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Australia Stock market… where is it heading?

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  • Australia Stock market… where is it heading?

    Not sure if anyone here follows the stock market….but one of the many simple but very powerful techniques for technical trading analysis is using a Trend Line.  Basic idea is, market movements usually move in one direction for a period of time.  This eventually forms a trend, when there are several waves, it can form a Trend Line.

    So as you can see in the attached picture, the Australia 200 cash index at the moment is traveling in a downward trend, and soon enough we’re approaching the trend line as drawn.  Most of the time, when price hits the Trend Line it usually bounces in the opposite direction…  Note: The US market also follows a very similar pattern.

    My point: Although our market has been recovering steady from the big fall, it is once again approaching the Trend Line.  Theoretically, we’re looking for another bounce downwards.  Question is, how big?

    Just a heads up before buying more stocks


  • #2
    Re: Australia Stock market… where is it heading?

    Dont follow as closely as I used to.
    I sold out 3 years ago.

    Never was into trend lines etc.
    I can be a bit over-cautious and miss some good newcomers but overall Ive only ever lost on one stock in over 20 years.

    Thanks for reminding me to see how its going. I need to keep it mind because of my super.

    Comment


    • #3
      Re: Australia Stock market… where is it heading?

      Originally posted by 6A564B505A5B4C59515A3E0 link=1244813439/1#1 date=1244813936
      I need to keep it mind because of my super.
      Personally I think the previous crash is nothing major… once the credit card debts and the CDO markets collapses in the US (way too much leverage).  That will be when it’s too late to pull out the parachute.

      Cash / Fixed interest is safest in time like these I think….

      Comment


      • #4
        Re: Australia Stock market… where is it heading?

        The crash is major - but not for the stock market falls. The weak companies with too much leverage and poor structures are supposed to fail in a downturn.

        The problem has been the lack of available credit. Banks not lending to other banks and the like. Its not a retail problem, but the wholesale debt markets were completely dead for ages. Now they are recovering somewhat, but only because they are backed by government guarantees and government credit ratings.

        There are some types of structures we wont see for a while. The more complex CDOs for one. But your more standard RMBS will have to stay around if the non-bank sector is ever going to be able to compete with the banks in the home loan market. Dont confuse the US abs and cdo markets with our own. Similar structures, but different asset quality, credit enhancements and different laws.

        Plenty of value is still out there (I wouldnt be getting a margin loan to buy into it though ). However, were likely to see a fixed income (bond market) recovery before the stock market picks up I think.

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        • #5
          Re: Australia Stock market… where is it heading?

          Super???? mine has not been *super* for quite a while now.

          Greg

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          • #6
            Re: Australia Stock market… where is it heading?

            I read a funny quote on a stock market forum in relation to trying to pick the market.
            "People trying to pick the bottom will end up with a smelly finger!" ;D

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            • #7
              Re: Australia Stock market… where is it heading?

              Originally posted by 302422223834332436363030510 link=1244813439/2#2 date=1244814666
              Cash / Fixed interest is safest in time like these I think….
              I moved most of mine to cash quite some time ago.

              I worked in the financial industry for 20 years before moving into process auditing.

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              • #8
                Re: Australia Stock market… where is it heading?

                My investments (vanguard index fund) are down 0.4% since I put it in (about March).

                Comment


                • #9
                  Re: Australia Stock market… where is it heading?

                  Originally posted by 6C555F5F535053705D4848593C0 link=1244813439/3#3 date=1244848925
                  The crash is major - but not for the stock market falls.The weak companies with too much leverage and poor structures are supposed to fail in a downturn.
                  YES... but this will affects other partnering businesses and other stakeholders to a certain extent.  (lost of jobs -> driving down demands -> lost of other jobs -> .... )

                  Originally posted by 6C555F5F535053705D4848593C0 link=1244813439/3#3 date=1244848925
                  The problem has been the lack of available credit. Banks not lending to other banks and the like.Its not a retail problem, but the wholesale debt markets were completely dead for ages.Now they are recovering somewhat, but only because they are backed by government guarantees and government credit ratings.
                  This is what pisses me off, the market needs to be operated in a free market model..  let the weak one fail but the government kept intervening .!!$#%$

                  I still believe the CDO/Credit card Debts are what eventually will bring down the house of card, including in Australia (and many other OECD countries) even though I agree with you the asset quality are not the same.

                  I think there is an inverse relationship with the Bond market and the Stock market.... and Bond is usually a leading indicator??

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                  • #10
                    Re: Australia Stock market… where is it heading?

                    Anyone been watching the Ascent of Money series on ABC1 on Thursday nights. Last weeks one was particularly interesting explaining the Enron debacle

                    Comment


                    • #11
                      Re: Australia Stock market… where is it heading?

                      Im a day trader, and my head (and eyes) spin watching moving averages, stochastics, macds, direction movement indexes and a handful of other momentum indicators I use.

                      Theres no doubt markets are over-bought, both on daily and weekly charts, and overdue for a pullback.....before marching upwards again as the monthlies and incomplete inverse head and shoulder patters indicate.

                      Being short-term oriented, I want good volatility and liquidity in stocks.... the longer term trend does not really matter .

                      Comment


                      • #12
                        Re: Australia Stock market… where is it heading?

                        Originally posted by 22283D2A2A253137440 link=1244813439/9#9 date=1244945743
                        Anyone been watching the Ascent of Money series on ABC1 on Thursday nights. Last weeks one was particularly interesting explaining the Enron debacle
                        Yeah Ive watched it - Its an interesting doco.

                        Comment


                        • #13
                          Re: Australia Stock market… where is it heading?

                          SPL.G -

                          That chart looks like it is trending down, rather than a correction.

                          It also looks like it is nearing the end of the fourth wave. Wave 1 clearly has 5 waves in it, wave 3 is commensurate length of wave 1 to be called wave 3 and also has a sub group of 5, while 2 and 4 clearly are A,B,C 3 wave corrections.

                          So I think you are looking for wave 5 before a bigger correction up is seen. How far down? Measure from the expected tangent point with your trend line something equidistant with wave 1 and then work some fibonacci numbers around that to see where the temporary landing will be.

                          Chris

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                          • #14
                            Re: Australia Stock market… where is it heading?

                            Just remember that you have to trade on the right side of the graph, not the left

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                            • #15
                              Re: Australia Stock market… where is it heading?

                              This is my take of the XJO, daily chart with target around 4400, after a minor retrace which appears to be underway now. The yellow 50 day simple moving average may deflect from the 200 day (red)....but as I say, the pullback should not be major before the uptrend is resumed.

                              [img][/img]

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