisfaction whilst living in their 300 square meter mansion thinking that they "have finally arrived"....I could go on ....cheers

[Lease]

Meh. The 4% dip has been clawed back.

http://www.bloomberg.com/quote/SHCOMP:IND

Hope you didn't sell into the panic 000831

I don't think 000831 would sell anything but buy. As far as I know, he is a sophisticated share market player.

[Hoop]

I see as a correction rather than a crash.

If you invest in a company you think are doing well, then why should you worry?
This is the biggest mistake people make, sell up at a huge loss and say its a market crash. That's when big boys make money from little guys.
If its a good, reputable co and you haven't borrowed money to buy shares(you should never borrow to fund shares), don't sell them.

Might look good from a NZ market perspective as we have had a 4.25 years of good times (bull market cycle) ...but the poor buggers over in China have endured a 3 year bear market cycle (twice as long as the average bear) and seeing their index drop from 3550 to 1950..Remember it reached 6000 in Mid 2007...The Shanghai bear supposedly died around Xmas 2012....things were on the mend up until the last week of May and in the next 3 weeks the index has dropped 15% testing the 1950 bear cycle lows again....if it drops some more in the next week or two it will be deemed a crash and a destructive crash it will be as market had an increasing accumulation trend up until 3 week ago....also if it drops any more the 6 month old Bull will have prematurely died and the market will be back enduring the lower highs and lower lows bear market cycle....Soul destroying stuff

Put NZX50 into Shanghai perspective the NZX50 index would be 2600 not the present 4400. Think the price of your favourite share (what you bought it for?) then divide it by 2 and imagine it going down in the past 4 years to this price with no end to future drops in sight...much higher dividend yield now?..yeah for the investors who got out and buying back in now ...the "buy and hold" investors dividend yield stays the same as you paid for the share.

[MAC]

Seems Chinese regulators are willing to step in and avoid large defaults by local governments.

European markets just jumped on the news. Should motivate both the S&P500 and NZ50 to bounce from where they are at also, both sitting smack on 2007 support levels.

Let’s hope for a bit of relief in the market tomorrow, possibly some signs of the correction bottoming also ?.

[Hoop]

Attack of the Panda!

Wonderful wonderful human psychology at work..........

Chinese Torture???

[000831]

Meh. The 4% dip has been clawed back.

http://www.bloomberg.com/quote/SHCOMP:IND

Hope you didn't sell into the panic 000831

Did not sell and did not buy, just watching and walked away. Have been traded since I was 16 in China. Luckly enough to experience two big cycles and major crashes, 2001 and 2007. Seen this kind of scene often.

China may suffer mainly from the property side, rather than share market. Currently it has cash crunch issue, bond and share funds all trying to cash out then caused bond and share markets crash.

The next half year is really a chanllenge for Chinese property market, hope not like 2007 USA property market......bury in mind.

[000831]

Maybe, but the guy calls a share market crash every other week.


yeah, since 24th of May. I am just saying Asian area may have financial crisis, like 1997. The sharemarket first, then property market, then currency..............

[gv1]

dear gv...never a truer (?) word said....as I have said in the past some folks investment horizon is quite frankly a reflection of how many folk view success....a quick buck made ..an enormous feeling of self satisfaction whilst living in their 300 square meter mansion thinking that they "have finally arrived"....I could go on ....cheers

sorry missed it?

[gv1]

Might look good from a NZ market perspective as we have had a 4.25 years of good times (bull market cycle) ...but the poor buggers over in China have endured a 3 year bear ...market dividend yield stays the same as you paid for the share.
That's why Wbuffet is what he is .. and the rest just a Jo bloke.

[gv1]

Attack of the Panda!

Wonderful wonderful human psychology at work.

GV1 - I have to smile at your suggestion people don't borrow to fund shares. I think that's 95% correct. Too many people borrow at the high end of the market, rather than use debt judiciously when things are very cheap. I have only used debt very sparingly, did very well with it buying a bit more Ryman and Diligent. Paid everything back in March April this year when I felt some irrational behaviour coming into play.

I wonder how Chinese panic will affect Europe, USA and Australasia tomorrow. Will be fascinating to watch.

Yeah, Hi Sparky.
I guess it is and it is not psychology at work . Its all about good investment decisions. Iam a full-time trader, still learning and I refuse to borrow money to fund shares until I have learnt my game.
Whole life is a game..how you play is important.

[Mista_Trix]

Yeah, Hi Sparky.
I guess it is and it is not psychology at work . Its all about good investment decisions. Iam a full-time trader, still learning and I refuse to borrow money to fund shares until I have learnt my game.
Whole life is a game..how you play is important.

Full-time trader as in a stay at home in and out of the market all day? Or a, hold a job but have a screen open and multi-task all day?

... Respect either way :)

[gv1]

Full-time trader as in a stay at home in and out of the market all day? Or a, hold a job but have a screen open and multi-task all day?

... Respect either way :)
Hi Mista trix
Yeah bit of everything. I can't do any 8-5 job,because of my personal situation. I did in and out of market daily few years ago but have stopped beacause I now see as investing in good growth etc companies is better than the stress of doing it daily in case if you can not be at computer/internet for some reason, loss can be huge. Hope this helps and all the best in investing.

[Mista_Trix]

Hi Mista trix
Yeah bit of everything. I can't do any 8-5 job,because of my personal situation. I did in and out of market daily few years ago but have stopped beacause I now see as investing in good growth etc companies is better than the stress of doing it daily in case if you can not be at computer/internet for some reason, loss can be huge. Hope this helps and all the best in investing.

It makes me wonder as well what the research would say balancing - the potential financial gains made from intraday trading, vs, the likely long term health problems (heart, blood pressure) from the stress, versus holding value companies and having better health... a little tongue in cheek, but also a little seriously.

I don't know how any of the intraday guys do it - too much stress for me :-S

Anyways, well off topic. A much better looking market today.

[Hoop]

quote Post #856 27th May (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News!/page58)..........So what will happen?
We can't predict the future so we take one day at a time and one step at a time.......First step is watch the MA50 and the 4400 area and see where that leads us to...

.................................................. .................................................. .................................................. ......................................
6th June Post #909 (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News%21/page61) ....MA50 broken ...NZX50 has entered into the 4400 area

.................................................. .................................................. .................................................. ......................................

Quote 12 June Post #952 (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News!/page64)......Technicals still not great...The failed rally is a pull back (see Bulkowski's website here (http://www.thepatternsite.com/pullbacks.html)) and has made life a little more pessimistic.
Of interest is the previous post re: secular bear cycles...they are usually seen as a very large trading range pattern ...notice the secular break on the chart...we are at the top of that long term trading pattern again ..so another bearish sign for the NZSE.

Update
Since that post 2 weeks ago this correction has intensified The 4400 TA Target has been overtaken and now the next supports come into play. The primary support involving the previous Bull market top back in 2007 is in play...its a positive seeing the NZX50 jumping back above this primary support.... This primary support has secular meaning (a classic signature of a secular Bear market cycle [not always but most of the time] is its flat top pattern) If this classic signature pattern holds true this time then we are witnessing a cyclic reversal and the death of the 4.25 year old Bull.
Its still early days ..so best to keep this possible cyclic reversal as a cautionary thought until there's further evidence to confirm (buy signals) ......It may take weeks as cyclic reversals to Bear market (phase 1) are very hard to spot in their infancy.

Where to from here ...take it day by day...We are more likely witnessing a relief rally which could peter out at a resistance point watch these areas:
....the 4400 medium term resistance line
....The MA100 resistance line
....the 4475 short term resistance line
Each resistance hurdle the index breaks above strengthens the chance that the bull is still alive.

It would be premature to assume the correction is over, it is only 6 weeks old, the average investor should wait for confirmation..if you are a short term investor you will already be "in" today and be riding out this upward bounce.

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5026062013.gif (http://s458.photobucket.com/user/Hoop_1/media/NZX5026062013.gif.html)

[Mista_Trix]

What websites do you all read to keep on top of the NZX, both in terms of factual reporting and opinion/analysis pieces??

I've been put off Stuff (tabloid), Herald (inaccurate or fact light speculative reporting - MFT yesterday) and NBR is good but the locked content can be a pain.

What else is in the mix for you all?

[Toulouse - Luzern]

Looking good.

[Hoop]

Looking good.

4405 up 12 (+0.3%) as I type.
Intra high (4017) tested the MA100 but failed on its first attempt.
Maybe better luck with the lunchtime crowd

[Hoop]

4405 up 12 (+0.3%) as I type.
Intra high (4017) tested the MA100 but failed on its first attempt.
Maybe better luck with the lunchtime crowd

Lunchtime bargain hunters came to the party MA100 broken ,,,4421

Hmmm....profit takers getting tempted yet

[percy]

Lunchtime bargain hunters came to the party MA100 broken ,,,4421

Hmmm....profit takers getting tempted yet

Yes,sold my SKT this morning.Only share I was uncertain about.Looks as though their "moat" has lost it's water and been filled in.!

[CJ]

Apparently bad news is still good news. US GDP guesstimate growth forecast cut to 1.8% from 2.5%, which would leave QE still in place. Unemployment still 1% above the accepted rate for QE to end. Two more Fed Managers say QE should stay. China also raising liquidity to get through the tough times. Markets up due to this new shot of drugs. Looks like Bernanke spoke too soon on this one...Ironic that the markets prefer QE to actual growth. The worlds gone mad.

[Xerof]

I'll surmise they have bought the rest back in June too.

[gv1]

Should be a good day today: US markets up, not off the back of extended QE talk, but actual positve economic data ;) Upbeat economic data out of Japan (http://www.marketwatch.com/story/japans-top-firms-show-improved-sentiment-tankan-2013-06-30), Europe (http://www.marketwatch.com/story/europe-stocks-flat-hm-siemens-up-volvo-off-2013-07-01) and good Manufacturing data out of the US (http://www.marketwatch.com/story/us-stocks-rebound-on-manufacturing-bright-spots-2013-07-01).
Big news will be the US jobs numbers out at the end of the week.

Well, I thought we had a crash......?

[gv1]

Sorry mate, not following you??

Good to C that we all are in the same page and not bringing negative vibes. Calling the market in C when the market have a long way to go.

[gv1]

LOL :lol:

WE ALL READY WENT OVER THIS!
I know, was just checking.....

[Hoop]

4440 being tested again today. We move above this and we have a major support line again. :)

Buyer strength has pushed the index breaking above the conjunction area containing the 4400 resistance line, the new downtrend line and the MA100 line This is a very bullish outcome and yes Moosie the 4400 support here will be a major....

The rally is now entering into the previous fail zone at 4475...This is the bull/bear test, if it fails again it suggests a lower high and lower low..and may resume the down trend line

If the NZX50 breaks upwards though the 4475 line some TA indicators may start firing buy signals and I may test the market with a slight buy in....however there is still work to do as there is a shallow downtrend line together with the MA50 around the 4515 area ...even at those 4515 levels it still looks grim for the old ailing Bull.

Not until the index reaches a new high (4680) and over 4700 removing the spectre of a bearish double top and a bearish inverted Head and Shoulder Pattern will the old cyclic bull regain full health

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5002072013.gif (http://s458.photobucket.com/user/Hoop_1/media/NZX5002072013.gif.html)

[Hoop]

the trend line is looking weak now. if fbu and cnu can keep up the rally while tel and mrp stay flat (let's admit it, they're getting doggish!) then I don't see why we can't retest 4515 and break upwards. the usa and eurozone have both turned out good numbers and china is off the burner (for now). don't see why we can't retest the old highs and try for another leg...
Yeah...I decided a while ago that FBU would mostly likely lead the Index out of the correction, but the question was and still is..Can FBU rally up past 9.60, its a tall order..eh?...

It is nice to see both FBU + CNU rallies are leading the way though at this early point in time..FBU is at last showing some buy signals....This rally has to continue though as both are still in their down trend channels...and that's a bearish factor.

Also...is there enough available money around to keep up this buyer momentum with other stocks as well?....remember a lot of money has gone home to safer havens..Maybe watching to see if the NZ$ rises again would be an indicator of fresh money returning...this would help sustain this present buyer momentum and keep the rally intact.

If we were to see the NZ$ continuing to tank, this would be a negative for the Equity Market methinks

[MAC]

The NZD is still well above the long term average and on a downward trend with commodities. There doesn’t seem to be much sentiment in the near term for USD inflows.

http://www.fxempire.com/technical/technical-analysis-reports/nzdusd-forecast-july-2-2013-technical-analysis/

[Hoop]

The NZD is still well above the long term average and on a downward trend with commodities. There doesn’t seem to be much sentiment in the near term for USD inflows.

http://www.fxempire.com/technical/technical-analysis-reports/nzdusd-forecast-july-2-2013-technical-analysis/

Their quote seems rather dramatic..eh?.. "We expect the Kiwi dollar to get absolutely pummeled sooner or later, and are being patient and waiting our turn to start selling"...

OK..then....... as the NZ$ is doing its long term cyclic strengthening back towards near parity with the AUS$ (see chart below)..... if we are to believe in the "forecast" from fxempire.. that would imply the Ozzie $ is in worse crap...eh?

http://i458.photobucket.com/albums/qq306/Hoop_1/AUSvNZDollar33yearchart.png (http://s458.photobucket.com/user/Hoop_1/media/AUSvNZDollar33yearchart.png.html)

[MAC]

That correlation between S&P500 and NZD has always interested me too. Bit of a divergence forming at present, haven’t decided yet what it means ?

4628

[MAC]

Fairfax are certainly having a positive morning:

http://www.stuff.co.nz/business/opinion-analysis/8871769/Kiwis-calm-as-market-recovers

[CJ]

Way more jobs added than expected: 195,000So is that a good or a bad thing - I can't figure out this end of QE thing.

Markets seem to like it - up over 0.8% so far or did something else cause it to rise?

[Hoop]

Economic growth is a long term (not short/medium term) driver to the business cycle which is a driver of (E) with in the Equity market...therefore the cyclic equity market and the economic cycle are not statistically correlated.

On a day to day basis...the main driver on the sharemarket is media noise and the longer term result of this negligible, therefore noise is not a trend maker,,references to the economy is an often mentioned noise

On a cyclical and long term basis the primary driver of the sharemarket is the annualised PE Ratio..it is a trend maker.

The primary driver of the PE Ratio is inflation.
There's a relationship between inflation and interest rates.

The rest are non correlated effects........so to a learning novice is best to ignore those more complex but lesser effects until their understandings of basic sharemarket mechanics is bedded into their "mentals"

Evidence atm is the high value of the S&P 500 and its annualised PE Ratio of over 22 which is well above the average of 15/16.......Does that indicate the SP500 is 50% overvalued? The noise makers devoid in the knowledge of Sharemarket Theory will be screaming "crash" "...the market is grossly over valued"......In a year's time the market may crash and they will be patting themselves on the back and be made a media guru ..but that possible market crash would be due to vastly different reasons that what what these "so-called experts" were thinking of at the time.....

Why??.... because Sharemarket theory..says NO!! it is not overvalued, it is fairly valued because the SP500 is operating in a very low inflation/interest rate environment and sharemarkets operating at Annualised PE Ratio between 20 -25 is a fair value norm within a very low inflation/interest rate environment.

Two factors to think about now
.....Expect annualised PE Ratios to fall naturally and bottom out at below 10 during a secular bear market cycle (the present secular bear is 13 years old, extremely healthy and only middle aged)
.....Expect annualised PE Ratios to fall (from 20-25) "naturally" to its fair value during either increasing an inflationary or deflationary environment

Increased population with jobs increases creates available (consumer) money..this puts pressure on price and demand ...increased available money increases demand...demand outstrips supply causes prices to rise....this results in inflationary pressures which triggers a monetary upward interest rate response...also rates + its inflation partner puts negative pressure on the bull business cycle.
Inflationary pressures results in a lowering PE thereby unless there is a counteracting earnings growth uptrend (bull business cycle not economic cycle) the share index will fall..... Now you will be able to see the relationship with the Business cycle and how difficult this upward E scenario could be when under an inflationary environment.

To the layman with very limited Sharemarket Theory knowledge it seems like a giant paradox when seeing the QE in progress (or any other type of recessionary monetary easing)..it seems incomprehensible to them that an economy in the poop needing large amounts of injected (printed) money to survive can have such a booming sharemarket (often the bull business cycle is never mentioned)...this lack of knowledge is borne out in the media by their quotes such as irrational markets..manipulated markets etc...unfortunately many investors use the media as their teachers and logically apply this "pseudo-knowledge" to produce false logic...False logic looks very convincing and stands up to applied theory scrutiny.....but it eventually proves itself wrong often with damaging results.... sad really..eh.

Printed money is highly inflationary, so when this type of easing is applied to such an extent as it has been during this 2008=201??? period, this resulting lack of inflation and continued ultra-low interest rates (0 -0.25%) gives you the idea of just how serious the 2007 GFC and the present Eurocrisis and its invisible deflationary after effects are....

Ultra low inflation/interest rates environment supports higher than normal annualised PE Ratios and that has been seen over the last few years as the QE has been in operation.

so..............a reduction in QE will happen when inflationary pressures appear and the easing will be assumed as an orderly slowly ending event as the economy slowly comes right.......this easing ending is only a negative pressure to the Equity Market if inflation is "perceived or actually seen" ... It also puts pressure on the business cycle to perform even better than it has done, which in the USA has been stellar and has now reached the point that the continued trend rate is unsustainable...this implies that the bull business cycle has topped out and the E in PE is under pressure to keep its record increasing rate increasing to prevent the P from falling.

Employment numbers are trending up in the USA as the bull economical cycle gathers pace.

A point to remember
Equity Cycles, Business Cycles, Economic Cycles, have their own wavelengths.

Hope this confusing post helps someone out there :)

[Hoop]

Hi Turmeric
yeah sorry my post was written off the top of my head and I was hurrying it as I had to go out...
I'll keep it brief :D and red ink it in your quote as I'm at risk of being completely off topic (already did that today on the Telecom thread and got justifiably pinged for it)


Hi Hoop,

Interesting thoughts. Just wondering if you could elaborate on your definitions of "business cycles" vs "economic cycles" and when you start talking about "bull business cycles" if that is a different thing all together? I'm having a little trouble following some of your post.

Traditional economics would define "business cycle" as something along the lines of the long term fluctuations of the economy - the typical sine curve, peaks and troughs where the duration of a single cycle is several years. "Economic cycle" is typically not used in economics, but if it were to be used I suspect it would be interchangeable with business cycle.Yep agree.. except and I'm probably wrong due to memory fade over the years but I thought the business cycle was the wave that always tilted upwards as expansions are longer periods than contractions within the economic framework diagram..(if the economic framework diagram was viewed as a cycle not a framework diagram it would be upward tilting as well)... I regard an economic full cycle as a 3D perception of one period from expansion to contraction back to the next expansion the same as traditionally viewed 2D framework diagram.. my "bull" mention is probably not the correct term either but I think the meaning is clear as I meant it to be the upward part of the tilted wave...so in effect the difference from textbook theory is the top of the business wave in a imperfect world doesn't always have to mach up with the top of the economic expansion period. Economists have their own view on things correct me if I'm wrong as I think the Economists view EPS growth as the same as GDP which is probably again textbook theory but in reality ESP although it closely trends with GDP over the longer term its more volatile and has short term fluctuations during boom times and times of depressions and the 2007 great recession....Lately the USA EPS has been very volatile within the USA GDP trend...suggesting the business cycle is out of sync, even though both are fundamentally linked and revolve around each other..This brings up the view in Sharemarket Research that the Nominal GDP is driven by the Economic cycle and the EPS growth is driven by the Business Cycle,,,even though both cycles are fundamentally very closely linked....This latest period is a good example with Country debt problems (a part of GDP) dampering down the economic growth rate*** and US businesses which have been showing record EPS pushing up the economic growth rate.
*** See Ref This Time Is Different by Kenneth Rogoff & Carmen Reinhart...(yes I know about the spreadsheet error)

Also from a non-TA perspective, I would disagree (partly in hope) that QE won't end when inflationary pressures start to appear, rather the Fed will maintain credibility and start pulling back QE once the the employment market is in check. Yes a gradual easing depending on the economy is the textbook theory. There is a feeling within some circles that this extreme unprecedented type of easing has a risk of creating sudden uncontrolled inflation...akin to pouring petrol as a last resort onto ashes of an old fire to make it burn again when all other lesser flammables have failed to relight it. This is partly why I pay close attention to jobs numbers coming out of the US. I agree with you that noise and signal need to be distinguished, but to identify a signal you MUST recognise all relevant data. In that same vien what interests me is not so much day to day reactions of equity markets to relevant economic news but what the long term trend will be to improved economic conditions vs. QE ending. Recognising we are in an unprecedented economic environment yes agree hence the uncertainties, identifying how addicted markets are to QE could be the key to knowing if and when to exit equities and hold more cash. There's a debate at the moment whether QE itself is a cause or whether the investors behavioural perception of QE is the cause...the answer is simply answered in Sharemarket theory the low inflationary environment is the causative...Inflation is the driver of PE Ratio which drives the sharemarket...simple really...huh...as I said in my previous post its best to ignore those more complex but lesser effects..otherwise you "cant see the forest for the trees"

Last night in my opinion was a very good sign. Hmmm ...as mentioned above, it all depends on inflation

Hoop have you read The Signal and the Noise? No, but I'm interested.. I'll google it and ..ahem.. I suspect you would find it very interesting. Silver is one of the leaders in this literature and his book is a very good read. I'm actually about to go out and buy it to re-read again as one chapter of my thesis is about identifying signal from noise in some health data in NZ. cheers Hoop

[MAC]

...Inflation is the driver of PE Ratio which drives the sharemarket...

Hoop, inflation has been as high as 6% in 2011 without catastrophic effect and is presently well below these levels, and, interest rates are anticipated to remain at current levels, probably into next year.

Are you suggesting that the NZ50 bull cycle has a long way yet to run ?

4631

[Lease]

Entirely agree with Hoop, but can be put a much simple way of your point: investors seek return in market. The benchmark of return is interest rate. If interest rate is 5%, the overall share market PE can be 20. If interest rate is 6%, the share market PE can be 16.67. At moment, interest rate is only around 2%, thus sharemarket can be tolerant much higher PE ratio.

[Hoop]

Hoop, inflation has been as high as 6% in 2011 without catastrophic effect and is presently well below these levels, and, interest rates are anticipated to remain at current levels, probably into next year.

Are you suggesting that the NZ50 bull cycle has a long way yet to run ?

.....

Apologies with the diagrams they are nowhere near accurate nor long enough period nor a suitable reference for an academic discussion ..The most serious flaw one is the Forward PE chart it should be CAPE....However they are good enough to offer a blurred reference with this diccussion

NZ Share market info is hard to find in NZ ...also limited history.. NZX50 only goes back 10 years...need at least 50 to 100 years data for secular research.
Also Note : inflation and interest rates often ride together (correlate) however they can differ...therefore inflation is a primary driver ...interest rates is not!!! My reference below may be seen as interest rates having a major effect but to indicate that this being the case would be wrong
.................................................. .................................................. .................................................. .................................................. ................................................
My previous posts have been referencing the S&P 500... having a high CAPE value of 22 something in the middle of its secular bear cycle and being well above its average PE of 15/16 but still classed as a fairly valued index (on the high side though) because of its low inflationary environment....

NZX50...The CAPE (annualised PE) as at 31 May 2013 was a low 13.3 The Average long term PE Ratio is approx 13.75 and is also operating in a low inflationary environment period....

Comparing these two indexes... one could say the NZX50 is well undervalued and could lift up another 70% and still look fairly valued...eh?

Am I suggesting that the NZ50 bull cycle has a long way yet to run?......Sadly as the variables stand atm, its a theoretical No.....for the deniers and optimists lets say in practice anything can happen and occasionally does... as variables do what they do...they are always changing!

How can I say No???

1...NZX index compared with SP500 works off a lower or Compressed PE Ratio range due to NZ's past history of having a lower average rate of economic growth than USA...Its difficult to assess what 1% growth rate change has on the overall CAPE in differing Countries but recent research seems to suggest large CAPE figures get compressed more than lower CAPE figures with approx 5 difference on long term average PE....This would provide one reason why the NZX50 average is 13.75 and SP500 is 15/16.

There is a debate going on about the "New Normal" and it's Equity secular effects on Wall St suggesting the growth average of 3% in USA will be only 2% for at least the next decade or two...see Ed Easterling's Probable Outcomes (http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2011/03/14/game-changer.aspx)...

2...Distance travelled in the latest Secular Bear Cycle (SBC)...Its was a chance happening that both markets entered the SBC at the same time (year2000) The SP500 entrance came with a much higher CAPE 48 verses NZ unknown as the NZX50 didn't exist then but lets assume 20 for this discussion (using Ed Easterlings Compression PE theory at 1% economic growth rate difference it would be equivalent to about 30 on the SP500)...so NZX50 was not as overvalued as the SP500 back in year 2000...In theory CAPE steadily falls from its maximum and bottoms out at under 10 in a Secular Bull Cycle.....
SBC can be interupted but not stopped as seem by the present Low inflation periods pushing the CAPE up against the Secular Bear trend and if this period is artificially sustained over a few years (e.g QE) it can be strong enough to put the Secular Bear into hibernation thus postponing the PE ratio (CAPE) fall..Theoritically the Secular bear must follow its destiny through to its end and travel to below CAPE10.... Time taken is not a factor...distance travelled is ....
This brings up the "Paradox illusion" ..a manipulated (Monetary easing) low inflationary environment puts the equity market into a cyclic bull market cycle...but long term prolongs and extends the life the secular bear's cycle.

On the NZX50 it is the same theory..the SBC is still governed by the distance traveled factor ..with lesser degree of easing the CAPE although pushed up (by about 2 CAPE to 13.3) it has not been enough of an upward trend to put the SBC into hibernation and evidence has been seen lately of the CAPE trending down again.....CAPE trending down does not alway suggest a falling index....In NZ atm the E in PE Ratio is growing faster than the rising P causing the PE Ratio to fall....

How much easing effect has this 2009 to 2013 period have on the SBC and NZX50 index prices??......using an unscientific "glance at the chart" stance That area within the black ring seems to be lifted by about 2 CAPE ......so if one assumed this global crisis didn't happen and the easing didn't happen ..the underlying inflation could have been at 3% thereby keeping the interest rates up to 6% (Monetary policy) that 2%CAPE effect disappears so 13.3 becomes about 11.3.....and the NZX50 index = 3800 ,,every dark cloud has a silver lining ...huh??

Now, back to reality.. the GFC ever happened and that 3800 index never happened....however what did happen was the SBC distance got delayed so investors should not presume that an new uptrend from here on is the "Norm"..its not....when the lower NZ$ and increasing economic growth pressures inflationary factors the SBC behaviour will come back to life and will reassume its CAPE down trend.

3...A fact...the shorter term Cyclic bull and Cyclic Bear Cycles operate alternately within the longer term SBC.....The present Cyclic cycle is a Bull Cycle. The Bulls (both SP500 and NZX50) are 4.25 years old and now considered "old" ...Bulls can live years beyond there 3.75 year expected lifespan but now you're gambling with odds as to how old these bulls will be when they die.

http://i458.photobucket.com/albums/qq306/Hoop_1/PERatioforwardNZX50inflation90dayrates13yearChart. gif (http://s458.photobucket.com/user/Hoop_1/media/PERatioforwardNZX50inflation90dayrates13yearChart. gif.html)

[CJ]

I received an email saying that the annual government contribution to my Kiwisaver has gone into my account. Surely this must provide a short term boost to the NZX as ~20% of those funds (not just mine but every kiwisaver members) needs to find its way into the NZX.

Has any looked into this to see if there is a small boost during July/August each year since Kiwisaver was introduced?

[Slowlearna]

20% of my kiwi saver goes to Australasian shares. I'm not sure how other providers are set up?

[Banksie]

You would think so aye! How many poeple are in Kiwi saver?
To give a rough idea if 1 million people are receiving the full govt contribution then that would be roughly $100m going into the NZX

The KiwiSaver stats are available here http://www.kiwisaver.govt.nz/statistics/ks-monthly-statistics-2012-2013.html.

The total number of members for May 2013 is 2.1m.
The max government contribution is $521.43.
During the 2012-13 financial year tax credits amounted to $454m.

(these figures are based on the May 2013 stats, the latest available).

[CJ]

You would think so aye! How many poeple are in Kiwi saver?
To give a rough idea if 1 million people are receiving the full govt contribution then that would be roughly $100m going into the NZX


20% of my kiwi saver goes to Australasian shares. I'm not sure how other providers are set up?

2m Kiwisavers - lets say 50% get the full amount of $500 so that is $500m going into the funds. Let say between 10% and 20% goes into NZ market thats only 50 - 100m so not as big as I though.

[sideburns66]

Apologies in advance for double posting this question but thought I might get better response here. I'm wondering what peoples favourite NZX listed companies with significant USD exposure?

I see a pretty strong tail wind for these companies as QE starts to wind down so looking to rebalance my portfolio towards them.

Cheers

Hello all, long time watcher first time poster, baby investor. :)

I would say FPH could be a good bet, although have experienced a ~40% gain in SP in recent months, a lot of which can probably attributed to NZD dipping against the USD. It's widely known that they have good hedging, etc. in place.

However, a good solid company producing very high quality, sought after products and a good history of increasing profits / revenue.

Probably more a long term hold.

DISC: Holding a small amount of FPH.

[CJ]

Apologies in advance for double posting this question but thought I might get better response here. I'm wondering what peoples favourite NZX listed companies with significant USD exposure?FPH has already felt the benefit.
DIL should also be benefiting but dont see any evidence.
XRO currently has minimal USD income but if you are a beleiver at their current price, then alot of its future income will be USD.
RAK - haha
MAD - haha
Thinking a bit out of the box, the tourism shares like AIA and SKC may also benefit from a lower NZD due to higher tourism?

A bit depression looking at the list to see how few NZ shares are export focused.

[sideburns66]

FPH has already felt the benefit.

You're probably right there. But still a good solid company.

Another one to think about could be TEN?

[CJ]

Mad just posted a positive quarter. Based on a forex gain. Didn't sound like it was a recurring forex gain from the press release.

Given its a small company with a hammered shareprice, you could be right that it gives a good upswing should it get is act together.

[Snow Leopard]

...Sorry - table is much easier to read before I post it, can anyone help with formatting for future reference? Cheers.

In the advanced editor you could:

Use the Code tags:



Code 1m 3m 6m 1yr 2yrs 5yrs
S&P500 GSPC 0% 5% 12% 15% 22% 33%
NZX NZ50 0% 2% 8% 10% 30% 44%


Use a table (grid lines not essential):



Code
1m
3m
6m
1y
2yrs
5yrs


S&P500 GSPC
0%
5%
12%
15%
22%
33%


NZX NZ50
0%
2%
8%
10%
30%
44%



















Best Wishes
Paper Tiger

[Sideshow Bob]

FPH has already felt the benefit.
DIL should also be benefiting but dont see any evidence.
XRO currently has minimal USD income but if you are a beleiver at their current price, then alot of its future income will be USD.
RAK - haha
MAD - haha
Thinking a bit out of the box, the tourism shares like AIA and SKC may also benefit from a lower NZD due to higher tourism?

A bit depression looking at the list to see how few NZ shares are export focused.

PEB once they get rolling......

[iceman]

Apologies in advance for double posting this question but thought I might get better response here. I'm wondering what peoples favourite NZX listed companies with significant USD exposure?

I see a pretty strong tail wind for these companies as QE starts to wind down so looking to rebalance my portfolio towards them.

Cheers

SAN is on record saying each 1c change in the NZD/USD exchange rates alters bottom line by about NZ$ 1M. They will benefit by a lower NZ$

[MAC]

So, ….., before the taper tantrum it seems the world expected QE to end in mid 2014, and now the tantrum is over, ...., it seems the world expects QE to end in mid 2014.

Oh well at least the traders got the volatility and the correction they wanted.

4642

[Mista_Trix]

All eyes on the Fed ...

[winner69]

All eyes on the Fed ...

Lets hope the big con lasts for a few more months ....or years even

But that will only make it more painful later on

[Mista_Trix]

We live to fight another day

[False Profit]

Conspiracy theories aside we all know that there's plentiful stocks of gold, diamonds, oil etc in the World. I want a diamond ring so I go to a jewellers - guaranteed they'll have gazillions in stock. I want a pint of milk and go to the dairy - sold out.... you do the math.

"The Man" is pulling the wool over our eyes people!!!

[CJ]

Conspiracy theories aside we all know that there's plentiful stocks of gold, diamonds, oil etc in the World. I want a diamond ring so I go to a jewellers - guaranteed they'll have gazillions in stock. I want a pint of milk and go to the dairy - sold out.... you do the math.

"The Man" is pulling the wool over our eyes people!!!Just adding to this, go to china, Africa or India and ask 95% of the population if they would prefer $10 of food or $10 of gold/diamonds.

[Slowlearna]

I'd say food

[Hoop]

NZX50 has outperformed the S&P500 in the last decade...and both seem to follow a similar trend...
Another plus for the NZX50 is the NZ$/US$ exchange rate ....NZ$1 bought 65USc in Aug 2003.....NZ$1 buys 80USc today 10 years later

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=NZ%3aNZ50GR&uf=0&type=64&size=4&sid=1392984&style=320&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=20&rand=984122861&compidx=SP500&ma=0&maval=50%20200&lf=1&lf2=0&lf3=0&height=635&width=1045&mocktick=1

[CJ]

CJ ... They say food?yes. Except in India if a daughter is getting married, in which case, the obvious answer is gold.

[winner69]

Interesting stats posted by nzx last night

Only 8% of directors of listed companies are female

Diversity obviously important

[MAC]

A humble question for the TA's, not being one myself.

With FBU reporting strongly and potentially on the rise once more, is it possible or even probable that the NZ50 index will march to its own beat and shrug off any looming correction in US markets, just as the NZ50 totally shrugged off the 2012 Q4 "fiscal cliff" correction ?

[Hoop]

From a TA point of view....the Wall st indexs have their MA50 's broken, the NZX50 which is testing it's MA50 support line and today seems to be bouncing up off it which is bullish in the short term view....for the longer term view both markets have old bulls in charge and I suspect the Wall st bulls might be dead ...NZX50 has been in sync with Wall St which makes the NZX50 bull suspect although there's no confirmation yet.....a NZX50 rally past 4675 will prove the bull is alive and well..Atm it is 4554 (up 1%) thanks mostly to the huge positive volumes from AIA and FBU who both reported in today.

From an financial view todays NZ sharemarket is an abnormality as Equities in Asia are down again today Europe took a bath last night and there's all sorts of talk going on in the States about corrections....Moosie may think NZ is a safe Haven but it's not. NZ economy is too small and a one primary sector economy....As we speak our NZ$ is down with money outflowing which makes me wonder where the money is coming from to fuel this stockmarket rally today...

[MAC]

That one primary sector economy is soon to be the power generation industry, the NZ50 may never go up or down again !

There's always room for optimism Hoop, plenty of fundamental reasons why NZ may outperform, just look at this tailwind, there seems to be little fear in the VIX or XVI just like during that Q4 2012 fiasco also.

4736

[Major von Tempsky]

Like most investors here I much prefer to invest in individual stocks for logical fundamental value reasons.

The NZX50 can do what it likes - its irrelevant.

[TimmyTP]

Like most investors here I much prefer to invest in individual stocks for logical fundamental value reasons.

The NZX50 can do what it likes - its irrelevant.
Excellent provocation MvT, I'm sure there is some unwary fish lurking around who will nibble on that!

[Major von Tempsky]

One can't help noticing that since the rise of China and other BRICS and near BRICS countries the NZ sharemarket is only weakly linked if at all to the overnight performance of the Dow Jones. Since the rapid recent weakening of the Australian economy the link to the Australian sharemarket has also noticeably weakened. Our interest rates are different from theirs, our inflation rate is different from theirs. Note how different the performance of FBU and BLD have been.
If I can get something approaching 10% gross dividend yield return into at least the medium term from companies which don't depend on exporting or importing why should I care for or factor in as important your alleged linkages?

[Major von Tempsky]

One obvious reason is because I invest in NZ, not overseas. Given the fierceness of the NZ tax regime on overseas investment and the impossible to anticipate vagaries of the exchange rate, it makes sense just to invest in NZ. And if you further restrict yourself to utility type investments where exports and imports don't matter then the links you speak of don't matter. As long as NZ continues to at least grow slowly in its economy and population then individual countries or even blocs overseas can go to hell in a handcart and NZ is basically undisturbed.
In the 1960s 90% of NZ's exports went to Britain and 90% of its exports were meat, wool and dairy products.
Now we have 3 large customers, China, USA and Australia each taking about 25% of our exports and our exports have diversified somewhat.
China's economy has now turned upwards again after slowing slightly, the US is expanding, and if you read the latest Economist even the EU is expanding again now.

[MAC]

A good move up in the NZ50 today, seemingly shaking off all that go away and taper off the fiscal cliff news from the US.

Any TA worth their salt should be able to tell us where the NZ50 will be at years end. Anyone prepared to have a crack, it's only four months away ?

[winner69]

A good move up in the NZ50 today, seemingly shaking off all that go away and taper off the fiscal cliff news from the US.

Any TA worth their salt should be able to tell us where the NZ50 will be at years end. Anyone prepared to have a crack, it's only four months away ?

You being cynical now mac ....not your usual modes operadi mate

I always said nzx50 to be 5000 by Christmas ....said that last year .....and this year ....I be right one year eh

But then the world don't like Octobers ..... Yanks have a day off before the action starts ....so how about 4000 then.

[MAC]

I'm just looking for some TA forecasts winner, something we don't seem to see a lot of when it comes to the NZ50 on this forum ?

[Hoop]

I'm just looking for some TA forecasts winner, something we don't seem to see a lot of when it comes to the NZ50 on this forum ?

You don't see a lot of them because TA can't foresee the future ....TA indicators rely on trading data...

Chartists use Repeating Chart patterns statistics to obtain a probability...using the principals.. that investor behaviour repeats and "this time isn't different"
Chartists also use cycles..(cycles always repeat 100% of the time)... extended trend lines/cycles, extended support and resistance lines etc.

Being a Chartist I like to think I forecast better than a Weather Forecaster....therefore I know I'm better than an Economist because Weather Forecasters think they are:;)

Us Chartists had a bit of serious competition a few years back with Paul the Octopus (http://en.wikipedia.org/wiki/Paul_the_Octopus) but since his demise the spotlight is back where it rightfully belongs

[Hoop]

Mac you brought back some memories about Phaedrus..He was mostly a TA man did very little charting with patterns or extended channels to try and predict the future.
Being a TAist and quoting that TA can not predict the future, he used TA indicators with history up to the "now"...e.g 6 month charts... however He got p1ssed off with various posters who claimed he devised sell signals with hindsight and why didn't he give them advanced warnings about next week or next month... so on the 4th June 2009 he created the NZSX50 - Good News thread and at post #1 did a sarcastic "tongue in cheek" chart projection of the next NZX50 top naming the date and exact time it would happen.. unfortunately Post #1 chart is no more as the website Phaedrus was using closed down and all his charted data disappeared into cyberspace.....This is the first 3 posts... the humour is beautiful..


It will take a 53% rise from current levels for the NZSX50 to regain its 2007 peaks. I am pleased to be able to report that this will happen at 2.15 pm on 19/12/2011.

Naturally, such a confident assertion rests on a couple of minor assumptions :-
(1) The bottom of the Bear market was reached on 3/3/09.
(2) The subsequent recovery will be at the usual 20% per annum.

http://h1.ripway.com/78963/NZSX5064.gif


Phaedrus, thanks for this. Can you give me the time it will be reached? I want to place my sell orders now and pre-book the debt-financed holiday.

http://www.sharetrader.co.nz/images/smilies/smile2grin.gif


2.15pm, Placebo. I've already told you this. Pay attention!


However two years after this chart was made (post#1) even Phaedrus was starting to wonder "WTF" together with some wonderful black humour when the NZX50 index kept traveling up this channel as predicted

Below is a copy from his 27th June 2011 post #229 (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News!/page16) modified chart with his colour coded personal indicator (the Phaedrus MSI indicator) added

Interestingly... back then with the wall of worry and threats of another (worse) GFC , the 4400 top seemed to be a too high a target.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/NZSX627.gif

[MAC]

Fundamentals are looking good Hoop, thought your charts might be looking a bit rosier too ?. Although, having a weather forecaster in the family I can understand that making a prediction is a delicate thing.

We should thus then now confidently and absolutely predict, that it will be either sunny or rainy, and the NZ50 will be either up or down.

I think we can all probably do a little better than that actually, lots of exp in this forum ?

[MAC]

How come Daryl Guppy can do it so well and easily and no other TA’s can ?

Image below from CNBC this morning. “Sideways pattern watch for a re-test of 4400”

Perhaps Phaedrus and Guppy are the same person ?

4777

[Hoop]

How come Daryl Guppy can do it so well and easily and no other TA’s can ?

Image below from CNBC this morning. “Sideways pattern watch for a re-test of 4400”

Perhaps Phaedrus and Guppy are the same person ?

4777

Two lines on a chart. and a guess...is that chart result above the best he can do...scheesh

EDIT:
when I get time tonight I try to post something.. I guess it is overdue to update the last chart which I posted was on 2nd July 2013 post #1174 (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News!/page79) These charting posts take upwards of 1/2 hr or more to produce depending how much data I add to it..

[winner69]

Two lines on a chart. and a guess...is that chart result above the best he can do...scheesh

Its probably what he said that impressed mac

He's a guru mate ....if he said DIL was in a uptrend and would hit 800 by Christmas he would egt another zillion subscribers

[Mista_Trix]

Interesting,
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11120104