NZSX50 - Good News!

[Hoop]

nzx following asx more than any other market , but falls are not as great

Yes The two indexes are back in Sync (sort of) since the reversal point and as you say Bull NZX50 falls aren't as great as the AORDs..

The gap between the two indexes are narrowing towards parity

[Hoop]

Thanks for the chart Hoop. Looks like the NZX's P/E is running a bit low as well, so surely we can't have that far to fall in the long run? Single digits seems a bit extreme for one of the most solid countries of GDP growth at the moment...

Not extreme at all Moosie

This present scenario is the ideal time for a drop in the PE Ratio.... a PE under 10 (remember we are speaking CAPE) is more likely with economic growth than with stagnant growth.. P is forward looking and E is at last reporting.

P is in a downtrend as investors fret over Global events and lose focus on local events.
E is going up due to favourable NZ business/economy cycle.
Sellers outnumber Bargain Hunters
Available money diminishing....Money exiting NZ (NZ is not considered a safe Haven)
Smart money sidelined awaiting recovery

[biker]

Yep, there might be a bull trap coming........or not. I guess they have a 50% chance of being right.

[Hoop]

Hmmmmm, truly. Still watching the 4,300 level with bated breath.

Read an interesting article on Elliot Wave Theory regarding most major markets last night. Appears the FTSE and DAX are in the worst shape of all and have bigger falls to come. Said there might be a bull trap coming up whereby dip-buyers buy in but can't get out as the trap is too fast and closes too soon to let them exit their positions with a profit, so they just hold. Sinc eour markets are mirroring foreign ones at the moment, what are your thoughts?

EW theory is something I can't grasp...I can see the waves in hindsight ..sometimes ......it just gets too complicated.....sub waves and sub sub waves...meh!!.. ..all you need is sub wave to be misinterpreted and the thing is wrong ..Pure EW like most other predictions into the future fails to produce significant < 85% results...so I leave this discipline to the EW followers. The guru in this area is Robert Prechter and if you followed his advice via his newsletters over the years you wouldn't have much money left to invest. Phaedrus did an analysis of Prechters results ..its somewhere on ST.

EW is an discipline involving investor social behaviour ...Analysing Investor behaviour is my discipline area also, but the closest to EW I get is the boundary touching points within a pattern and also if I need extra confirmation on Support and resistance lines I may use the Fibonacci Retacement...I unlike the EW purists don't rely on one single discipline I use a few disciplines and use them to confirm each other...the same idea as using more than TA indicator to confirm a result...the lining up of the ducks effect

Moosie if you really want to go down the EW track and learn and discuss about it... PM Dumbass he is the expert in this field on ST.

My thoughts on the Market.......Most Market Indexes are broken (TA-wise) at the moment so common sense says keep out... Phaedrus MSI indicator is the best tool to indicate that broken concept.. I'm guessing the MSI is red for most global indexes...see Trackers he has Phaedrus's MSI formulae you will need Metastock software and history data to run it.

Where to from here?............for the NZX50 watch that 4335 support line.... This line orginates from the overheated 2007 market double (5) tops so it has secular meaning and could be of major importance..if the 4335 breaks the bull get sick but its not the end of the bull... The bull often dances with the MA200 line and rallys off it.. Atm the MA200 is at 4200 and rising....However dropping down below MA200 with a bit distance south of the MA200 is showing a bear trait and perhaps a dead bull.

Yep, there might be a bull trap coming........or not. I guess they have a 50% chance of being right.

Sub waves (not the EW kind) are corrections within a correction ....lower highs and lower lows

You always get at least correction (rally) within a correction...these rallies top out around an old support now resistance point
It usually caused by bargain hunters out numbering the sellers.
If the bargain hunters are of "the top up of my investments" type then this type of rally becomes unsustainable when the hunters are satisfied and become 100% "in"

[000831]

China down 3.8% so far, another country crash after Japan.

[gv1]

China down 3.8% so far, another country crash after Japan.

I see as a correction rather than a crash.

If you invest in a company you think are doing well, then why should you worry?
This is the biggest mistake people make, sell up at a huge loss and say its a market crash. That's when big boys make money from little guys.
If its a good, reputable co and you haven't borrrowed money to buy shares(you should never borrow to fund shares), don't sell them.

[troyvdh]

dear gv...never a truer (?) word said....as I have said in the past some folks investment horizon is quite frankly a reflection of how many folk view success....a quick buck made ..an enormous feeling of self satisfaction whilst living in their 300 square meter mansion thinking that they "have finally arrived"....I could go on ....cheers

[Lease]

Meh. The 4% dip has been clawed back.

http://www.bloomberg.com/quote/SHCOMP:IND

Hope you didn't sell into the panic 000831

I don't think 000831 would sell anything but buy. As far as I know, he is a sophisticated share market player.

[Hoop]

I see as a correction rather than a crash.

If you invest in a company you think are doing well, then why should you worry?
This is the biggest mistake people make, sell up at a huge loss and say its a market crash. That's when big boys make money from little guys.
If its a good, reputable co and you haven't borrowed money to buy shares(you should never borrow to fund shares), don't sell them.

Might look good from a NZ market perspective as we have had a 4.25 years of good times (bull market cycle) ...but the poor buggers over in China have endured a 3 year bear market cycle (twice as long as the average bear) and seeing their index drop from 3550 to 1950..Remember it reached 6000 in Mid 2007...The Shanghai bear supposedly died around Xmas 2012....things were on the mend up until the last week of May and in the next 3 weeks the index has dropped 15% testing the 1950 bear cycle lows again....if it drops some more in the next week or two it will be deemed a crash and a destructive crash it will be as market had an increasing accumulation trend up until 3 week ago....also if it drops any more the 6 month old Bull will have prematurely died and the market will be back enduring the lower highs and lower lows bear market cycle....Soul destroying stuff

Put NZX50 into Shanghai perspective the NZX50 index would be 2600 not the present 4400. Think the price of your favourite share (what you bought it for?) then divide it by 2 and imagine it going down in the past 4 years to this price with no end to future drops in sight...much higher dividend yield now?..yeah for the investors who got out and buying back in now ...the "buy and hold" investors dividend yield stays the same as you paid for the share.

[MAC]

Seems Chinese regulators are willing to step in and avoid large defaults by local governments.

European markets just jumped on the news. Should motivate both the S&P500 and NZ50 to bounce from where they are at also, both sitting smack on 2007 support levels.

Let’s hope for a bit of relief in the market tomorrow, possibly some signs of the correction bottoming also ?.