Black Monday

[Beagle]

A few weeks ago I made the call privately by e.mail to a couple of good mates that I felt strongly that the market felt like it wanted to have a good old fashioned 10-15% correction. I have been over 70% cash for a few weeks now and I'm in no hurry whatsoever to reinvest !

With one or two exceptions it is very ugly out there and there's real sustained momentum to the downside.

As I posted last week, I seriously wonder if 6500 is on the cards for the NZX, that would amount to a 14% correction at the thick end of my expected range but with the amount of momentum and the fact that overseas shareholders hold about 50% by value of the NZX and with the RBNZ widely expected to lower the OCR next month its certainly understandable why overseas investors are worried about a declining Kiwi ! They appear to be shooting first with the sell button and asking questions later which is basically what I've been doing too. Why bother pushing back against a rolling train ?

In my view capital preservation is the name of the game right at the minute.

[couta1]

Looks like the Grizzly bears come out after lunch and gave the Teddy bears their marching orders from the picnic table. Still 100% in the market, no worries aye if your used to large or extra large red arrows.

[Ggcc]

Wow what a lovely sea of red arrows today. I don't think we are at the end of it though. Must be time to only drink cheap wine.

[Edwood]

Is it just me or has sentiment really turned ugly on the NZX. Maybe its just companies that I liked the look of/researched but...

2 major company failures within the week.
A couple of weeks ago PPH listed on the ASX - SP dropped 20%.
TIL listed on ASX - SP not looking like it wants to break its mini down trend and no buyers in Aus.

Looks like funding has suddenly become a serious issue and the plug being pulled on hype companies, those not returning a buck or those not looking like they will grow a lot in the future. A real re-rating based on earnings. Am expecting the correction to continue... and today down 1.3% so far. So many of the shares I follow have sick, sick looking charts... but then again have for a little while now.

Its looking ugly out there! If you still have skin in the game, I name you brave!

The writing has been on the wall since the recent weekly selling spike followed by three red candles, we'll be heading for 5,900 in my view, the market has needed a decent shakeout for a while now and we're lined up for it as the yield play unwinds. Quite right that >50% is owned offshore, and no surprise really given the carry trade on offer. Could take a while to get to 5,900 tho, depends how aggressive they want to be offshore... at some point it will spill over into AKL property.

[BlackCross]

Interesting and positive article regarding New Zealand in yesterdays FT Alphaville section.

http://ftalphaville.ft.com/2016/10/3...r-new-zealand/

What’s bad for Australia is good for New Zealand?

"..................................The net effect has been a boom in net immigration to New Zealand since Australia’s commodity prices peaked, with about two-thirds of the increase attributable to changes in the willingness of Australians to move to New Zealand and changes in the willingness of Kiwis to remain in their homeland. At the same time, the change in relative fortunes has caused the New Zealand dollar to appreciate roughly 25 per cent against the Australian dollar, boosting the purchasing power of Kiwi consumers.China’s changing investment strategy has produced a windfall for New Zealand — through the unexpected channel of clobbering the Australian mining sector. As long as New Zealand is capable of boosting domestic spending without relying too much on household borrowing, admittedly a nontrivial challenge, this puts the country in an enviable position compared to much of the rest of the rich world. Policymakers should enjoy it while they can.

[arc]

This guy thinks he has the "formula" for selecting the next president..

http://www.msn.com/en-nz/news/world/...cid=spartanntp

[workingdad]

The writing has been on the wall since the recent weekly selling spike followed by three red candles, we'll be heading for 5,900 in my view, the market has needed a decent shakeout for a while now and we're lined up for it as the yield play unwinds. Quite right that >50% is owned offshore, and no surprise really given the carry trade on offer. Could take a while to get to 5,900 tho, depends how aggressive they want to be offshore... at some point it will spill over into AKL property.

I am all but cashed up, looking at 100k in a 5 month term deposit with BNZ for 3.5%. Just been sitting back waiting for a decent correction for a while now and have some imputation credits to burn through from AIR so might as well - if I need to break it to throw money back in to the market so be it but sitting on the fence isn't doing much for me at the moment and still cant shake the feeling the market is overpriced.

[pierre]

I am all but cashed up, looking at 100k in a 5 month term deposit with BNZ for 3.5%. Just been sitting back waiting for a decent correction for a while now and have some imputation credits to burn through from AIR so might as well - if I need to break it to throw money back in to the market so be it but sitting on the fence isn't doing much for me at the moment and still cant shake the feeling the market is overpriced.

Just remember the banks require 30 days notice now to break a TD before expiry of the term.

[blobbles]

Can anyone with a decent charting app indicate at what value NZX50 is stepping out of its start of 2012 bull price channel? Looks to be about 6800 odd, which could be taken out today with another drop like yesterday... at that point I would assume technicals are looking pretty weak with a major trend reversal possible... its got to happen some time!

Or am I just making stuff up?


(Ignore this, just noticed people have been talking about it on the other NZX50 thread, duh)

[JeremyALD]

My thoughts on NZX50 last two months through a song.....and I'm free I'm free falling.