NZSX50 - Good News!

[alokdhir]

Hi
Its been a while since I last visited ST forum...I've only just now seen your post..
Obviously time has answered some of your questions.
I think at this stage the question has to be asked if this is a sucker rally or is it the real thing?
We don't really know the answer until it happens. We can guess or predict with models and be optimistic with these better looking fundamentals, yet the Buffett indicator shows Wall St (the elephant in the room) as still overvalued. Other variables can come into play and be problematic, such as America poking the stick up the dragons bum one to many times....

Anyway back to TA.

The Chart below shows this rally reaching an conjuntion area with primary elements in play..From a Chartist point of view this is very exciting.. Looking back through history Conjunction points have nearly always been seen as big turning events, so I'm watching this one with great interest.
To break through a conjunction area requires great buying pressure so watch out for the signs of positive sentiment with increased market activity.
This current NZX50 conjunction contain primary elements suggests if a breakthrough occurs it would be a Market Cycle reversal and the NZX50's status would change to Bull.
With the change to Bull an investor can change from rowing to sailing investment strategy with less risk/ more reward such as buy and hold strategy.

But for now, take care as we ain't quite there yet...

Attachment 14068

Thanks Hoop ...U have shown now what exactly needs happen to change status ...ie two close over 4800 ...though u also appreciate that this rally managed to cross two initial resistance so has strength

But I feel this 4800 may be not crossed in this attempt and market may pull back to 4500-4600 to gather strength ...

Lets c what happens ...but markets always surprise most and reward few ...at this moment most are bearish so I think it will surprise on upside eventually ...maybe after pulling back first

[Baa_Baa]

The NZ50C is better illustrated with a Log Scale, imo. The story about confluence is still the same, but with the 200EMA, 38.2% Fib retrace, and the recent horizontal price support as drawn. The over head down trend lines however are different, there is no solid green line, only the hatched green line (I draw it in red) exists on the log scale chart, which happens to cross at the 61.8% Fib retrace. Summary is still the same though, a few closes above 4800 and the 200EMA is bullish.

[Hoop]

The NZ50C one year chart is looking "dangerous" so the strategy should be to wait and see.

Last week the price rise momentum conked out right on the Bull/Bear resistance line (4800)..which suggests the bear is still in control of the market.

Monday will see the NZ50C index 4600 support tested. The Wall St animals have been restless and anxious all week (see VIX), so Powell at Jackson's Hole reiterating what Monetary Policy has to do was enough to upset the Wall St animals to turn tail and run creating a bearish neck line break to a very reliable Head and Shoulder pattern on the S&P500 chart.


I'm rather negative (pessimistic) short term..
This latest 15% rally that excited people is starting to look like a large sucker rally.

To gauge some sort of perspective on whats happening it pays to look at the wider picture..I have included a 13.75 year chart which outlines the NZ50C behaviour..
You can see the Fundamental chart behaviour was still in place when the Covid bear arrived and left. The Bull market resumed from where it left off...but now the long term chart clearly shows a fundamental change in Behaviour starting early 2022..

We can't invest referring to the last 13 years as a guide..Times have changed.

NZ 50C 26082022.jpg

NZ50C 26082022 Log.jpg

[alokdhir]

The NZ50C one year chart is looking "dangerous" so the strategy should be to wait and see.

Last week the price rise momentum conked out right on the Bull/Bear resistance line (4800)..which suggests the bear is still in control of the market.

Monday will see the NZ50C index 4600 support tested. The Wall St animals have been restless and anxious all week (see VIX), so Powell at Jackson's Hole reiterating what Monetary Policy has to do was enough to upset the Wall St animals to turn tail and run creating a bearish neck line break to a very reliable Head and Shoulder pattern on the S&P500 chart.


I'm rather negative (pessimistic) short term..
This latest 15% rally that excited people is starting to look like a large sucker rally.

To gauge some sort of perspective on whats happening it pays to look at the wider picture..I have included a 13.75 year chart which outlines the NZ50C behaviour..
You can see the Fundamental chart behaviour was still in place when the Covid bear arrived and left. The Bull market resumed from where it left off...but now the long term chart clearly shows a fundamental change in Behaviour starting early 2022..

We can't invest referring to the last 13 years as a guide..Times have changed.

NZ 50C 26082022.jpg

NZ50C 26082022 Log.jpg

Lets c where it takes support ...4600 or 4500 or goes to make new low

If it makes a higher bottom then range trade for a while ...imo thats the best outcome possible in the current scenario

But I will keep my mind open ...wont let media and people's preconceived perceptions colour my mind ....let the charts speak for themselves ...in hindsight we will know which way the worm turned then we will ascribe reasons for that happening

Initially it was not supposed to cross 4600 ...but it reached 4800 ....now its supposed to make new low as thats what is real Bear market ...letc c if that comes true

[Hoop]

Update of the 26th August Chart.
Hindsight:.... Bear Market correction (sucker rally) petered out at the 4800 major resistance thereby keeping its bear status.
...................The correction was a large one and created enough positive sentiment to persuade investors to re-enter the market.

Where to now ? :....When the index broke the 4600 support a target price of 4400 was set..That mean't the 4500 support was under threat. If 4500 support failed (which it did) there is no charted support at 4400 so it seems the 4200 comes into focus (the previous low point).
The NZ50C status is Bear so revisiting 4200 has to be considered as a real possibility. 4200 is a strong support level as it has a historic support point back in September 2018 (yes...the majority of long termers that don't beat the market, their capital is now back to what it was in beginning 2019...As we chartists say famously said on Sharetrader by my Mentor Phaedrus "The market giveth the market takes away".
Although 4200 area is strong there are good odds it may break.. It has to be remembered that the market is in a Bear Market Cycle and the DOW Theory is operating (lower highs lower lows with 3 stages).

Could 4200 be the bottom?
Who knows...but from my perception the odds of 4200 being the bottom is not good, investor sentiment although negative, it's near future is still too rosy (optimistic), (VIX needs to be 40+ for a period of time) they are receiving shocks but there is no major panic yet so the DOW Theory monitors says No...My favourite (nearly 100% reliable) Duck is Copper and it says No (its still trending down) I have about 30 ducks (indicators) and they are not lining up in a row yet so the majority of ducks say no.
I will repost the ducks on Sharetrader shortly.
It seems the NZ50C bear market cycle is in its middle stages and moving more slowly than average.

NZ50C 30092022.jpg

[audiav]

Just been reading a BusinessDesk article today that mentioned the Levkovich Index so will be interested to see if that is one of your ducks Hoop

[Hoop]

Just been reading a BusinessDesk article today that mentioned the Levkovich Index so will be interested to see if that is one of your ducks Hoop

No it's not, but I will check Citi out. Thanks Audiav

[alokdhir]

Update of the 26th August Chart.
Hindsight:.... Bear Market correction (sucker rally) petered out at the 4800 major resistance thereby keeping its bear status.
...................The correction was a large one and created enough positive sentiment to persuade investors to re-enter the market.

Where to now ? :....When the index broke the 4600 support a target price of 4400 was set..That mean't the 4500 support was under threat. If 4500 support failed (which it did) there is no charted support at 4400 so it seems the 4200 comes into focus (the previous low point).
The NZ50C status is Bear so revisiting 4200 has to be considered as a real possibility. 4200 is a strong support level as it has a historic support point back in September 2018 (yes...the majority of long termers that don't beat the market, their capital is now back to what it was in beginning 2019...As we chartists say famously said on Sharetrader by my Mentor Phaedrus "The market giveth the market takes away".
Although 4200 area is strong there are good odds it may break.. It has to be remembered that the market is in a Bear Market Cycle and the DOW Theory is operating (lower highs lower lows with 3 stages).

Could 4200 be the bottom?
Who knows...but from my perception the odds of 4200 being the bottom is not good, investor sentiment although negative, it's near future is still too rosy (optimistic), (VIX needs to be 40+ for a period of time) they are receiving shocks but there is no major panic yet so the DOW Theory monitors says No...My favourite (nearly 100% reliable) Duck is Copper and it says No (its still trending down) I have about 30 ducks (indicators) and they are not lining up in a row yet so the majority of ducks say no.
I will repost the ducks on Sharetrader shortly.
It seems the NZ50C bear market cycle is in its middle stages and moving more slowly than average.

NZ50C 30092022.jpg

I feel U r inherently Bear inside ....not withstanding the current state of the market ....Your bearish posts are more then otherwise ....so it seems u have a bearish bias ....which this current situation suits very well . I will expect readers to keep that in mind too

[winner69]

I feel U r inherently Bear inside ....not withstanding the current state of the market ....Your bearish posts are more then otherwise ....so it seems u have a bearish bias ....which this current situation suits very well . I will expect readers to keep that in mind too

I’ve known Hoop for 20 years plus ….he is inherently neither bearish’ or ‘bullish’ ……calls it as he sees it, mainly based on what charts are showing.not his fault things look bearish at the moment, I’m sure he’d prefer they weren’t.

I will expect readers to keep that in mind.

[Habits]

Lets c where it takes support ...4600 or 4500 or goes to make new low

If it makes a higher bottom then range trade for a while ...imo thats the best outcome possible in the current scenario

But I will keep my mind open ...wont let media and people's preconceived perceptions colour my mind ....let the charts speak for themselves ...in hindsight we will know which way the worm turned then we will ascribe reasons for that happening

Initially it was not supposed to cross 4600 ...but it reached 4800 ....now its supposed to make new low as thats what is real Bear market ...letc c if that comes true

"I C said the blind man to his deaf son"

Actually I dont, Yahoo Finance only shows maximum last 5 trading days on the nz50 capital index nz50c and there is no chart under the usual ticker mark ^nz50c

Most if not all action will be driven by offshore events and sentiment in the short term or even the medium term

Best place to be is out of stocks. What do all those holding KS do, move to less risk or too late now?