Investing strategies and secular bear markets

[Dusty]

Double top Vix around Nov/Dec and downtrending since, indicating fear in market may be subsiding.
http://finance.yahoo.com/q/ta?s=%5EVIX

Big job cuts slowing or ceasing to occur may be just as pivotal for restoring confidence in the markets (Nissan just anounced its cutting 20,000 and anglo-platinum 10,000)

Any sectors showing absolute or relative strength can be seen as a bottoming sign, transportation, tecnology, or maybe even financial sectors this time, they got us into this mess so maybe they will lead the way out.

[Hoop]

Hoop
While i respect your anaylsis i wonder if you have answered yes in some cases when in fact the answer is not clear?

eg There is nothing in TA to suggest a bottom has been reached

...i wonder if you have answered yes in some cases when in fact the answer is not clear?...
Footsie,
I try to think/analyse unemotionally, but with the state of the economy there may be personal biases that I'm unaware of. I try to be as accurate as possible.

Using these historic indicators is a different method to try and pinpoint at what stage of the cycle the Equity Markets are situated. With this Global financial mess combined with media noise it is very hard to access the situation accurately...using historic indicators and applying them to the "now" is only one of many methods an investor could use.

eg There is nothing in TA to suggest a bottom has been reached..
Hmmmm... exactly ...may not be bottom, but may be bottom....who knows at this early stage. No-one can predict the future accurately....Even the absolute best future predicting indicator in theory (if one could ever be found) would still come unglued with a "black swan" happening.
TA will only tell you a bottom has occurred well after that event has happened as would commonsense....therefore one should employ other indicators or group of indicators for assistance.

[Footsie]

I'm assuming yuo are tracking the US and not Aussie or UK or NZ etc

The US market is (namely the DOW ) at its second lowest close for the whole bear market.
pointing to the fact that this bear is very much alive and roaring.

Sp500 even the ASX. within striking distance of the lows. eg 1-2 days trading.

So technically speaking the bear is very much alive as of today.

[winner69]

I'm assuming yuo are tracking the US and not Aussie or UK or NZ etc

The US market is (namely the DOW ) at its second lowest close for the whole bear market.
pointing to the fact that this bear is very much alive and roaring.

Sp500 even the ASX. within striking distance of the lows. eg 1-2 days trading.

So technically speaking the bear is very much alive as of today.

ASX200 still in a downtrend ..... but an optimistic would say consolidating around the 3500 mark

[Hoop]

I'm assuming yuo are tracking the US and not Aussie or UK or NZ etc

The US market is (namely the DOW ) at its second lowest close for the whole bear market.
pointing to the fact that this bear is very much alive and roaring.

Sp500 even the ASX. within striking distance of the lows. eg 1-2 days trading.

So technically speaking the bear is very much alive as of today.

Disagree....only when a new low(bottom) is reached will I agree.

[Footsie]

i've found that a 13/34 week m/a provides a reasonable long term indicator of a bear/bull phase and the 13/34 day m/a provides a faster short term indicator

Both are still on Bear


The 13/34 day m/a will easily get me tranching back in when the market is only 10% off its lows.

Unless you beleive in a complete almost vertical V shaped recovery (starting now) there is still much consolidation to occur (at best) at worst the new lows lie ahead.
I cant see the weekly m/a crossing for some time yet

I remain unconvinced.

[Hoop]

This is a secular ST thread remember...this thread deals with very long market index behaviour to indicate what strategies investors should employ ....not everyday noisy events with ultra short term assumptions that seemsto be taking up our time at the moment... there are other ST threads for that.

Footsie quote.."I'm assuming yuo are tracking the US and not Aussie or UK or NZ etc.."

Basically yes...with reference to this ST thread the DOW has over a 100 years of data and is the most researched index in the world so information using the DOW makes sense..also S&P500 is well researched and also has a long history. Using this thread a poster can't recite NZX50 accurately because this index has not been around long enough to give us reliable long term (secular) information.
Very long term history's tell us, what we are now experiencing is not an unusual one off event..it has all happened many times before and we should learn from that.

Footsie... I track many indicator charts each day and see most of my automated daily updated charts (probably about 30 out of about 50 or 60) each day ...many are not in equities some are in those indicators I have shared with readers on ST


Therefore your assumption is wrong....I do track the various Aussie and the various NZ ..etc....every day.


The most informative thing I have learn't from tracking using my own automated programs is how mis-informative the media is at the moment
some good news examples being ignored at the moment:
***FTSE 100 has been in a confirmed minor (secondary) uptrend since 21 Nov 2008. Primary trend is still down
***NZX50 has been in a confirmed minor (secondary) uptrend since 21 Nov 2008 primary trend is still down
***NASDAQ 100 and Canada (TSX) has been in a confirmed minor (secondary) uptrend since 21 Nov 2008 primary trend is still down
*** The DAX and Hang Sing recently broken upwards out of its trend boundaries
*** China the 2d/3rd biggest economy in the world!!! Shanghai Market index has recently experienced a Primary trend reversal ..officially in a Bull market now


***Gold (priced in US$) is experiencing a short/medium term uptrend but is still in a longer term downtrend since March 2008



Note No 9 indicator in my post quote
9... History: Equity markets bottom out halfway (58%) trough an economic recession.
NZ was one of the first countries in the western world to enter their recession during this present global downturn..is NZX50 one of the first to see the Equity market recovery? ...personally, its looking good at the moment.


Yes bears are still operating with the ASX200 Presently testing and retesting its bottom, nervous times here, but the good news is that it has respected the previous bottom (3300) so maybe a future bullish rather than bearish sign? time will tell.
Note No 9 indicator... Aussie was one of the last countries to enter the recession (some say it still hasn't)


Most charts I use are looking OK now...some aren't great but no signs of doom and gloom that past us by in October -December when all my charts looked like crap... yet the media and the people who recite media links seem to be living in the past. If these media reciting people actually sat down and did their own research rather than reading about it second hand they would see a different picture emerging since Xmas...Yes we know times are tough and some extremely tough in some sectors of the marketplace but there are other sectors that are creaming it at the moment ..where is the media with these market sectors...absent !!!
Typical human behaviour of the end part of a bear market cycle as outlined by the DOW Theory

[Footsie]

Hoop

excluding insolvency

Tell me a sector that is creaming it...... and dont say infastructure, because I dont believe you.

Hoop, whilst you might be right and I'll be more than happy if you are. You have to ask yourself. We have seen the biggest worldwide wealth destruction since the 1930's est. 40% of global wealth wiped out. The entire world is in recession at the same time (rare).
The bear market has only been running for 15 months, i'd expect there to be a false dawn at some point this year and it could well be a bear rally which runs 30-40%, heck it might even last 4-5 months. But i understand that anything can happen. so i woulndt bet my life on that scenario

I respect your research and your calls as you picked the top. So whilst i'm a non-believier at present i have an open mind.

[Stranger_Danger]

Footsie. I take your point and know of no sector that is "creaming it".

You are right to be worried about demand destruction - I sure am!

Some sectors I believe are suffering less demand destruction than others are gold (producers only), debt collection, waste management and discount retailing.

Like basically every company in every sector, they're having to fight for every dollar of sales and cut every dollar of expense they can. However, I believe these sectors are relatively better positioned to lose less demand than most, and that which they lose is arguably compensated by the multiples available.

Three other sectors that many would call defensive are healthcare (too expensive), regulated utilities (too much debt) and other infrastructure (too much debt) - I don't like these sectors for the bracketed reasons.

I'm finding these times fascinating - even the definition of "defensive" is up for grabs.

One question many should be asking but aren't. Would you rather have a company with very defensive revenues, but lots of debt, or, be more exposed to consumer demand but have no debt and cash on your balance sheet?

I'd choose the latter and am trying to go one better so seek good balance sheets with *some* demand defensive qualities.

[Hoop]

Footsie, maybe of interest for you

An interesting fact, the IMF declares a World recession when the world growth rate falls below +3%

Your quote...."..The entire world is in recession at the same time (rare)..."

I guess your statement is similar to my "creaming it" statement ..a loose statement but I can comprehend the meaning of it, so no worries..However, your statement did make me think that I would like to know more , so this link (below) I found, identifies which Countries in the World that are curently in recession and also lists those that aren't. Outlook for rest of 2009 shows some countries will enter recession and some will come out of recession The author** is overall rather pessimistic for 2009 much more pessimistic than the IMF.
http://www.forbes.com/2009/01/14/glo...15roubini.html

**Author ..Nouriel Roubini, a professor at the Stern Business School at New York University and chairman of Roubini Global Economics, is a weekly columnist for Forbes.com. A number of analysts at Roubini Global Economics assisted in the writing of this week's column.