Is the worst over or is it still to come

[Aaron]

Today could be the beginning of the next leg down. The news reports say Greece could be in a prolonged recession/depression reducing its debt. If the US, UK and other EU countries are in the same boat wouldn't that mean this fall has some way to go and company earnings expectations will need to be revised down. Reading the papers China may be due for a slow down as well. Can India and Brazil etc keep the world moving?
For the future will we have inflation or deflation. High interest rates or low interest rates.
Phaedrus the momentum oscillator in your graph above. I am guessing it says sell. Can you tell me when it says buy again. I need someone to ring a bell at the bottom so i can buy companies again.

[Stranger_Danger]

A bell at the bottom? You realise the sharemarket isn't WINZ, right?

[Aaron]

You mean Work & Income? They are the safety net at the bottom if you get wiped out with bad timing. (I don't fully believe its "time in the market") they are not the bell indicating when the sharemarket has reached the bottom.

See the graph Phaedrus provided further up this thread. Its not the exact bottom or top but its pretty impressive if he bailed out and bought back in at those trigger points.
I would be described as a "Mum & Dad" investor by the media. Pretty unsophiscated and relying on stockbrokers and other experts.

My gut feeling is there is still a long way down to go. In the last crash I bought in on the way down and it was only all the discounted rights issues that I bought into that reduced the size of my losses. I am now waiting on the sidelines until I think we are somewhere near the bottom then my plan is to be a long term investor again.
The problem is that no one knows where the bottom is. Phaedrus doesn't either but he does have an idea when he would buy back in. Although his prediction in another thread re the NZX50 was pretty bold. Have to wait and see how that turns out.

[Aaron]

I would be interested in peoples opinions for the next 12-24 months.

1/ NZX, ASX and S&P 500. Will there be a big crash to test the March 2009 bottom. (From what I read I think markets will drop close the March lows sometime before the end of the year. This is based on governments taxing more and spending less to finally address the debt problem. This will affect economic growth and company profits)

2/ Interest rates are going up (Fast for Greek bonds and SCF debentures). If banks aren't lending then companies will need to issue bonds/debentures and will need to compete for investors improving future yields. (This will also negatively affect shares as bond yields get more attractive and less risk as they take priority over shares if the company craps out)
If I understand things correctly the US will want interest rates low to encourage inflation to inflate some of their debt away.)

3/ Inflation/deflation what is going to happen here (I am obviously picking asset deflation for shares and maybe NZ & Aussie houses short term) but if there is tonnes more money in the system won't this automatically cause inflation.

What does the next two years hold and what should I invest in. I think I'm too late for precious metals (gold) and don't know where to go to invest in gold anyway.

[shasta]

I would be interested in peoples opinions for the next 12-24 months.

1/ NZX, ASX and S&P 500. Will there be a big crash to test the March 2009 bottom. (From what I read I think markets will drop close the March lows sometime before the end of the year. This is based on governments taxing more and spending less to finally address the debt problem. This will affect economic growth and company profits)

2/ Interest rates are going up (Fast for Greek bonds and SCF debentures). If banks aren't lending then companies will need to issue bonds/debentures and will need to compete for investors improving future yields. (This will also negatively affect shares as bond yields get more attractive and less risk as they take priority over shares if the company craps out)
If I understand things correctly the US will want interest rates low to encourage inflation to inflate some of their debt away.)

3/ Inflation/deflation what is going to happen here (I am obviously picking asset deflation for shares and maybe NZ & Aussie houses short term) but if there is tonnes more money in the system won't this automatically cause inflation.

What does the next two years hold and what should I invest in. I think I'm too late for precious metals (gold) and don't know where to go to invest in gold anyway.

1. Probably a correction coming, especially if the European debt issues keep getting worse (& if the US keeps printing money), over next 2 years i'm guessing things may go sideways for a while, mini rallies, followed by drop offs, sorry to sit on the fence, but who really knows?

2. NZ is at the bottom of the interest rate/inflation cycle at the moment, as the economy improves the interest rates will rise, which will affect property & lastly wages before inflation rears its ugly head again, those leveraged may get caught at the top of the market, whereas those freehold will gain yet again.

3. Deflation is more likely in the present environment, long term inflation will return, with increased interest rates etc

4. As for investing in precious metals, Gold has had a good run, but all the debt fears in the USA & Europe is only helping surge the move into Gold, with India & China buying Gold, it does seem to be heading higher in the short term, over the next 2 years i do think we will see new highs, but with periods of stability & moving sideways. I still favour Silver & over the next 2 years, other precious metals like Platinum.

Buying Gold, u can do it a few ways

1. Buy the physical stuff, bullion, coins etc from the likes of Perth Mint
2. Buy GOLD:ASX which is equivalent to 1/10th of an oz
3. Buy into Gold ETF's, like Perth Mint ASX:ZAUWBA
4. Buy Gold stocks, producers, near term producers, or explorers (personally i like GDO, TRY, CXC, SLR & ARD for Gold/Silver)

[Aaron]

Everything seems much more optimistic these last couple of days. Maybe the next big leg down won't happen and I should stop reading pessimistic views.
What does anyone else think. Big Crash in China to come. US money creation causing hyperinflation? A long slow recovery with some ups and downs.
I don't know if Phaedrus is still around to advise but based on the chart he provided in this thread I think that Based on my chart in incredible charts (which I don't know how to show here) The 120 day moving average has broken the share price line and the 150 days "momentum daily" has broken through 0 so I should be buying at this stage and then working out an exit strategy if things turn down.

Phaedrus the momentum daily doesn't show the same scale as yours and I have assumed 150days what does the other number next to the 150 represent in your chart.
Sorry still haven't applied myself to study. I bought and read the book you recommended but need to go back over it and really try to understand what I am looking at.

[Phaedrus]

Everything seems much more optimistic these last couple of days.

Of course it does - the market is rising!

Maybe the next big leg down won't happen...

It will happen. We just don't know when, that's all. That's why it is important to monitor the overall situation.

What does anyone else think?

Who cares what anyone else thinks? There will always be pessimists and optimists. What the overall market thinks is all that matters.

I should be buying at this stage and then working out an exit strategy if things turn down.

You should have an exit strategy in place before you buy. It needs to be set before you become emotionally involved with the stock.

What does the other momentum daily number next to the 150 represent in your chart?

It is the value of a moving average applied to the base indicator in order to smooth out minor fluctuations.

Aaron, don't base major decisions on any single indicator - you are looking for a broad consensus here. The following chart should demonstrate that choice of indicator and indicator parameters is not crucial - they are all telling the same story, more or less.

[JBmurc]

The squigley line goes green! Buy people buy. ...

yep till next week-- sell sell the line looks grey ---yes IRD I am a trader I will pay tax

[Aaron]

Nearly two years and still waiting for the worst to come.
My question is I use ASB Securities and have money in my cash management account earning .5% waiting for the big crash that may never come.
I want to be able to quickly buy shares if there is a major fall or if I think markets have overreacted to some news on a company.
Is there any savings account or otherwise where I could park my money at a better rate but have it available at the drop of a hat. Term Deposits aren't much good as I want to have access to the funds quickly. Any ideas.

[peat]

i wouldnt think that its worth sacrificing 3 % just for instant liquidity. Rabo will give you 3.4% for cash and you can access it within a day by transferring it out to your nominated trading bank account. Crashes do happen fast but imo not so fast that you need to have the money in the brokers account losing all the yield.