Whats propping it up?

Rossini said:
Banks are strong?
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Specifically Barclays,HSBC,Lloyds over the last 2mnths relative to the index. RBS is weaker. Banks and miners dragging the index up.

Scan started on 13:14 @ 8-05-2009

FTSE is Bullish/Long at 103.63% sma/ema ratio with 126.75% growth (2 months).
Got BARC.L historic data after 1 attempts. Analysed BARC.L. FTSE: Bullish/Long. STOCK: Bullish/Long. Stronger than FTSE. No reversal. OHLC 280 283.75 264 280. 16 secs.
Got HSBA.L historic data after 1 attempts. Analysed HSBA.L. FTSE: Bullish/Long. STOCK: Bullish/Long. Stronger than FTSE. No reversal. OHLC 561.75 581 556.75 577.75. 71 secs.
Got LLOY.L historic data after 1 attempts. Analysed LLOY.L. FTSE: Bullish/Long. STOCK: Bullish/Long. Stronger than FTSE. Long Reversal. OHLC 101 105 98 101.8. 88 secs.
Got RBS.L historic data after 1 attempts. Analysed RBS.L. FTSE: Bullish/Long. STOCK: Bullish/Long. Stronger than FTSE. No reversal. OHLC 43 47.9 42.5 47.5. 112 secs.
 
Generally speaking resistance get's tested more than once before it fails..imagine the first test is profit taking ,or simple reduction/hedging of exposure even twerps going short ;) ...the dip then attracts buyers even intradayers.... now when the volume is lighter on the retest and even heavier in repulse then you have the odds on your side to be short thereafter...doing it on the first test is a gamble and nothing else
 
Barclays (worlds biggest bank) Consolidated P&L
Profit attributable to minority interests 403m
Profit attributable to equity holders 4,846m

Total profit 5249m

During year of Total shareholders equity 2008 43574m/ total shares 12060m = £3.61 per share


In the 12 months before the sh*t hit the fan barclays shares ranged between 7.8 falling to 4.4.

No matter how much dodgy accounting they do they are going to make a loss unless they shrink their balance sheets by offloading subsidiaries for a profit (is that what they dont to post this 6bn profit?).

This means less equity distributable for investors which means shares overvalued again. I could understand this being the case in a strong sector but until housing/ins get sorted out the banking sector is royally f-ed
 
Nice fundamental analysis.

Whilst banks maybe screwed in the grand scheme of things, they appear to be less screwed than other sectors right now using their relative performance compared to the index, implying that right now, they are comparatively strong.

So whilst the banks are historically weak, they are comparatively strong compared to the index and are presenting a higher probability of speculative success. I think both speculators are capitalising on this as well as investors taking advantage of the historic weakness. So whilst this is going on and they remain historically weak, you won't get a huge correction of gloom, merely one through speculators taking profits, selling at strengh and waiting for weakness to appear before buying into the cycle again. The longer term investors are accumulating happily right now and supporting the uptrend albeit in rather quiet, smart money, unassuming way.
 
This is where our approaches differ then. I don't care about speculation. To me speculation (commercial) is what creates uncertainty and opportunity in the market and nothing more.
I'll look at the fundamentals then check the PA. I prefer to trade based on market action with a little bit of fundamental to help me in my conviction and with both cases I'm being told we're in for a sinker.

Don't forget that bank share prices will have been boosted by the middle classes jumping in when they bottomed up. Chances are the banks kick started with a buy-back. We could be stuck in a £2 to £3 channel for years...
 
Rising to the bait.............

I think you've overcomplicated matters. I reckon that people will carry on buying generally because everyone loves a bargain, especially shares, regardless of whether they're overvalued and the companies have lousy fundamentals.

I'm expecting the Daily Mail to come up with the headline "Recession Over!" in the next couple of weeks, offering subsidised share purchasing with a free Diana mug.

Then the uneducated pile in and it all becomes a self-fulfilling prophecy as confidence rises, etc.
 
I think thats the governments plan. The sectors will tell the real story but I cant be arsed looking lol

Max Middle-Class buying in during a recession (maybe not on all shares but we'll see) does nothing but provide opps for institutions to short. Those banks are going to want to take every penny they can from whoever they can for this years earnings mate. Its gonna be a warzone out there.
 
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My opinion only, but the market always over-reacts. Always. As soon as everyone thinks it is the worst ever recession, and we're all going to be unemployed and fighting over breadcrumbs, that is the time to start buying. Soon everyone will think the market is buillish, and we're in an uptrend. That is the time to start thinking about selling. Some already do think we're at the start of a bull market, but there is not enough optimism all around, so I imagine we have a bit further to go up before turning.
 
Which resistance level? A level is broken or it is not. I'm not sure I understand.

I tend to imagine the main population as a lagging indicator. The real panic didn't arrive in the general consensus until the Dow had dropped probably 2000-3000+ points.

In any case, I use technical analysis. We're in a major downtrend and a minor uptrend. If that uptrend turns to a downtrend soon, that could be pretty powerful. But in the mean time, play the upside and take some money.
 
Many funds have to perform to a preset brief...so in effect they don't even have aview on banks..simply the weight of the banks in the Ftse increases so must they then move to increase the exposure of their fund to that sector in order to reflect the Ftse composition ...what you don't know of course is how much of that exposure is hedged !

Read Crispin Odey who shorted the banks and then bought them back near the bottom..he says blithely that the fund still owns every share of Barclays they bought..now I am sure that is comforting ...BUT note he doesn't say how the funds have that exposure covered ...LOL ..oh no, just jump in and buy because we have not sold ..
 
lol...OK, when you post scroll down and you will see a box marked "additional options" and in that box you can find pandora and something called "Manage attachments" ...the latter is to help you attach charts to your post ..
 
chump said:
lol...OK, when you post scroll down and you will see a box marked "additional options" and in that box you can find pandora and something called "Manage attachments" ...the latter is to help you attach charts to your post ..
Click to expand...

thanks buddy!
 
I like to call this the "fear of missing out" trade... Working in the city, it is clear that most guys running the smart money haven't participated in this crazy rally (the saying "sh#t floats" has never been more true!) - and they feel pretty miserable about it!

Hence what we've seen is people who haven't yet enjoyed the upside, using any pullbacks as a chance to get in and buy beta which is a massive change in psychology to only a few months ago. Even the more traditional/conservative funds have had to get their hands dirty. This is what has helped support the market to the upside.

Fair play to Odey, he saw opportunity when the rest of the world was in a state of irrational selling. However, it is starting to feel like its gone too far the other way, for now at least.

Therefore whilst I do believe this rally is running out of steam and we may see a return to range trading soon (esp' as the FTSE and others reach key resistence levels) I don't expect there to be a major pullback to the levels seen earlier in the year. We're going to have to wait until Q3/Q4 for that, assuming there are no green shoots of course.
 
remember markets always over react. i dont think we are about to rocket back up but i think we have seen the worse, probably trade sideways for the rest of the year if you ask me
 
Genics said:
remember markets always over react. i dont think we are about to rocket back up but i think we have seen the worse, probably trade sideways for the rest of the year if you ask me
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Hilarious. You have a 50% chance of being right but I bet you haven't backed your opinion with money.

"Those who cannot learn from history are doomed to repeat it."
-George Santayana

Great Depression - Wikipedia, the free encyclopedia

Wall Street Crash of 1929 - Wikipedia, the free encyclopedia

"After the crash, the Dow Jones Industrial Average (DJIA) recovered early in 1930, only to reverse and crash again, reaching a low point of the great bear market in 1932. On July 8, 1932 the Dow reached its lowest level of the 20th century and did not return to pre-1929 levels until 23 November 1954"

"Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even."
 
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