NZSX50 Index

[KJ]

Looking very similar to May 06 isn't it

It took 4 mths to fall 10% then-much faster this time & no end in sight.

[Lizard]

Liz, here is the Aus equivalent of the NZSX chart, as at 3.30 pm.

Hi Phaedrus,

Another question re these charts - it seems easy to see the markers for the beginning of a "caution" period at the time they are triggered. It looks less easy to see where the end of the "caution" period has occurred without a few days hindsight - after all, most of the oscillators cross the line at several points during the "caution" period and it only becomes obvious where the final crossing was a couple of days after it occurred. Any tips on how best to spot the end point in real-time? Thanks, Liz.

[Phaedrus]

Liz, this will happen every time the Index goes sideways in a Caution period. You will notice that this has not happened at all with the NZSX50, which has dropped during each Caution period, or when the All Ords dropped (as in 2005).
If you find this too disconcerting, there are some things that you can do.
(1) Use longer time periods for the indicators.
(2) Smooth the indicators with a short-term moving average.
(3) Rather than taking a consensus approach, wait for all indicators to trigger before beginning or ending a Caution period.
For all that, I can see that I drew the end of the 2006 Caution period in the wrong place. It should have been around 5/9/06 rather than 25/9/06 as marked.
In practical terms, a strictly demarcated Caution zone is an over-simplification of the situation. The degree of caution with which I trade is influenced by the number of indicators that have triggered. It's not something that is only full on or full off - it is increased or decreased incrementally, as the individual indicators trigger.

[Lizard]

Thanks Phaedrus. Yes, the indicators definitely give a clearer picture for the NZX. And, yes, it makes more sense if you move the caution line back for the 2006 period as you suggest.

The chart I am looking at for the ASX suggests it might be almost out of the caution zone using the limited oscillators I can see? Or would you want to see a confirmed uptrend?

NZX doesn't look close yet from my view.

[Phaedrus]

Two of six indicators have risen above the caution threshold.
One more and I will move to 50% cash there.
Cautious old bugger eh?

[ratkin]

All very well being cautious but you have missed most of the best buying and could be about to re enter the market as the rally runs out of steam.

[Lizard]

Cautious old bugger eh?

Better cautious than impulsive. Is "decisive" another alternative?

[Phaedrus]

Ratkin, it seems to me that you blow hot and cold. For example, here are some of your recent comments :-

"p/e ratio of market still far too high , another 20% drop should see some fair pricing" (Market has gone up 6% since that post)

"next stop 5000" (when All Ords 5800, currently 6140)

"The market is going to take a while to recover from this type of beating.
Looks like the end of the bull market , the confidence has all dissapeared."

Your comments regarding the recent weakness of MBL were particularly hysterical ....."Could be another symptom of the end of the american empire, the rise of the Chinese will be unstoppable , the west is now in the same position as the roman empire just before its demise. Barbarians at the gates while debauchary and decadence consume the citizens. The genie is out of the bottle, no going back now, the west going to be hit on all fronts , religious , economic........" (MBL has risen more than 20% over the last few days).

In short, Ratkin, you are a candle in the wind.

As for my having "missed most of the best buying", what garbage! There are plenty of good stocks still heading down. What's the hurry?

[ratkin]

your showing symptoms of stalking , particularly like the way you have taken my tongue in cheek comments about the end of the american empire out of context. Top work.

Dont know why you so touchy , easily wound up these days, becoming too easy

[Jay]

Thanks Phaedrus for the charts.
Pardon my ignorance, but what is the Slow Stochastic Oscillator as opposed to the normal one. Is it just the periods in the %k are longer than normal. I have tried to read up about it but have not found the answer. Look like a separate formula maybe used?
I note you do not plot the %D indicator (moving average with it either - a bit redundant I suppose)
It does not seem to appear as a separate indicator on any of the formula sites I've checked.