I'm cheating with hindsight
..... alokdhir responded to my post on the same day back on the 10th of May..
Originally Posted by Hoop 
Yep and now with hindsight..it is easy to see those warnings turned out to be real.
Right!!!...second wave capitulation in this maturing Bear Market cycle (probably still stage 2 )..when will this latest rout stablise? nobody can predict 100%..
From a chartist perspective the current pattern looks to present a line in the sand somewhere around 4500 (target pricing). This figure has the best odds of a temporary bottoming out and resulting in maybe a Bear Market correction (sucker rally)..that's all just better odds...Need a few rabbits feet, optimistic crystal balls, other lucky charms....."
It's now 67 days later..Let see what's happened since..
A disappointing non sucker flat breather followed by another drop...The Market did see some sort of hope at 4500 but low positive momentum wasn't enough and selling recommenced..Typical bear market cycles are characterised by disappointments. one after another.
OK the market continued to drop some more and bottomed for the time being at a sharp 4200..Now its seems to have hit a strong resistance back at that magical 4500 line..The difference between the 4500"s is last time it was a technical target price of 4500 which was a line in the sand which has no support attached to it..This time 4500 is a part of the S&R (
Support &
Resistance) setup.
As we all know (or should know) while a
Bear Market Cycle is operating any rally always fails at either it's first or second resistance levels. Rarely does it break though the second resistance level and if the Bear is hibernating it can suck investors to "back up the truck".
When do we know the bear could be dead?
Dow theory says a new up trend needs the trend line to be confirmed with at least 5 touches (3 higher highs and 2 higher lows) before it can be called an uptrend....At 5 touches or more it could still be bull trap and an extended sucker rally, although the more touches the lesser the chance of a sucker rally and higher chances of a cyclical reversal.
At the moment, the uptrend is unconfirmed so the index is not in a technical up trend and the index is having a problem busting through a very strong resistance level. The 4500 resistance has a conjunction of EMA200 + S&L line + Primary down trend line)..
Bear Market Investing Strategy uses short/medium term trading and says sell at resistance, buy at support (
Rowing Strategy)
This is why most of us (divine beings excluded) can only use predictions. Nobody and no Discipline can predict 100%.
I would assume the NZ50C is still in a Bear Market Cycle (I see no evidence yet of a cycle reversal). In technical theory the index has a high chance of failing to bust through the ~4500 area and if it does break through be careful as there is a higher again chance of failing to bust through 4600.
In saying that the chart below tells us the 4500 strong resistance could be broken which is excellent news. However be careful buying in now...It could be a poor Risk V Reward as the next strong resistance is only +2% away. Beware of positive Media hype.
Originally Posted by Hoop
I'm cheating with hindsight
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