Market Bottom?

Ken · 23 January 2008

I had a look a chart back from 1985 and the 1987 crash basically is the only comparison as far big drops chart wise.

The all ords have dropped a bucket load.

Where is the bottom is anyones guess but for those who dont know the All ords in 1987 went back to the previous support level at the start of the 1986 run.

The start of 2005 run was in November and that was around 4800.

So it is possible that we still have one or two big days of carnage, a drop below 4800 level and your looking 4000.

Something just tells me we have not hit bottom, by the way the stocks didn't close on their highs today, and a number of stocks still in free fall closing on lows.

Its not a pretty place to be at the moment.

I think a lot of short sellers got squeezed out though with the bounce but the fall could still continue.

OK2 · 23 January 2008

Re: MARKET BOTTOM

I am a little confused. Market was down 400 pts on Tuesday which equated to 7% or so and was up 200 pts today which equated to 6% or so. Am I missing something in my calculations to get to where we are?

And to add the majority of the shares I observed are still a long way off the Tuesday open and miles off the last fortnights highs.

Any thoughts or do I need to go back to school.

Ken · 23 January 2008

10 percent of $100 is $10

So a stock goes from 100 to 90 its a 10% percent fall.

10 percent of $90 is only $9, so it would be a 10 percent rise to $99.

If a stock wen down 10 percent everyday and then up 10 percent the next day, the share price would go downwards.

Its like when a a stock goes from $1.00 to 25 cents, it has gone down 75%.

But if it goes from 25 cents to 50 cents the next day, it is up 100% yet 50% less than the previous 2 days.

chewy · 23 January 2008

Re: MARKET BOTTOM

OK2 said:
I am a little confused. Market was down 400 pts on Tuesday which equated to 7% or so and was up 200 pts today which equated to 6% or so. Am I missing something in my calculations to get to where we are?

And to add the majority of the shares I observed are still a long way off the Tuesday open and miles off the last fortnights highs.

Any thoughts or do I need to go back to school.

perhaps you need glasses: we went up 223 today which was 4.1% (not 6)

OK2 · 23 January 2008

I get all that but what I dont get is why the average person thinks that the market is back to Mondays levels. A few mum and dad investors that I know were under the impression that they had returned the previous days loss, but their accounts were not showing this.

It is a little bit like going to the Casino. Any winning bet also incorporates the initial outlay, but most people do not distinguish this in the return.

In all reality there was not much to celebrate at todays close, if only the media were reporting with more tangible figures. Then we could see a real fallout.

OK2 · 23 January 2008

I didnt get a chance to check out the figures, just got home and jumped on the computer after hearing 3AW's financial updates throughout the day.

My blind interpretation of the day through the media reports was that all of yesterdays losses were turned around today. I could not visualise what I was hearing with what was actually going on.

This conversation is a great example of how people can be mislead through media reports. Normally I would go through the numbers before commenting, but because I knew I was going to be busy at work these few weeks I went 100% cash a fortnight ago.

The moral of the story is that a hobby investor only pays attention to the markets when their money is in the mix!!!

Awesomandy · 23 January 2008

Ken said:
10 percent of $100 is $10

So a stock goes from 100 to 90 its a 10% percent fall.

10 percent of $90 is only $9, so it would be a 10 percent rise to $99.

If a stock wen down 10 percent everyday and then up 10 percent the next day, the share price would go downwards.

Its like when a a stock goes from $1.00 to 25 cents, it has gone down 75%.

But if it goes from 25 cents to 50 cents the next day, it is up 100% yet 50% less than the previous 2 days.

This reminds me of a trick question...
You hold a stock worth $2575. Then, its value drops by 100%, but it went up by 100% the day after. How much is your stock worth at the end of this day?

Nyden · 23 January 2008

Awesomandy said:
This reminds me of a trick question...
You hold a stock worth $2575. Then, its value drops by 100%, but it went up by 100% the day after. How much is your stock worth at the end of this day?

0 100% loss equates to total bankruptcy.

Let's assume for a fact you mean 99%
& let's simplify this by using a stock worth $100

It drops by 99%, making the stock worth $1
The next day it increases by 100% - a double of current value...which would be $2

numbercruncher · 23 January 2008

Awesomandy said:
This reminds me of a trick question...
You hold a stock worth $2575. Then, its value drops by 100%, but it went up by 100% the day after. How much is your stock worth at the end of this day?

I think the Q is backwards ?

stock worth 2500 goes up 100pc , then down 100pc, alot of people would answer 2500, but it would be zero.

I like trick questions though, fun fun ...

nioka · 23 January 2008

Awesomandy said:
This reminds me of a trick question...
You hold a stock worth $2575. Then, its value drops by 100%, but it went up by 100% the day after. How much is your stock worth at the end of this day?

That's like a chap I know who decided to go into a business. To build up trade he decided to only work on a 15% markup. To promote he decided to advertise a discount business so he marked up 50% then advertised a 35% discount. Buy at $1, markup 50%= $1.50, sell less 35%= 2.5c loss for each dollar traded. He rented a shop from me, he didn't last long.

sideshowbob · 23 January 2008

OK2 said:
My blind interpretation of the day through the media reports was that all of yesterdays losses were turned around today. I could not visualise what I was hearing with what was actually going on.

This conversation is a great example of how people can be mislead through media reports. Normally I would go through the numbers before commenting, but because I knew I was going to be busy at work these few weeks I went 100% cash a fortnight ago.

The moral of the story is that a hobby investor only pays attention to the markets when their money is in the mix!!!

You are right.

The market started well, but pulled back throughout the day. But the media didnt tell you that it was actually falling back (until the 6:00pm news)

Its probably mostly due to their lack of updating news reports. Of course they were quick to update us on bogus allegations about how Heath Ledger might have died. RIP.

They had a report from the ASX in the morning... and they ran with it for the rest of the afternoon.

I got home and saw.... BNB recover less than half of yesterdays loss.
And the all ords not even close to reclaiming the losses.

But I wasnt surprised because DOW never ended in the green last night.

Im so glad I got out of BNB the other week. It has plummeted since.

son of baglimit · 23 January 2008

OK2 said:
My blind interpretation of the day through the media reports was that all of yesterdays losses were turned around today. I could not visualise what I was hearing with what was actually going on.

This conversation is a great example of how people can be mislead through media reports.

from this quote you have answered your own questions.
one day the media is hung up on trying to create a story about some 16yo brat, the next the lead story comes from hollywood, and the next will possibly combine the 2.

and then this same media is trying to provide ''authoritive & concise" financial stories, but as always has no idea, and it talks to who - mums & dads looking at the boards (which dont tell anyone much), and trading house heads who have a vested interest in telling us what they want us to hear.

dont ask radio or TV to educate or inform - that is now gone forever.

we now live in corey/bigbrother/fifteenminutesoffame world.

Seaking · 23 January 2008

Alan Kohler's segment on the ABC news is pretty good. No bull and gives a brief overview of what has occured during the day. Tonight, using an intraday SPI chart, he pointed out that we are still trending down with yesterdays action occuring on a much lower, parallel trend line and todays open action just reverting back to the original trendline..

Snakey · 23 January 2008

chart wise... bottom 4000 settle at 4500 time frame with in two months

cordelia · 24 January 2008

i am glad i am not holding overnight..at least I can sleep well...up, down makes no differencel

chewy · 24 January 2008

Anyone think we may have already hit the bottom now?

The US recession concerns seem already priced in. And it appears it will be minimised by the big rate cuts and the stimulus package. The Bond Insurance issue was the big dark cloud hanging over from subprime - but now there is talk of the Gov stepping in to protect them. Seeing a big rally in the DOW this morning (apparently massive volumes on DOW too) Have we seen the worst now?

Anyone even prepared to say this will now be a correction and the bull run will continue??

I hope so - but too inexperienced (naive even) to know.

korrupt_1 · 24 January 2008

Last night movement of restesting the lows (high 5100's) followed by a strong 300 point rally would be a good sign that the near term bottom has been defined...

*fingers crossed*

Kauri · 26 January 2008

global growth still looks possibly negative with the Baltic Dry Index continuing to fall. The index is now down almost 50% from the highs in November. The index fell another 168 pts today or 2.82% to 5,780. The fall reflects a decline in global shipping demand as economic strength slides around the world.
Cheers
...........Kauri

cordelia · 26 January 2008

what's the point of worrying about percentages. If your down $100 your down $100. I took a good look at xao chart over the last couple of weeks (as everyone else has) and I can't see it going straight back up to where it was in the same way it has been falling. If you look at any of the other big drops in the past there's always been a bit of a recovery before further falls. This bounce is really dramatic but I am not confident enought to put my cash back in yet. In fact I bought some shares yesterday and sold them 2 minutes later. I even made $100. I don't care if I miss the bottom. I would rather invest in a market where there is less uncertainty.

Also if it is such a recovery why are all these people selling their stocks. For every buyer there is a seller.

Julia · 26 January 2008

cordelia said:
Also if it is such a recovery why are all these people selling their stocks. For every buyer there is a seller.

Possibly at least some of the sellers yesterday had bought during the big fall and were taking short term profits.

Market Bottom?

Ken

OK2

Ken

chewy

OK2

OK2

Awesomandy

Nyden

G.E. Money Genie

numbercruncher

Beware of Dropbears

nioka

sideshowbob

son of baglimit

Seaking

Snakey

cordelia

chewy

korrupt_1

Kauri

E/W Learner

cordelia

Julia

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