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Thread: Black Monday

  1. #7921
    Legend Balance's Avatar
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    Funny old world - Did the market collapse of March 23rd 2020 actually happened?

    https://finance.yahoo.com/news/coron...075532395.html

    European stocks gained for a third consecutive day on Wednesday as strong data from China’s services sector fuelled investors’ hopes that the global economy will stage a strong recovery from the coronavirus crisis.

    Markets looked set to side-step any impact from the continued civil unrest in the US, which saw largely peaceful protestors defy curfews across the country on Tuesday night.

    A closely watched survey by IHS Markit found that China’s services sector’s purchasing managers’ index (PMI) reading came in at 55.0 in May, its highest since October 2010.
    Last edited by Balance; 03-06-2020 at 09:44 PM.

  2. #7922
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    Pierre Haski, a noted French journalist, commented on France Inter on Monday: "Beijing could not have hoped for a better gift. The country that designates China as the culprit of all evils is making headlines around the world with the urban riots."
    'We are all George Floyd': Global anger grows over a death in Minneapolis.
    https://www.nzherald.co.nz/world/new...ectid=12336411

  3. #7923
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    stimulus picking up again

    ECB set to scale up stimulus as new data could indicate a need to do more


    https://www.cnbc.com/2020/06/03/ecb-...o-do-more.html

    china also started some QE this week all in all plenty of money printing worldwide happening and obviously it is flowing to a degree into equity markets.

    we picked the bounce point of the market pretty good from the march plunge

    heres a update of the long term chart from a posting earlier , mentioned on the thread about the previous low plunge was the area to watch for a bounce and panned out good. the only surprise being the size of the bounce and the short bear also the divergence in fundamentals from reality due to money printing. abc is the correction wave in the elliot wave count.
    NZX showed similar wave counts with the abc confirmed around 8600 level

    Screen-Hunter-515-Jun-04-05-45.jpg

    most of my interest now is in US/aus as trading commissions are much lower ( zero in the US and under .11 or less in aus ) than NZ by a huge margin now. NZ is not a good trading market because of liquidity and commissions. it is good for income only really and has become small market for opportunities
    Last edited by bull....; 04-06-2020 at 07:07 AM.

  4. #7924
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    The S&P 500 has returned 37.7% over the last 50 trading days, making it the benchmark index’s largest 50-day rally in history, according to LPL Financial.

  5. #7925
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    Quote Originally Posted by clip View Post
    The S&P 500 has returned 37.7% over the last 50 trading days, making it the benchmark index’s largest 50-day rally in history, according to LPL Financial.
    The markets are forward looking they say ...l.as one pundit puts it from today’s level looking forward to negative returns over the next 10 years on the S&P500


    Just as well that’s not today’s story.
    Last edited by winner69; 04-06-2020 at 08:17 AM.
    “Just consider that maybe the probability of you being wrong is higher than you think.”

  6. #7926
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    Crazy.....seem to be so disconnected with the current condition.

    Too many newbies buying ... ignoring the fundamentals of companies

    Next crash will be worst

  7. #7927
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    Don’t fight the Fed.

    And what did the doom merchants and short sellers do?

  8. #7928
    CEO Butch Analytics Ltd winner69's Avatar
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    Quote Originally Posted by King1212 View Post
    Crazy.....seem to be so disconnected with the current condition.

    Too many newbies buying ... ignoring the fundamentals of companies

    Next crash will be worst
    Just think of today and maybe tomorrow .....future don’t matter King
    “Just consider that maybe the probability of you being wrong is higher than you think.”

  9. #7929
    Advanced Member King1212's Avatar
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    I know master winner.....I am pretty scared now to buy and hold any shares

  10. #7930
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    And overnight news that the UK is struggling to reach a trade deal with the EEC ....good for NZ trade.

  11. #7931
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    Quote Originally Posted by Left field View Post
    And overnight news that the UK is struggling to reach a trade deal with the EEC ....good for NZ trade.
    https://www.stuff.co.nz/business/121...in-new-zealand

    And here’s S&P giving the thumbs up to prospects of economic recovery in NZ & 😳 lower than forecast unemployment.

  12. #7932
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    Quote Originally Posted by King1212 View Post
    I know master winner.....I am pretty scared now to buy and hold any shares
    Time to be bold when the King is scared.

  13. #7933
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    Quote Originally Posted by King1212 View Post
    I know master winner.....I am pretty scared now to buy and hold any shares
    People have been saying that since March 23rd, saying this is a sucker rally, saying there is no V shaped recovery possible.. all the while every day the opposite has been happening and they have missed out on nearly 40% gains since the low. Given there is not much longer until back to pre-covid levels, how much longer do people hang on desperately hoping for a crash to get back in?

  14. #7934
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    Quote Originally Posted by clip View Post
    People have been saying that since March 23rd, saying this is a sucker rally, saying there is no V shaped recovery possible.. all the while every day the opposite has been happening and they have missed out on nearly 40% gains since the low. Given there is not much longer until back to pre-covid levels, how much longer do people hang on desperately hoping for a crash to get back in?
    Market is always most exuberant close to the peaks ... take care out there.

    How long do you think company earnings and share prices can stay divorced from each other?
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  15. #7935
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    Just noticing: CNN Fear & Greed Index moved up to 60 (i.e. moderate greed). Not the highest I remember, but pretty remarkable for a situation where company earnings for many industries are squashed. How high can it go before it drops?
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  16. #7936
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    Quote Originally Posted by BlackPeter View Post
    Market is always most exuberant close to the peaks ... take care out there.

    How long do you think company earnings and share prices can stay divorced from each other?
    However long they've been divorced for already, 3 years? So, another 3 years

  17. #7937
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    Quote Originally Posted by clip View Post
    how much longer do people hang on desperately hoping for a crash to get back in?
    Who's desperate? Plenty of things to spend money on other than overpriced shares!

  18. #7938
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    Quote Originally Posted by clip View Post
    However long they've been divorced for already, 3 years? So, another 3 years
    Not quite sure where your three years come from, but I give you that the correlation between Stock Market Index (here S&P 500) and the relevant PE was over the last 20 years somewhat counter intuitive (blue line is the PE, black line is the index):

    SUP500 vs PE.JPG

    (chart courtesy to : https://www.marketwatch.com/story/th...ght-2020-05-09)

    For long periods it looks like the higher the PE (i.e. the lower the earnings), the higher the Index, which does not make sense in a rational market.

    Obviously - there are other factors in the play like reserve banks inflating equity prices by slashing interest rates and by sprinkling free money (QE) around. Easy to see in the chart how stocks getting dearer after the GFC ...

    The questions I see are:

    1) Given that stock prices don't follow any natural laws ... at what stage will the majority of stockholders think that the PE ratio they are paying is too high? In the dotcom bubble it was 24, in the GFC it was 15 and now it is close to 21.

    2) Is the current PE ratio (21) which is still based on last FY's earnings really reflecting the forwards earnings, or is it more likely that earnings crash rather than go up (or stay constant) from here? If earnings go down by 50% in average than this would double the PE. Is a PE of 42 still a sensible price to pay for a stock?

    Anyway - what I can see in this chart is that the PE (again, based on last years earnings) is already coming close to its 2000 peak (dotcom bubble), while the index is basically at an all time high.

    I think this is a reason to be cautious, but if you think that trends only can go into one direction, then good luck with your investment strategy ... ;
    Last edited by BlackPeter; 04-06-2020 at 11:38 AM.
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  19. #7939
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    I was in the doom merchant category, if you want to use that terminology. DOW has hit it's 200 day MA and nothing is rattling this rally, it seems.

    So now, I'm thinking - could it be? Are we actually going to put in a V-shaped recovery?

    The very fact I've caught myself thinking that is enough to keep me on the cautious side.

    Shorting exacerbates the problem; they pile on thinking it's the peak, the market does a number on them and we get another short squeeze.

    You do have to wonder if something has to give, eventually.

  20. #7940
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    Quote Originally Posted by Entrep View Post
    Who's desperate? Plenty of things to spend money on other than overpriced shares!
    Yeah, exactly! I bought some new golf clubs yesterday!

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