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  1. #1011
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    Quote Originally Posted by Hoop View Post
    Looking at the Copper technical breakdown this morning... this could be the warning indicator towards the worst case scenario ...........................the cancellation of GOT
    It seems Dr Copper's warning was mostly ignored by the "Equity Experts"...

    Its different this time, right??? The real doctor is Dr Media and Dr Media has said Dr Copper has lost its mojo as an economic indicator ...hey we all believe in the written word so it must be true..eh?

  2. #1012
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    Statement from JP Morgan Chase's USA's chief strategist:

    Just after Lee defended his bullish outlook on CNBC, major U.S. stock market averages took a downward swing, with the Dow dropping 120 points by midday. But as investors worry about nearing the end of the five-year bull market's shelf life, Lee said every bull market that has lasted more than four years ends from a single culprit: a recession.

    If that is indeed correct, question is:
    Is the USA heading for recession?

  3. #1013
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    Quote Originally Posted by Lost in space View Post
    Statement from JP Morgan Chase's USA's chief strategist:

    Just after Lee defended his bullish outlook on CNBC, major U.S. stock market averages took a downward swing, with the Dow dropping 120 points by midday. But as investors worry about nearing the end of the five-year bull market's shelf life, Lee said every bull market that has lasted more than four years ends from a single culprit: a recession.

    If that is indeed correct, question is:
    Is the USA heading for recession?
    Actually...I don't believe in argument that recession is the main cause of an end of the Bull market cycle...

    From my viewpoint the main cause of an end of the Bull market cycle is exhaustion of available money towards that market....Remember the Economy and the Equity Market don't correlate all that well (Crestmont Research)..Its the sharemarkets own stellar success that sows the seeds of its own destruction (greed)....

    At the start of the end (bull market) the overall market investor is so optimistic they will have all of their money invested, the only way to buy more is through borrowing and/or debt margins and because they are so convinced that the market will continue its stellar climb, they lose their fear and commonsense and do things e.g upping the mortgage on their house and using each correction as the "buying in the dip" opportunity....Institutions are criticised by their investors if they aren't all in taking advantage of the boom..

    ...but there comes a time when money needed to accumulate stock runs out and the leveraged assets reaches a tipping point... one by one buyers are reluctantly forced to leave the market, prices fall back due to fewer buyers and at some point margins are called ....money then evaporates and is lost forever adding to the available money woes... momentum to the downward trend increases ...

    So the longer the Bull Market lives on in this last phase (Stage 4 ..exuberance state) the bigger mess to clean up....

    I've re-posted this margin debt /S&P500 chart below...as you can see, already the potential mess at the tipping point will be huge enough for the Equity Market to cause a recession..It has done just that in history..I can see no reason why it should be different this time ..

    The chart below is 20 years and shows the leading indicators turning before any recession effects.... ..going further back in history shows a similar stories... The famous and bizarre one being the tulip market which caused the 1634-1637 depression...and then we had the big one.. 1929 Wall St crash (Sharemarket crash not the sole cause) followed by the 1930-1933 Depression

    When the sharemarket is not the cause of a recession (or worse) it is another leveraged overextended market such as Property, an innoviation (industrial revolutions) e.g railroads in the 1870's..or most often a combination of many market (all the ducks lining up in a row)

    The financial market bust up and resulting economic slump is a result but not the cause.




    OK this is America's problem, not NZ's..we are the rock star country ..right
    Usually when there is a crisis, money heads back to the safe havens..NZ isn't a safe haven ...Paradoxically if America is in the sh1t the money still flows back because it has this safe haven status....Same story ...negative money flows creates lack of available money ...demands slows...we all know the story from here...
    Last edited by Hoop; 14-03-2014 at 10:05 AM.

  4. #1014
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    Bear markets generally start at the height of economic growth (when GDP peaks in the cycle). When GDP approaches zero or goes negative (recession) the damage (economic and shareprices) has been done. And a new bull cycle starts (or may have started)

    Most say that the US economy is still growing so nowhere near a peak in this cycle, so no bear market about to happen soon.

    Maybe that guy from JPM is predicting a recession in a year or two and that when that happens in hindsight we can say yes economic growth peaked in early 2014 as did the share markets

    So better to focus on the real indicators that tell us where we are heading in the economic cycle - the best one being consumer spending.

    (Comments based on US market trends)
    Last edited by winner69; 14-03-2014 at 09:43 AM.

  5. #1015
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    Not sure I would agree Winner that consumer spending is the best of all indicators but could appreciate that if you have a focus more on sentiment and the (P) rather than the economics and the (E) in PE, than possibly so.

    Economic and share market cycles over the last 20 years have been tempered by more modern monetary and fiscal policies with information technology allowing the feedback loop for those policies to be more direct and focused.

    Studying the fundamental drivers behind those policies IMHO provides the best indicators and triggers.

  6. #1016
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    Quote Originally Posted by winner69 View Post
    Bear markets generally start at the height of economic growth (when GDP peaks in the cycle). When GDP approaches zero or goes negative (recession) the damage (economic and shareprices) has been done. And a new bull cycle starts (or may have started)

    Most say that the US economy is still growing so nowhere near a peak in this cycle, so no bear market about to happen soon.

    Maybe that guy from JPM is predicting a recession in a year or two and that when that happens in hindsight we can say yes economic growth peaked in early 2014 as did the share markets

    So better to focus on the real indicators that tell us where we are heading in the economic cycle - the best one being consumer spending.

    (Comments based on US market trends)
    Those comments are not yours..huh?
    Consumer spending is a lagging indicator isn't it

  7. #1017
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    Quote Originally Posted by MAC View Post
    Not sure I would agree Winner that consumer spending is the best of all indicators but could appreciate that if you have a focus more on sentiment and the (P) rather than the economics and the (E) in PE, than possibly so.

    Economic and share market cycles over the last 20 years have been tempered by more modern monetary and fiscal policies with information technology allowing the feedback loop for those policies to be more direct and focused.

    Studying the fundamental drivers behind those policies IMHO provides the best indicators and triggers.
    So what drives consumer spend?

    Slowing and rising year-over-year real hourly earnings growth have been a generally helpful leading indicator of forthcoming downturns and upturns in Y/Y consumer spending. These have been followed by slowdowns and advances in the economy in general and, therefore, have also been a signal of forthcoming declines and upturns in the stock market.

    Yes the driver of the P you mentioned.

    Essentially agree with what you are saying MAC but I see a lot of these as tinkering to solve perceived problems. At the end of the day if the guy on High St has no money to spend the economy suffers to some extent no matter how creative and focused policy makers are

    Might research some of your thoughts though in interest of bettering myself
    Last edited by winner69; 14-03-2014 at 10:24 AM.

  8. #1018
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    Quote Originally Posted by belgarion View Post
    All the doom and gloom being expressed here ... ... NZ50 looks pretty overbought at present and I'm expecting a typical mini-correction that should last 4-6 weeks before bottoming and then take another 4-8 weeks before we're back to where we are now. Only if it doesn't get back to where we are now will I begin to become concerned.
    Not me Belg...
    A doom and gloomer would not be "in" 100% like me.....That may change a little today though...maybe?

    The idea behind my posts is to pull my head out of the sand and look skywards to see If there are any clouds on the horizion .

    There are some awful misalignments out there which is typical of a late stage of an mature bull market...so it pays to talk about it...eh?
    At least when you suddenly get wacked around the ears you know what did it..and get out..rather than being in denial, full of optimistic hope, buying more shares on that "dip" with money that's not yours and then later blaming Mr Market for being irrational by not showing the "true" fundamental worth of your favourite stocks.

  9. #1019
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    Quote Originally Posted by Hoop View Post
    ... There are some awful misalignments out there ...
    Do you mean misalignment from value and current share price??

  10. #1020
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    ."money then evaporates and is lost forever adding to the available money woes" Yes I agree and its why I believe the FED will need to keep printing

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