NZSX50 - Good News!

[Hoop]

A significant feature of the last phase of a bull market cycle is often the lack of a decent correction which keeps everyone "in" capturing capital gain and are happily believing this uptrend will last a lot longer time yet ..In this last phase when correction indicators go off they "cry wolf" and investors eventually lose belief,criticise, and then ignore...When optimism reigns supreme and nearly everyone ignore warning signs, the cyclic top is near...(DOW Theory)


I made this chart this morning for a bloke who was interested in Bollinger Bands..I didn't intend to post it on ST as the market is in this "cry wolf" (Moose roaring season) phase...... but since everyone is posting pretty pictures, I thought "what the hell"...here is mine for what it's worth.

The predicament this person had was figuring out which way the trend would go after the Bollinger Band squeeze..adding some TA indicators helps solve the puzzle so the chart below is self explanatory....and odds favour it to be bleak this time.

...but looking back all these other corrections on the chart, TA is starting to look more like a "Drama Queen" with these "cried wolf" warnings as the corrections are followed by numerous higher highs reducing investors fear and starts breeding "buy in the dip" investors who actually cause these corrections to become shallower and shallower as their numbers grow...

However investors who use TA for buy/sell timing of shares should stay loyal to the discipline it's prudent to lay low during the warning periods...and treat the minimal opportunity cost of doing so as an insurance policy ...There will a time when topping up in a dip will prove an expensive lesson about downtrend/reversal risk

[winner69]

Hoop well done

Your comment re dips becoming shallower and shallower. Read this http://hussman.net/wmc/wmc130415.htm

ESP the bit about Somette

[bull....]

Ill stick my neck out and say last mth performance was a outlier and well revert to the mean this mth

[Hoop]

Buying the dip:

https://uk.finance.yahoo.com/news/na...202120866.html

[Mista_Trix]

Is it your opinion we're coming down the other side Hoop?

[bull....]

like i say reversion to the mean this mth

[bull....]

Actually rotation from growth stock like tech has been occurring for a while now money going to utilities, defensives

[nextbigthing]

So Hoop, in the absence of a blatantly obvious catalyst such as a major country going bankrupt for example, how does a chartist tell whether it's a healthy correction or the start of a proper bear cycle?

Where are we in your opinion? My 'charts' suggested its another correction (I'm not a chartist, this is simply what has been happening and I appreciate that won't go on in this pattern forever) Winners chart suggested we're well overdue for a bear cycle that hadn't started yet, and I think your chat seems to suggest we're in a decent bear cycle?

[Bjauck]

Looks like Jesse Colombo from Forbes is the latest to bring up the elephant in the room: http://www.forbes.com/sites/jessecol...d-in-disaster/

I know for the past 10-odd years, many have been calling a house price bubble, but for how much longer will NZ's cheap credit inflated house prices survive? Then what will happen to that mountain of debt householders accumulated during period of historically low interest rates? If there is a resultant avalanche, where will the stock market end up?

[MAC]

Looks like Jesse Colombo from Forbes is the latest to bring up the elephant in the room: http://www.forbes.com/sites/jessecol...d-in-disaster/

I know for the past 10-odd years, many have been calling a house price bubble, but for how much longer will NZ's cheap credit inflated house prices survive? Then what will happen to that mountain of debt householders accumulated during period of historically low interest rates? If there is a resultant avalanche, where will the stock market end up?

It's a cyclical matter, some cycles are longer and more volatile than others, but whether it proves to be a soft landing or a pop it will end sometime, IMO it’s got at least 12-18 months to run yet.

One aspect overlooked by Jesse Colombo is the intergenerational and demographical effect of the baby boomers. Remember when they all finished school and the resulting school closure debacle a few years on in the 80’s and early 90’s.

The wealthiest generation in human history are just about to start selling down those 3, 4 and 5 bedroom suburban homes and go looking for more suitable retirement dwellings and/or aged care facilities when the time comes.

Not all of the cash raised from selling ones previously family home finds its way back into the property sector, some goes to retirement savings and living expenses, a nice overseas trip, perhaps some will even leave the kids a sports car.

Baby boomers are now aged 54 through 69, tick tock ………………..