I WANT A MARKET CRASH

traderx

Active member
I have had enough of this market. It never seems to make up its mind of what it wants to do. Just slowly unwinding, like a rotting disease eating away at indices but never quite making up its mind where it wants to go. This bear market has been hanging around for too long. I would like to see an end to it so I can try some new ideas and strategies. What is the point in going long in this market, the trader would lose his or her shirt. Only shorting will make serious money. I, like many of you have trained and studied techniques for TA, fundamentals, system trading, use of the news stories and other methods but none of this knowledge can effectively be put to use until we return to stable or trending markets. The risks are too great, all the cards are stacked in favour of the MM.

I NOW WANT A MARKET CRASH - IMMEDIATELY, NOW!!!!!!!

This will not be popular with members but I can tell you, I WISH WALL STREET WOULD CRASH, AT LEAST 1000 POINTS OFF THE NAZ AND 1500 OFF THE DOW, LETS SEE A MAJOR SELL OFF.

This is what the markets need to return to some sort of equilibrium. A MASSIVE SHOCK FOR TECHNICAL REASONS. You know, that is what some companies are trying to achieve unilaterally by issuing PWs, down goes the price (CRASH) and the MM is back in business. I strongly believe stocks to be over priced with earnings falling and growth evaporating. Many tech stocks can no longer justify historic P/E ratios and I tell you the market knows this. What incentive is there for investing in this market, what happened to the equity risk premium. I always thought that investors expected to do better from shares than banks. There is little reason to risk funds going long in this market. The MMs are taking the pxxs and they know it. If this continues there will be investors who will never trust the stock market again, EVER. They are killing the goose that lays the golden egg.

That said, there is a lot of money sitting accounts waiting to be invested in this market but no city investor will buy even at silly prices for likes of BLM because they know prices are going lower, lower, lower, lower...............................?

A CRASH would surely stop the rot that has made many traders poor. Not many traders would openly admit to suffering losses but ask yourself, what have you lost in this difficult market? Grinding, griding, grinding away at your hard earned corn. My advice to traders is not to go long. Volatility is increasing with prices jumping about all over the place to put the fear of God into investors. If you do not believe me take a look at intraday charts for BLM, BHM, MONI to name but a few. OK I am completely out of the market. So should any trader unless you are a CFD technician. Please God let us have a swift CRASH then we wait 6 weeks and the market begins to recover. Dream on, this is not forecasted. MORE ROT, THATS WHAT.

OK I do not expect anybody to agree. CRASH YOU B*****D, CRASH. This is the only way to stop the rot, I remember last time Wall Street Crash and it cleared the air and allowed things to stabilise. I have thought long and hard about this scenario, a crash is more likely now than at any time for years. It only needs a trigger and CRASH. Rizgar and other respectable members forecast this bear market in threads going back to October/ November. The picture has now changed for the worst and unless the FED move to cut interest rates before the next meeting there is a real danger of CRASH. This is the most serious bear market in years and the danger signs are there for all to see. BE CAREFUL or the MMs will have your shirt. If anybody still has tech stocks consider STOP LOSS policy. Say 'GOODBYE, YOU ARE THE WEAKEST LINK'. Unless the FED cut rates this week I fear the worst. Be very careful.

Tx
 

Riz

Experienced member
Spot on...

Well said Tx...an all scale crash is certainly much better than rotting away day by day...wouldn't it be better having the current level of the Nasdaq say in October when we first started to discuss a possible TMT crash? I am sure it would...but better for ordinary traders like us is not better for the big brothers...that's what I have learnt in this period...

Remember in one of my Nasdaq threads I was quoting an analyst talking about creative destruction...well that's exactly it, they are destructing it creatively, meaning our part is being destructed while their part being creating...we lose day by day they add up day by day...but they won't keep this going forever, because then we'll have no money left to feed them...so at one stage they will say that's enough and reverse the trend...believe me they know how to do it and when to start it...

I know you're missing a stable trend to put your skills effectively to use, as they can't work in such a market...I am sure that's what most of us feel...

Well such days are also part of the game, as long as we manage to preserve the capital, we can only learn from this doom and gloom...hoping most of us has still got some capital to trade when the trend gets better...

good luck and keep your most useful research going...

rizgar
 

traderx

Active member
Riz

I appreciate your prompt response and constructive comments. Obviously, when I posted the thread I wondered what the responses would be, I knew the risks. I hoped other traders would see the benefit of such a drastic scenario. It does not surprise me that you see the technical benefit of a CRASH because I know you are switched on to the wider picture and I think your points about creative destruction are perfect. SPOT ON MATE. I wished after sending the thread I had chosen the title 'WHY WE NEED A CRASH' which places the thread in a better light. But thanks again Riz for an interesting and valid response.

Tx
 
This is an interesting thread.

From my perspictive the market is all about the smart money versus the public. The rules of the game are that the smart moeny always wins - it buys low and sells high whereas the public do the opposite through ignorance misinformation and disinformation.

We are currently seeing a telecoms sell-off. Maybe the software sector will be next.

This means that the shares are being handed over to the public so that the bottom can be taken out of the market in the future at which point the public will very obligingly hand over their worthless stocks back into the hands of the smart money again.

IMHO there will be much more to come.
We are currently on the 12 month anniversary of the peaks last year and exactly 6 months from the "september tech rally"

I have the 1st September 2001 pencilled in my diary as day to see if I can find good value.

We shall see. 'Til then it is no fun for the bulls.
 

CHARTY

Active member
Traderx, I think we ARE in a trending market, particularly the NAZ. The ADX indicator on the NAZ is at 30.27, on the Dow, 22.69, on he FTSE 31.99. On all these mkts the ADX line is clearly rising. We are in one of the best markets to make money, in my view...
As far as smart money...my (little) experience of the City is that nobody really knows when we are at the bottom..last night events pre/after Oracle are a clear demonstration that market participants can only follow the flock..and this brings us back to the trendiness of this mkt.
 

Burney

Junior member
My Tuppenceworth

Hi all,
Interesting thread-I have to admit to getting a bit p.....d at this market nothing seems to be making any sense and it does increasingly look like some people are having a ball at others expense-I am getting closer and closer to taking all my cash and sitting on the sidelines till something starts to make sense.It does seem the only way to try to make money is in going short or CFD's/Spread bets but again I am extremely wary of who is pulling the strings here. Guess I am in the camp of Traderx in that even a catastrophic decline would at least give the hope that we could start afresh-this death by a thousand ticks is doing my head in-ahh that feels a bit better -keep smiling all.
 

paulperryman

Junior member
Shorting via Spread-betting.

I agree that this seems to be the best way to make money at the moment so I sent off for a brochure. Some snags in the conditions are that if you want a guaranteed stop-loss, they will only offer it on a resticted range of selections and also a clause about "force majeur" events e.g a power cut, during which the spread-bet firm may: Increase your deposit requirements, close any or all of your open bets ( other than a controlled risk bet) at such closing level as they deem to be appropriate(!) , suspend or modify the application of any or all of the terms of the agreement to the extent that the Force Majeur event makes it impossible or impractical for them to comply with the Term or Terms in question or , alter the last time for trading for a particular index; I do not like the sound of this at all....it seems that , once again , in the event of any exceptional occurrance we get done over every time and they can make it up as they go along. This is a pity because it deters genuine traders and restricts shorting to the professionals with mega-bucks only. CFD's are a possibilty only if your normal position-size is at least £10,000 which is beyond the means of many who have not been trading for long. Paul Perryman.
 
I don't want a worldwide market crash,who in their right mind would,the misery and poverty this would bring is not being appreciated here.
What i want is a sustained recovery , then everyone benefits.

Col
 

sefty

Active member
oh what shall we do

I don't trade full time, i would like to in the future but at present do not have to money to do it. This market is very frustrating to many like me who really use this as a hobby ( sometimes a profitable hobby ). So what are we to do.
I suggest very cheap spread betting for example like the following site which offers some bets at a penny a point. That way you can still play in the markets without lossing to much and still practise some TA.
It ain't the best answer but at least you ain't stuck doing nowt.

http://www.finspreads.com

keep cool people. we will survive this adjustment if we keep our heads.
 

Uncle

Established member
No, we DONT WANT A CRASH. The stock market, remember, is to invest in companies. What has happened over recent years, with the advent of day-trading, options and now spread betting, it has been developing into more of a casino. Now you know who the winners are there. My advice, for what it is worth, is trade only shares that have sufficient volatility and very low spreads, and get out immediately it turns against you. If you are dealing with a low cost broker your losses will be minimal, and as night follows day you will survive this bear market. The alternative is keep your money on deposit for better times to come, or get yourself off to the Caribbean and enjoy the sunshine, and sod the stock markets.

Keep smiling folks

John
 
Tx
I just hope it is your frustration which drives you to this wish and not a genuine desire for disaster. A severe correction is necessary every few years otherwise nobody could make money. If a real crash occurred that would be the end of your trading as well as for everyone else...just check how long recovery took after Wall street, in fact it needed a world war before markets started to recover.
Crash =
poverty
No pension funds
currencies in turmoil
banks collapsing
gold quadrupling in price
no salary
war!!!!

and no more BB or chatroom :)

No way will they kill the golden goose.
 
Not for the first time I agree with Uncle.

There is a lot of institutional money waiting outside the market. Perhaps the prudent (sound like Gordon Brown) way is to hold back some money, just in case and look for winners (and there are some) along the lines Uncle John suggests.

Perhaps part of the lesson for many of us (and I include myself) is Patience and sel-discipline.

A least my golf's improving!

regards
Joe
 

traderx

Active member
Thanks to everybody who replied, I have enjoyed all of your viewpoints. I still think a limited sell off would be good for the markets. I obviously would not like to see the sort of CRASH that Shelman refers to. I think you are talking about 1929 mate, slightly before my time. I am talking about 1998 when the market CRASHED on a limited basis then recovered in 6 weeks. This event led us into a strong BULL market after the shake out. The good news is that nothing we can do or say will make the slightest bit of difference to the outcome. My objective in posting was as follows:

1. To stimulate debate (achieved)

2. To alert traders to the dangers that lie ahead even if we do not CRASH there will be more pain. This is a SEVERE bear market. Charty is right, it is trending, TRENDING DOWN.
(achieved)

3. To allow traders to re-consider their trading strategies this weekend. Even is we get a bounce on Wall Street I DO NOT BELIEVE IT.
(communicated, hopefully achieved)

In truth I DO NOT WANT A CRASH, traders and investors, some of whom I regard as my personal friends would suffer a major loss on their long positions and I do not want that. I want you all to make money, lots of it, but I think the game has become much harder and unless you are shorting stocks the chances are you are losing money. My warning is, DO NOT DISCOUNT ANYTHING, I STILL THINK WALL STREET IS SO WEAK THAT A SERIES OF INCIDENTS COULD BE THE CATALYST FOR A TEMPORARY MELTDOWN.

Take care everybody.

Tx
 
I know it's only semantics Tx but a crash is a crash... 98 was a correction. You would'nt believe the number of people who sell long term holdings when the word crash is mentioned exactly what the people we all dislike want.
And it will happen again and again.
Steve
 
Fascinating stuff guys.....

I go back to a previous thread. I expect there to be a short retracement, but things still to go down. If a retracement occurs, I intend to close most, if not all my open positions. Why? I think there will be a major sell-off for two reasons:
1. Confidence is fragile. There will come a time when enough is enough. The "frustration" shown above will make people pull out, sick of watching their investments shrinking. Once a critical mass is achieved, an all out panic will occur - sell-off!
2. Confidence is fragile. The steady erosion of prices means no one knows where the bottom is. Ignore the tech run from Autumn 1999 - many companies are worth less now than before that time - and prices are still falling. People have tried to guess the bottom, and failed. And failed again. So they are sick of guessing now. Why should you enter - MONI, ARM etc, they are cheap, but who knows how much the gradual erosion will bring them down. Therefore a sharp, hard sell-off will hurt, but people will let the dust settle, and call it a "new start". This will not happen with this water torture. So when the people with influence decide enough is enough, they will trigger a temporary collapse, clear the debris, and mobilise their money into stocks at prices bearly (sic) imaginable just 6 months ago...

So I believe that while we won't have a 1920's collapse, a mini-crash is on the cards, allowing this cycle to be broken.

There's my two penny worth,
Mark
 
A chap i worked with retired early, taking severance, and
invested the bulk of his money in various funds etc. Six or so months later he locked himself in his garage, started the car and slowly went to sleep...permanently.
The cause......


Black Monday



Black Monday, October 19, 1987, day on which stock market prices in the United States declined precipitously, accelerating steep losses in stock markets around the world, including London and Tokyo. By the end of the day the Dow-Jones Industrial Average had fallen more than 500 points, representing a loss of more than 22.5 % in the value of its stocks. Economic observers blamed the crash on such factors as lack of international trade leadership by the federal government, underlying weaknesses in the U.S. economy, and computerized trading on Wall Street, which triggered sell orders automatically.

The crash had been preceded by severe declines in the bond market since the spring and a flattening out of the rise in stock market averages. In mid-October the New York Stock Exchange underwent three days of sharply falling Dow-Jones averages before Black Monday's precipitous decline. During the week following Black Monday the crisis eased, and by the end of 1987 the stock market averages were slightly ahead of their totals at the end of 1986.
-------

He sold everything at a massive loss because he did'nt know the difference between a CRASH and a correction; compounded by the scaremongers in the BLOODY newspapers!
 

paulperryman

Junior member
For what it is worth, I think that even in the event-not unlikely now IMHO-that there is another severe correction ( I feel up to 25% possible) there are one or two safe havens for your money other than cash. I have had a Schroder 250 stockpicker fund now for 15 months and it has made me as many % profit i.e. 1% per month; the fund manager has a nose for sniffing out value and I intend to hold it for as long as the U.K. economy remains soundly managed as it is at the moment i.e. no return to inflationary tax cuts and "boom and bust". Many of the companies in which Schroder invest in the 250 fund will be familiar to those of you who like good yields and low p/e...indeed I was checking through your "themestream" list of low p/e co's which I had narrowed down to those which the Investtec site said were buys, and ,when checking out the co. on Hemscott, I found that Schroder had a sustantial stake in a couple of the ones I had refined the list down to even futher, using a very strict-criteria-entry-point of my own. If I remember rightly, AHT was one of them. The point of this ramble, is to demonstrate where there is AND WILL REMAIN safe, reliable value throughout the coming storm. The only other way will be to light on co.s which are expanding through RAPID growth - such as N.I.S.- where a p/e of circa 60 falling to 24 will cause a re-rating. Failing this, I have heard that there's some smart money heading for Thailand which some astute observers think has "bottomed". Paul.
 

RogerM

Established member
Patience guys, patience!

This is my first visit here, and it looks like an excellent forum for discussion. Rather than indulge in an excercise in semantics as to what constitutes a "crash" and what a "correction", the answer must lie in valuation. If ratings are too high, then prices must come down, and a return to a steady uptrend whilst prices are too high is just delaying the inevitable. My market chart is telling me that the FTSE 100 is on it's way to below 5000 based on the diamond that has just broken. This week will be critical as if the support at current levels from October 99 breaks, and I believe it will, then the diamond takes us down to AT LEAST 4928, with support at the 1998 low at 4600 providing the next support level. There needs to be a change in mind set before we reach the bottom. A whole generation of traders have learned to buy the dips, and I believe that they will soon learn to sell the rallies, which will push the FTSE down to below 5000 this year.

Meanwhile there are opportunities selling trading Index Futures and CFDs, and all the time my cash is sitting there not devaluing whilst shares get cheaper for when I buy back in, I believe that I am actually making money. "Standing aside" is in itself "taking a position"!

Nice to join you!
 

traderx

Active member
RogerM

Thank you for your contribution to this debate and first post. Welcome to Trade2Win BB. My controversial post has prompted some even more contoversial replies but I should have known better than to provoke the Members. I agree with your viewpoint that the sell off will continue for some time. The worse case scenario is that described by Titus-UK of a melt down on Wall Street due to of automatic trigger of stop loss and margin calls with brokers selling positons without reference to clients. Then critical mass and the correction is on the cards. UNLESS THE MARKET CHANGES DIRECTION SOON THIS HAS TO BE A POSSIBILITY.

Shelman is uncomfortable with this scenario and he expresses in the most graphic terms what the market has done and will continue to do to some people caught up in the wrong set of circumstances, but realistically where is this market going, DOWN, DOWN, DOWN. The trend is firmly established and nobody but nobody knows the bottom as of now. As Technical Analysts there is absolutely no case for sitting on long positions when you know that one support level after another is being broken. We know the rules for stop loss and money management and there is no excuse for being burned week in week out. IN EFFECT WE MUST BE BUSINESS MINDED AND TAKE THE RIGHT (HARD NOSED) DECISIONS FOR SURVIVAL. I look forward to your next post, please come back to me if you have any further points to raise.

Tx
 
Critical week

I agree with the views expressed - this is a critical week. If there is no retracement, i will take a position of standing aside. Why - well on the top down approach, all levels are looking serious:

the major indices themselves are almost all at at least 52 week lows. So - the choices are short term sideways, up, or down. Any continuation down is very bearish, and as stated by Roger, a any further fall may make falling off the cliff inevitable.
2. Stocks - well, little to add.
3. Sectors. Been looking at this this afternoon. I have some major concerns. Usually smart money moves from sector to sector. Therefore, at any one time, some trend up, some down, and some trade only. I find using price relative to secor MA's gives a good guide when to enter a sector. By my analysis, whilst the techs have fallen, other old economy sectors such as constuction etc have really taken off. (As an aside, how many of us were blinded not to see the likes of Beazer, Barrett Developments etc!) However, several of these sectors are now losing momentum, and are now starting to generate exit signals. This should be the start of other sectors generating buys - but lo and behold, there aren't any! Therefore if sectors that have recently been hammered are not attracting buyers, then the last legs will be kicked away. The way down could be very rapid.

I would be interested in what others think, because I hope this analysis is wrong. I really do.

Mark
 
 
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