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Attn Elmo: US Equity Markets 09:18 - Oct 11 with 7667 views

Next intermediate low projected just before the end of the month, with small caps leading down, and likely to bounce first.

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Attn Elmo: US Equity Markets on 15:12 - Oct 11 with 5433 views

Pegojack

Stocks go up, stocks go down. 'Twas ever thus.

The smart people buy on 'next intermediate lows', but it takes balls.

Attn Elmo: US Equity Markets on 15:16 - Oct 11 with 5423 views

Highjack

I love a good intermediate low.

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Attn Elmo: US Equity Markets on 18:13 - Oct 11 with 5369 views

Shaky

Attn Elmo: US Equity Markets on 15:12 - Oct 11 by Pegojack
Stocks go up, stocks go down. 'Twas ever thus. The smart people buy on 'next intermediate lows', but it takes balls.

Or cover their short positions.

What has changed over the past few weeks is that the near 40 year old bull market in US government bonds has now decisively broken down on a chart of yield (actually broken up).

This had supported the extraordinary bull market in stocks, because the crappy interest rates provided by bonds were insufficient to satisfy the appetites of large pension funds that were in effect forced to buy shares.

There are also perverse effects of very low interest rates on - mostly flawed - valuation models that mean world stock markets have been hitting new all time highs in the past few years with unprecedented monetary life support still in place because the real economy has been so weak.

A paradox.

That will have to be resolved at some point in time, and now seems as good as any.

[Post edited 11 Oct 2018 18:19]

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Attn Elmo: US Equity Markets on 18:19 - Oct 11 with 5363 views

Jackfath

Gutted about this. Where should I put all my spare cash now Shaky?

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Attn Elmo: US Equity Markets on 18:21 - Oct 11 with 5357 views

Shaky

Attn Elmo: US Equity Markets on 18:19 - Oct 11 by Jackfath
Gutted about this. Where should I put all my spare cash now Shaky?

Short term deposits or bonds, of no more than 6 months duration.

Possibly euro denominated, but the next few weeks will tell whether the pound is about to take another major lurch down.

[Post edited 11 Oct 2018 18:21]

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Attn Elmo: US Equity Markets on 18:45 - Oct 11 with 5334 views

Shaky

. . .Here's a chart of the Euro/GBP (Pound) exchange rate:

The area at the end with the 2 converging blue lines is what is known as a triangle. Normally this is what is known as a continuation pattern, which means a pause in the underlying trend which is up for the Euro.

Regardless once prices break decisively out of the triangle a fast price move should ensue.

BTW the other investment opportunity you could consider for a flutter is gold stocks, but they look like they have a little further to run down first.

Gold stocks often do very well in falling markets and I made a lot of money speculating in South African and US gold miners in the first half of the naughties.

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Attn Elmo: US Equity Markets on 18:51 - Oct 11 with 5328 views

Jackfath

I was just about to ask if you had a chart of the Euro/GBP (Pound) exchange rate.

Thanks for posting.

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Attn Elmo: US Equity Markets on 19:00 - Oct 11 with 5323 views

Shaky

Attn Elmo: US Equity Markets on 18:51 - Oct 11 by Jackfath
I was just about to ask if you had a chart of the Euro/GBP (Pound) exchange rate. Thanks for posting.

Not sure if you are taking the piss, but here is a longer term chart which uses the old Deutsche Mark prior to the launch of the Euro and goes back to after the breakdown of the Bretton Woods agreement in the early 70s

As you will see, this is also a multi decade sideways consolidation pattern, that will at some point break out.

Any guesses as to the long term trend in the Euro/GBP exchange rate?

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Attn Elmo: US Equity Markets on 19:26 - Oct 11 with 5311 views

Jackfath

Attn Elmo: US Equity Markets on 19:00 - Oct 11 by Shaky

As you will see, this is also a multi decade sideways consolidation pattern, that will at some point break out.

Any guesses as to the long term trend in the Euro/GBP exchange rate?

It looks like it's going to plummet any day now. This is not good news.

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Attn Elmo: US Equity Markets on 19:51 - Oct 11 with 5300 views

Elmo

Tidy thread and charts Shaky

DJI on a mission for sure - a few more high volumed pockets from mid summer to fill below - 25k just filled as we speak and more to follow if its in the mood - 24.5 possibly

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Attn Elmo: US Equity Markets on 20:43 - Oct 11 with 5281 views

Dracan66

Hey Shaky, I watch Vox markets by am certainly not a chartist and I know many investors wouldn’t know what a candle was but as a holder of a few small cap exploration stocks I’m curious to know If the charts highlighted a market correction was on the horizon?
There’s much talk of Trumps trade war with China and the Feds willingness to raise interest rates that’s created such a risk adverse market. The fall on AIM during the last week or so has been quite dramatic........your thoughts?

Attn Elmo: US Equity Markets on 22:46 - Oct 11 with 5242 views

Shaky

Attn Elmo: US Equity Markets on 19:26 - Oct 11 by Jackfath
It looks like it's going to plummet any day now. This is not good news.

If that price chart plunges it means the pound is strengthening against the euro.

That would likely entail relatively positive economic news for Britain such as Brexit having been cancelled. In other words good news in my book.

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Attn Elmo: US Equity Markets on 22:53 - Oct 11 with 5237 views

Shaky

Attn Elmo: US Equity Markets on 20:43 - Oct 11 by Dracan66

I've got to get to bed, and will answer more fully tomorrow, but before I do am I right in assuming you mean Oil & Gas exploration?

Pure exploration or some independent production too? And based/active where?

On the wider picture in my view all the Trump trade war talk is largely noise. The breakdown in the US bond market is a huge deal, however, and appears to be the opening shots in the world falling out of love with US capital markets, with significant long term implications.

And of course Trump's policies could be a contributory factor in that, the stupid fcuking dunce or Russian agent of chaos, whichever turns out to be the more appropriate description.

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Attn Elmo: US Equity Markets on 23:02 - Oct 11 with 5231 views

bonymine

Attn Elmo: US Equity Markets on 22:46 - Oct 11 by Shaky
If that price chart plunges it means the pound is strengthening against the euro. That would likely entail relatively positive economic news for Britain such as Brexit having been cancelled. In other words good news in my book.

Given the highly knowledgeable contributions around the ‘markets’ etc on here from you guys, can anybody offer any thoughts/advice on whether I should consider selling my CETV Pension pot from my DB Scheme ?

I have the maximum 40/60 Pension Pot and as I am currently going through a Divorce I am attracted by the prospect of being able to bequeath my ‘fund’ to my sons if I sell together with the ‘flexibility and control’ when transferring out rather than the Pension Pot ‘dying with me’ should I I elect to remain within the DB Scheme.

Any advice would be greatly appreciated.

Cheers ðŸ‘ðŸ»

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Attn Elmo: US Equity Markets on 23:31 - Oct 11 with 5216 views

longlostjack

Attn Elmo: US Equity Markets on 22:53 - Oct 11 by Shaky

There’s just an enormous amount of “money” floating around which doesn’t know where to go. It’s really that simple.

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Attn Elmo: US Equity Markets on 23:49 - Oct 11 with 5199 views

majorraglan

Attn Elmo: US Equity Markets on 23:02 - Oct 11 by bonymine

I can see where you are coming from re the fund being passed on to your kids, I reckon you need to take professional advice on this because there are some shysters out there who would be more than happy to move your pension for a commission. I know someone who is looking at opting out of his Bank pension for the same reason as you, but they are also offering enhancements to persuade people to exit the scheme so it may be slightly different.

Is your ex wife coming after your pension as part of the Divorce, was albino to a guy in work today and his ex wife took him for £90k after being married for about 7years and they didn’t have any kids.

Attn Elmo: US Equity Market on 00:01 - Oct 12 with 5191 views

bonymine

Attn Elmo: US Equity Markets on 23:49 - Oct 11 by majorraglan

Thanks for that and yes the ‘vulture’ has already circled we had an ‘Actuaries Report’ done last year regarding my pension she is after it big time it cost £2k for the Report and my Divorce costs to date total £32k and rising !!!

I have taken initial professional advice around the ‘mechanics’ of the Pension transfer but lots still to consider ...a life changing decision awaits !!

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Attn Elmo: US Equity Markets on 06:42 - Oct 12 with 5147 views

Dracan66

Yes it’s oil and gas exploration in North Africa and a separate company in Argentina, both currently have small reserves.

Attn Elmo: US Equity Markets on 07:17 - Oct 12 with 5132 views

swanforthemoney

Attn Elmo: US Equity Markets on 06:42 - Oct 12 by Dracan66
Yes it’s oil and gas exploration in North Africa and a separate company in Argentina, both currently have small reserves.

Bit like the Swans when we have the likes of Dyer and Routs on the bench.

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Attn Elmo: US Equity Markets on 08:22 - Oct 12 with 5113 views

swanforthemoney

The recent ‘sell-off’ happened because of the slow formation of a bubble that got pricked by the increasing interest rates in the US.
Over the summer, stocks increased in price incrementally on an almost daily basis for no real reason. It didn’t get reported because each increase was small. Then over a couple of days those increases are reversed and it it reported as a big loss.
I’ve had a couple of big losses over the week on individual small or mid caps such as GBG.L and AVON.L but they are still up on the year.
The price of stocks is impacted by interest rate rises because the discounted forward earnings of stocks decreases when the so called ‘risk free’ rate rises. The US Treasury rate is used as the risk free rate. Expect more fun and games when the Fed raises again. Next one expected in December.
The real unknown in the ‘markets’ is: when will China hit the buffers after years of credit driven expansion ? Big trouble for the financial world when, not if, it happens.

I stand in the North Stand

Attn Elmo: US Equity Markets on 10:02 - Oct 12 with 5091 views

Shaky

Attn Elmo: US Equity Markets on 23:02 - Oct 11 by bonymine

I know virtually nothing about pensions.

That said if you can liquidate without any major negative tax consequences I would do so.

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Attn Elmo: US Equity Markets on 10:46 - Oct 12 with 5073 views

Shaky

Attn Elmo: US Equity Markets on 20:43 - Oct 11 by Dracan66

Yup, charts certainly did suggest that a correction was coming, although depending on what sub discipline of technical analysis you follow they were probably saying different things. Which is one reason so many supposedly serious investors scoff at technical analysis.

But I scoff at them!

To give you a little background I am an expert in the fundamental valuation of companies. Jellybean Benitez tells a story that he went around for many years in the 70s firmly believing he was comfortably the best DJ in world. Until one day he walked into a club where underground legend Walter Gibbons was doing amazing things spinning 3 decks and cutting tracks up on the fly, whereafter Jellybean had to face the fact that this guy was better than him.

However, I have yet to come across the fundamental company valuation equivalent of Walter Gibbons!

So I was working in a firm in the City in the 1990s in corporate finance and they also had an investment management side, and due to my valuation expertise I was asked to join the investment committees for a couple of the investment funds.

For various reasons I started developing relationship with some of the sell side brokers that the funds traded through, and one of them was a predominantly regional broker called Raymond James, which happened to have a technical analyst/market strategist called Ralph Bloch

Ralph was a genuine legend who predicted the 1987 crash, and was an all round brilliant guy to spend a liquid lunch with, not only in terms of the war stories he could tell but also his stunning insights into market action.

He gave me a copy of the bible he used called 'Technical analysis of Stock Trends', but I subsequently researched all manner of different approaches to technical analysis.

One of the best approaches is cycle analysis.

Here is a chart of the Russell 2000 small cap index which as I mentioned above is leading the market down.

The cyan line are equally spaced 60 trading days apart, representing one of the dominant cycles in the US market that averages out at around 13 calender weeks measured from low to low. With the next low due around the turn of the month as I mentioned above.

However, according to the JM Hurst concept of cycle analysis cycles nest within longer cycles, and the lime green lines show the lows at one higher degree of the cycle that is dominant currently measuring around 9 months.

Longer cycles operate too, and the configuration currently suggests we are heading into a bear market. Separately the fundamental backdrop suggests it could be nasty and protracted.

In terms of your E&P stocks I am bearish on oil and am currently looking for a turn down and short entry.

I follow mainly US equity markets so am unable to comment specifically on UK stocks but certainly the wider sector has been underperforming significantly since the middle of '08, and I do think that could be about to turn.

However, that would be more interesting for institutional investors who are in the business of outperforming their peers. It's not much good for private investors to be merely losing less than the market.

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Attn Elmo: US Equity Markets on 10:52 - Oct 12 with 5070 views

Shaky

Attn Elmo: US Equity Markets on 08:22 - Oct 12 by swanforthemoney

As my old mate Ralph Bloch used to say, you can't trade yield.

US bond prices turned lower ages ago:

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Attn Elmo: US Equity Markets on 11:01 - Oct 12 with 5068 views

swanforthemoney

Attn Elmo: US Equity Markets on 23:02 - Oct 11 by bonymine

Generally avoid emotion when dealing with this. However attractive it may be to try and pass it on to kids rather than your Ex, the main reason to build up a pension is to look after yourself in old age. Be cold eyed and calculating and look after yourself. If you have spare income from your pension you can give it the kids whe by the time comes.
I have a DB pension coming up soon but with the new freedoms I could instead take what looks like a big transfer value. I think I’m minded to go for certainty on the basis that I don’t want the admin and worry of being sure my advisor invests my pension pot to produce a decent income into my old age. SImple as that. It’s only an opinion mind, plenty take the view they want the money sooner rather than later and happy to shoulder the risk.

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Attn Elmo: US Equity Markets on 11:25 - Oct 12 with 5059 views

Lord_Bony

Dow down 550 points,looks like a repeat of 2008 coming up soon.

Only this time round the fed has no kitchen sink to throw at it.

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