Black Monday

[arc]

Day by day, it's feeling worse and worse, and all the daily chart indicators are pointing down though approaching oversold. However that micro daily view needs some perspective imho.

Stepping back and taking a look at the monthly chart (log scale), with simple 2 Standard Deviation channel drawn (of the entire uptrend) and still above the 10 month MA (approximates a 200 day MA), NZX is still in a very strong uptrend.

A drop through that 10 month MA and the steep rising trend line line (green), if it happened, would be cause for some concern about the up trend, and the 5,580 level appears to offer some backstop support. It's uncanny how the Fibonacci retracements land right on those supports, and even the May-Oct 2007 highs are smack on the Fib 61.8%. Spooky how those Fibs work.

Attachment 8384

Baa_Baa I agree with the sentiment but I just cant help the feeling that there is a speed bump in the world markets at the moment.

The NZ market displays the ongoing upward trend, remembering that trend lines are constructed from historical artifacts.

A downward movement on a 10 month scale wont really display until after the event, delayed reaction and all that... I used to believe in the 200 day moving average, until the advent of Automated Bot trading.

The international outlook from the narrow US perspective.. Dow Trend, Stalled since just after the beginning of 2015, a couple of hiccups since and now a basic failure to launch scenario.
Dow-Trend.png

Perhaps the US Election will help... or not.

[Lewylewylewy]

So shares are going down the tubes and will probably keep doing so until xmas... is my opinion. However, I've chosen to forgo the opportunity to get more shares by selling and buying back later, in favour of holding on the off chance that they start going up again and I end up diluting my holding. My thinking is that the drop is only due to OCR in the USA and NZ + trump risk, the companies I hold shares in aren't due to perform any worse, so my dividend investments aren't at risk of dropping.

My question is... Is this naive / misinformed / faulted?

[xafalcon]

Day by day, it's feeling worse and worse, and all the daily chart indicators are pointing down though approaching oversold. However that micro daily view needs some perspective imho.

Stepping back and taking a look at the monthly chart (log scale), with simple 2 Standard Deviation channel drawn (of the entire uptrend) and still above the 10 month MA (approximates a 200 day MA), NZX is still in a very strong uptrend.

A drop through that 10 month MA and the steep rising trend line line (green), if it happened, would be cause for some concern about the up trend, and the 5,580 level appears to offer some backstop support. It's uncanny how the Fibonacci retracements land right on those supports, and even the May-Oct 2007 highs are smack on the Fib 61.8%. Spooky how those Fibs work.

Attachment 8384

Re-do your chart using NZX capital index. Then re-consider conclusions.

[arc]

So shares are going down the tubes and will probably keep doing so until xmas... is my opinion. However, I've chosen to forgo the opportunity to get more shares by selling and buying back later, in favour of holding on the off chance that they start going up again and I end up diluting my holding. My thinking is that the drop is only due to OCR in the USA and NZ + trump risk, the companies I hold shares in aren't due to perform any worse, so my dividend investments aren't at risk of dropping.

My question is... Is this naive / misinformed / faulted?

The unanswerable question...

What is the possible impact on you IF the dividend payments are
a- Decreased in value-%
b- Stopped

IF the market recedes significantly, How long can you wait for market recovery.?

All this might just be nerves over the imminent US election, we might have business as usual afterwards... but personally I see more things in play than just that election... the world does not revolve around america. The international scene is also nervous.

Todays Low's may be next years Highs... or the reverse

[Baa_Baa]

Re-do your chart using NZX capital index. Then re-consider conclusions.

Here you go, NZX50 Capital Index, monthly Log scale, 2STD channel, 10/20 MA's, Fib Retraces from post GFC lows to recent high.

Feel free to give your conclusions.

Attachment 8393

[xafalcon]

Recent dividends have masked some detail

Up trend less strong

90 day MA now trending down by the looks of it

Still not enough to call it though

But not such a rosy picture IMO

[arc]

News related sentiment "seems" to be that Trump is NOT going to be "The Man".
Mix that with the last 3 days pause in downward movements, some apparent support for AIR, AIA, FPH etc, one has to ask is this the real thing or potentially just a brief respite in what could still be a developing bear.

Are the volumes presently passing across the table
A- Real buying, hence real support
B- Instos and Large holders feeding the chickens on the way down
C- None of the above ?

Will the US Election result in a temporary Drunken-High followed by a world class Base Jump...?

Thoughts?

[BlackPeter]

News related sentiment "seems" to be that Trump is NOT going to be "The Man".
Mix that with the last 3 days pause in downward movements, some apparent support for AIR, AIA, FPH etc, one has to ask is this the real thing or potentially just a brief respite in what could still be a developing bear.

Are the volumes presently passing across the table
A- Real buying, hence real support
B- Instos and Large holders feeding the chickens on the way down
C- None of the above ?

Will the US Election result in a temporary Drunken-High followed by a world class Base Jump...?

Thoughts?

Actually - I think it is more complicated than just Trump or Clinton. Sure - a Trump win certainly would result in a BIG drop of stocks (high uncertainty of whats happening next) - while a Clinton win probably would result in a relief rally - unless the democrats take it all (House + senate - which is possible, but could lead to less fiscally responsible behaviour ...). I would however not see a Clinton administration to be the next trigger for a bear.

However, the other potential triggers don't go away: rising interest rates, some state bankrupts, Middle East getting out of hand, Putin starting WWIII - just take your pick Personally would I think that none of these events is likely to cause the next big crash (given that people are aware of them and watch them) - more likely something unexpected happening (black swan event) ... but if we would know about it, it wouldn't be a black swan anymore.

Just watch the VIX (fear index) and start worrying if it is really low. Actually - I just checked and it is going down (and well below average) - Scary

VIX.JPG


Discl: hold roughly three times as much cash than normal ... and might need to review whether this is enough!

[Leftfield]

Just watch the VIX (fear index) and start worrying if it is really low. Actually - I just checked and it is going down (and well below average) - Scary

VIX.JPG

In fairness, if you look at the 5 year reading (i.e. longer term), the current levels seem much closer to the norm.

[arc]

Actually - I think it is more complicated than just Trump or Clinton. Sure - a Trump win certainly would result in a BIG drop of stocks (high uncertainty of whats happening next) - while a Clinton win probably would result in a relief rally - unless the democrats take it all (House + senate - which is possible, but could lead to less fiscally responsible behaviour ...). I would however not see a Clinton administration to be the next trigger for a bear.

However, the other potential triggers don't go away: rising interest rates, some state bankrupts, Middle East getting out of hand, Putin starting WWIII - just take your pick Personally would I think that none of these events is likely to cause the next big crash (given that people are aware of them and watch them) - more likely something unexpected happening (black swan event) ... but if we would know about it, it wouldn't be a black swan anymore.

Just watch the VIX (fear index) and start worrying if it is really low. Actually - I just checked and it is going down (and well below average) - Scary

VIX.JPG


Discl: hold roughly three times as much cash than normal ... and might need to review whether this is enough!

Well that statement in Red would put a dent in an otherwise good day..