When to re-enter the market?

[Hoop]

What has to be remembered is its that time of year to expect false signals. End of one financial year, start of another, with all the tooing and frooing that that creates. The American economy is in deep trouble, about to get worse, creating uncertainty in our markets. I am quite happy sitting in the sidelines getting my 8.5%, plus i expect another 8.5% in exchange rates in 2008. I would rather miss out on a few bob taking the risk at the moment than try and get out later in the year, when the markets all tank. Macdunk

Similar strategy to you MD except I'm having a dabble at the moment with this recent rally. Everyone seems to be bullish at the moment but until the trends tell us otherwise this is just another short term rally beginning within the longer term bear market.
Therefore Bear market investing strategies should still apply.

PS agree Footsie (without any major trend breaks in the near future) it seems so

Key indicator to watch for on the DOW is the resistance line of 12800 if this is broken upwards it is a bullish sign.

[Hoop]

A sobering chart to remind those people who think life has been great on the NZX50 during these past few days. (Note last index point date 31 March)

Selling pressure has been reduced (bollinger bands not on chart) and it seems the steep downward short term trend has broken.

I would not be surprised if a rally eventuates. (Wave B?) This may present short term opportunities for the risk takers. On a negative viewpoint it may be just another **breather then resumption of the downtrend

Has to break 3940 resistence to put a bullet into the bear.....this index figure seems a long way a way at this present time.

**Circled the breathers in the downtrend...I will call them breathers as I don't think they are big enough to be called rallies.

Attachment 424

[Phaedrus]

Hi Phaedrus, looks as though a few of your indicators might be signalling a possible change in sentiment?
(Bearing in mind the potential risk at this point and need for careful monitoring/tight stops etc as per your first post on this thread.)

That's right, Liz. Of the 10 indicators featured in the first post of this thread, 7 have now been triggered. I have been doing some restrained "special situation" buying over the last couple of weeks.

This is the first time in my entire investing life that I have had plenty of money available at a time when the market was depressed. What luxury! It presents a wonderful opportunity and I am being very careful not to spend up too large too soon.

This enviable situation is solely due to my index based "market overview" moving me into 100% cash last November. When I posted this system it was criticised on the basis that it would cause me to miss the "best buying opportunities"! Quite the reverse - it has, in fact, enabled me to make the most of such opportunities if/when/as they present themselves.

I'll post an update of the original chart. Just for old times sake.

[duncan macgregor]

To soon in my opinion PHAEDRUS to get back in the market. I expect a few minor rallies before the next crash which in my opinion comes at the end of this year. Hope i am wrong but no worries, all i miss out on is buying opportunity against a few cents at the bottom.
Free trade with china will make a huge difference to what trends up or down plus the American economy downturn wont help either. Its going to be a bad year 8.5% in the bank plus an 8% exchange rate gain, is a much better return than trying to bottom pick this market. I learnt at an early age not to play at bottom picking if you want to stay out the pooh. Macdunk

[Kookaburra]

To soon in my opinion PHAEDRUS to get back in the market. .... ...... 8.5% in the bank plus an 8% exchange rate gain, is a much better return than trying to bottom pick this market. I learnt at an early age not to play at bottom picking if you want to stay out the pooh. Macdunk

True but when those who have bitten off more than they can digest have to let things pass, there could be some fine pickings to be had.

[Phaedrus]

Too soon in my opinion PHAEDRUS to get back in the market.

Gosh Dunc, I thought you were the demon full-time trader and I was the boring conservative old fart!

Certainly it is too soon to throw all caution to the winds and be anything like fully invested, but there are some really good trading opportunities out there.

I have made over 20% on PPL in 14 days, and over 40% on RAK in just 8 days, for example.

Get going lad, dust off your 30 day moving average, your 5% trailing stop and your 20% timeline and get stuck in! They work. Don't they?

[Footsie]

phaedrus can you please post an updated chart.

I must say I am surprised to see you buying this bear market rally - its high risk trading
I thought you said that you dont buy during the "caution" period....
"Stop all buys, tighten all stops"

the rally in RAK , and PPL is purely the "fisher" effect. SHe has been forced to liquidate big chunks of her portfolio... also see TOX and AVE on the ASX.....
When the seller goes the price snaps back....
to have made 40% on RAK you would have had to use this information as opposed to yuor technical techniques
Anyway well done. I never thought id see RAK run that hard..... nice short now if you ask me

[ratkin]

I must say I am surprised to see you buying this bear market rally - its high risk trading
I thought you said that you dont buy during the "caution" period....
"Stop all buys, tighten all stops"

Yes , it does seem odd that a week after pumpkin patch and rakon rally that Mr P has bought them , especially in the midst of his caution zone. I could understand throwiing aside caution after the big rally yesterday but to do so last week would of gone against everything he has been preaching for the last six months.
But hindsight is a great gift , must be up there with invisibility and time travel.
If the rally in those two stocks had amounted to nothing last week would he of been here telling us he had bought them?

[duncan macgregor]

Gosh Dunc, I thought you were the demon full-time trader and I was the boring conservative old fart!

Certainly it is too soon to throw all caution to the winds and be anything like fully invested, but there are some really good trading opportunities out there.

I have made over 20% on PPL in 14 days, and over 40% on RAK in just 8 days, for example.

Get going lad, dust off your 30 day moving average, your 5% trailing stop and your 20% timeline and get stuck in! They work. Don't they?

I think its much better to be a boring old fart at the moment. Its pointless saying i made this or that in the last fourteen days when we only have your word on it after the event. Tell the punters what to buy today not come back after and say i made a killing in a falling market. What do you suggest today for a short term trade with what type of exit strategy is much more to the point. Incidently PHAEDRUS do you know that at the moment i am the only investor on sharetrader ahead in the market in a competition. I AM WHIPPING THE BACKSIDES OFF SHREWDY AND STRAT. Hope you can make it to the Auckland event i will buy you a couple of wee drams if you front. Macduink

[Phaedrus]

"I must say I am surprised to see you buying this bear market rally - its high risk trading."
Fear not Footsie - I'm still largely cashed up. Just keeping my hand in. I'm simply buying a few favourite stocks that seemed oversold and gave good clear buy signals. They are all on very tight leashes. It's not as if I am buying to Hold, come what may! No-one really yet knows if this is just another bear market rally. All I know is that, with appropriate stocks, it is big enough to be tradeable.

"I thought you said that you dont buy during the "caution" period....
"Stop all buys, tighten all stops".
Footsie,the original "caution" system was designed to get me cashed up early, keeping me out of a market crash - and it worked superbly. It was never designed to double up as a re-entry vehicle. In any case, I am now in virgin territory, having never before been faced with the delightful problem of having a large sum of money to invest in a distressed market. I'm just feeling my way here - same as everyone else.

"the rally in ... PPL is purely the "fisher" effect. She has been forced to liquidate big chunks of her portfolio....."
My PPL entry was based primarily on a trendline break and the glaringly obvious entry of "smart money" as flagged by the steep and sudden rise in the OBV, supported by W%R and Stochastic oscillator buy signals.

"to have made 40% on RAK you would have had to use this information as opposed to your technical techniques."
Not at all Footsie. This was a purely technical entry based primarily on the trendline break, with confirmation from W%R, RSI and Stochastic oscillators, along with a parabolic SAR buy signal.

"Anyway well done. I never thought id see RAK run that hard....."
Neither did I.......