This looks like the end of the bear market...

Riz

Experienced member
1,266 5
I think that's it, it's time to put the bear hat on the bottom of the wardrobe and keep the bull one handy...

No more sell on the rallies, it's time to buy on the dips...

Having said this I am not suggesting big rallies are imminent, but we're going to oscillate for a while firming the bottom based recently even more and forming higher highs and higher lows from here on...

The risk to get fingers burnt is now in going blindly short not long...

Investors will start to move from defensives to cylicals first...

As for the Techs they will probably carry on with bottom basing through the summer and start rallying (those who manage) in autumn...

Those from CI BB will remember me starting the TMT crash discussion last October when most people still putting their money in techs...

Now I see the end of bottom basing and think it's time we take proper positions to make the best out of it...not without caution of course as the big rallies haven't started yet, but big crashes have stopped and the resulting oscillations are forming higher highs and lower lows...

So for me as I've been doing since 3rd week of April it is: BUY ON THE DIPS...

Riz
 
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shelman

1
439 1
Although the apparent low came later, Thursday March 22, was the turning point for me. On that day the US plummeted followed by an equally dramatic recovery,scaring the wits out of the shorters.This was probably a result of smart money testing the water. A similar thing happened in '87 which i can only just recall.
I remember posting on someones thread about it being possibly the best opportunity for longer term investing for some time.
Thats why i have been cautiously bullish and trading the same stocks which i consider good long termers...as you say Riz "buy the dips"

Steve
 
Riz,

I broadly agree with your posts though I have some reservations about the rate of change on the DJIA and feel that the telecoms sector is going to weigh down the FT100 for a while.

I believe that many tech stocks will consolidate over the summer though I suspect that the best gains may be elsewhere. The new market will bring new leaders in the small cap and fledgling indices and these are/will breakout make new highs sooner.

I'm moving to a longer term investment stance and will be using my t.a. skills to assist in market timing.

Whatever the market, I'm sure that the techs will provide rich pickings for the short term trader.
 

shelman

1
439 1
I go along with the view that telecoms will be the last to recover, it makes sense with so many competing. There will be lots of mergers or takeovers in this sector in the next few years and then they will establish a solid position in the major indices just like an unchallenged BT once did.
Steve
 

Riz

Experienced member
1,266 5
Thanks Darth, Steve...

I've been writing similar posts for a while, all results of the signals I get out of my research into US markets, I have therefore changed my bear sentiment for quite a while so I don't miss out on the change in the market sentiment in general... I hope other members also seeing the change and taking appropriate positions...

Good Luck to everyone

Riz
 

titus-uk

1
291 5
I'm making hay whilst the sun shines......!

When I got into IQE last week, it was already marked up by its 6%. However, felt that even with commission costs, 215 was a reasonable price - on a rally tends to go up to about 250ish. So today was a good day. This does seem to be a bit of an upleg, but I remain cautious. In a sideways market (as I do not think we will go below prev lows), its all about trading the tops/ bottoms. Once Naz hits 2500, I will be looking to exit quickly if things retrace. Otherwise like I said its win-win, as long as you know the type of game, and its rules (not always the case!)

Good luck, but keep one eye over your shoulder,

Mark
 

shelman

1
439 1
Well done Mark... welcome to the cautious bull club.
As for me, i've just closed most of my longs, the suns shining and i'm going to relax in the garden. Pity the pub aint open.

Steve
 

titus-uk

1
291 5
Well, there you go - IQE - 250ish!

Will be watching carefully. Whilst a resistance break may occur with a strong Naz move, I will be looking to get out quiockly if things don't go to plan.

One of my greatest lessons from my first year is not to trade on a whim. I do not have to be in the market all the time, unless I am watching it. Over the last 2 months, I have made a series of successful trades, but have prob only been in shares for 10% of the time, the rest in cash. Just goes to show how patience rewards, whilst using full conviction when the time is right.

Still cautious, though happy to make hay whilst the sun shines.....complacency and cockiness are the greatest enemies.....

Mark
 

titus-uk

1
291 5
New article from Vince Heaney at FTmarketwatch. He's feeling optimistic now - not sure whether thats good or bad !!!(prev contrarian posts on the press and market direction!)

Just tried to post the link, but keep getting an error. So the article is cut and pasted - as I have credited it to him, and FTMarketwatch.com, I hope it is not breach of copyright!!

LONDON (FTMW) - Okay I admit it, I was looking for a Nasdaq pullback.
Previous commentary after the Fed rate cut last week highlighted the lack of initial follow-through by the Nasdaq [US:COMP] to the positive fundamental news, suggesting that the good news was all priced in.

The chart picture showed a market that had been in a range for four weeks and, despite several attempts, had failed to break decisively above the 2,200 level.

A range trading market will often test both sides of the range before breaking out in one direction or the other.

Having failed to break higher, the market moved lower to test supports. Previous commentary highlighted that moving average support had stemmed the decline. The 10 and 20-day moving averages had been broken, but while the Nasdaq had traded below the 30-day average, it had not closed below it.

At that point I was in favour of the supports giving way and the breakout occurring in a downward direction, especially when the lacklustre response to the Fed rate cut was taken into consideration.

Wait for the signal

The trading principle that has since been firmly illustrated is to always wait for the signal.

Go to the interactive chart for the Nasdaq with 10, 20 and 30-day moving averages, relative strength indicator (RSI) and slow stochastics added. The chart has been expanded to show the last three months' price action for clarity.

Last Wednesday the market opened below the 30-day moving average, on the back of disappointment with the Fed rate cut.

However, disappointment was short-lived with the market turning higher and closing Wednesday's session back above all three moving averages.

The RSI, that had been threatening to break back below the 50 level, rebounded and moved higher. The slow stochastics that had moved into oversold territory, below 20, turned, crossed over, and moved higher.

There was no bearish signal. The market did not close below the 30-day average. The Nasdaq now looked as if the supports had held at the bottom end of the range, but was still range bound. As noted above, range trading markets will often cross the range several times before a decisive breakout is seen.

One side to the other

Having been unable to breach downside supports, the market moved higher to test the top end of that range once more. Monday saw the Nasdaq finally take out the top of the consolidation range.

The market reached the previous high of 2,232, set on May 2, in early trade on Monday and powered through the resistance to finish 106 points, or 4.85 percent higher on the day at 2,305.

A breakout always looks more compelling, when the move is large and closes the day up on its highs. However, this year has seen many false dawns and investors are understandably cautious.

Market playing by the rules

What can really be said about the chart picture at this point? The main observation to make is that the market has done absolutely nothing wrong since the year's lows were posted on April 4.

The market rallied more that 35 percent from the 1,619.58 lows, unfolding in a five-wave sequence reaching 2,202.86 by April 20. Given the sharp nature of the rally the market entered into a protracted correction/consolidation of that advance, which lasted for a month until the May 21 breakout.

From the chart you can see that the correction unfolded in a three-wave pattern between April 20 and May 16. The rise since last Wednesday can be interpreted as the first wave of the next upmove. From an Elliott Wave perspective a five-wave advance that is then corrected by a three-wave pattern is exactly what is to be expected.

The pullback from the April 20 highs was only corrected by 35 percent - short of the first Fibonacci retracement of 38.2 percent. It was partly this fact that led me to look for the third leg of the correction to move deeper. But in the event the moving averages were sufficient to stem the correction and are currently providing a good guide to the Nasdaq's direction.

Where to next?

Elliott Wave counts are notoriously open to alternative interpretations, so let's keep it simple. The market has rallied 35 percent, corrected a little over a third of that move and has now broken higher after holding above its moving average supports.

If the breakout does prove durable it is not unreasonable to expect a further upmove of similar size to April's rally. This would give a market objective above 2,600 on the Nasdaq.

The move will not unfold all in one go, and you should note that the slow stochastics are showing a near-term overbought situation (indicator above 80). But while the market remains above its moving averages any short-term dip is a buying opportunity.

Mark
 
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Riz

Experienced member
1,266 5
There we go...Nasdaq up again rising 7 sessions out of 8, after going up for six straight sessions...the momentum and market sentiment has to be grasped properly..the determining factor seems to be the fact that the US investors are showing continued faith that the market will benefit from the rate cuts and that not owning stocks may be riskier than owning them...

I wouldn't go bearish right after every single nas or dow retracement, even in the most bullish markets the indices don't just go straight up every day, they go up and down, whether the highs and lows are higher or lower is what matters...

So long as this sentiment continues the indices will carry on forming higher highs and higher lows and the Americans will continue to buy on the dips, they simply don't want to miss out on the rising stocks...

As for me I'll keep holding my longs (till I feel I've run them enouhg) and buying on dips till this sentiment changes, ignoring comments of overvaluation, down channels and trying to overcome the fear gradually formed since the Nasdaq started tanking just as I should have tried to overcome the greed fromed by the overyhype of TMTs...

Riz
 

titus-uk

1
291 5
Things kinda quiet at the moment.......

Its a funny time for me, as I have only ever known the "bad times" ie. since last March, so I am learning how to think in a different environment. So, there is a new game I have to learn to play!!

However, psychologically there has been a huge shift in peoples minds. You can see this from all the BB's etc. The downtrend is at an end, as I feel that unless there is a seismic event, we will not see lower lows. The speech by Greenspan last night, where he hinted that he was still being aggressive re. rate cuts, will help to underpin peoples opinions regarding further direction, that the "Fed is on their side".

So Riz, as I've been saying awhile, I agreee the bears are finished in the long term. Rise and fall is the state of play for the midterm. We have seen the lower targets, we are still defining the upper (for the Naz, will it be 2300, 2600? Figures bandied around by people who don't know themselves). What is true is that such a range allows excellent terms to make short term profits. I will also be buying the dips in companies of value, fully aware of price goals, and selling t that level, until we breakout.......

Mark
 

Riz

Experienced member
1,266 5
Well it's still buy on dips, hope everyone here is making the best out of it...once more we get a setback and the US investors considered it as a buying opportunity...

Riz
 
it was also interesting to note that the following indices:

ft350 general retail
ft350 electricity
ft350 engineering and machinery

all made new highs yesterday.

Small cap and fledgling indices are poised at key resistance levels and breaking through.

My claws have turned to hooves and I have an increasing tendency to go moo!.
 

Riz

Experienced member
1,266 5
DOW 11090.74 20.50 +0.19%
DOW Fut 11161.00 3.00 +0.07%

NASDAQ 2264.00 46.27 +2.09%
NASD Fut 2007.00 29.00 +1.46%

S&P 500 1276.96 6.93 +0.55%
S&P Fut 1289.00 4.8 +0.34%

30 YR Bond 5.67 % 0.02 +0.35%
10 YR Bond 5.28 % 0.01 +0.19%

and Intel stands by estimates....

Hope you haven't neglected buying on dips...well I haven't :)

Well good luck for tomorrow

Riz