| Latest Forum Topics / Trading Techniques |
 Post Reply
|
|
Understanding Bear Markets
|
|
|
Pension
Elite |
29-Aug-2007 07:32
|
|
x 0
x 0 Alert Admin |
10 days from today, the market will decide by itself to move up or down depending on what come out in fed meeting. Trade with care. |
| Useful To Me Not Useful To Me | |
|
elfinchilde
Elite |
29-Aug-2007 07:27
|
|
x 0
x 0 Alert Admin |
that's cos you're in low betas, isn't it? alt pennies. falls are led by the blues, recoveries by them as well. switch play method to survive. pennies are out for 4Q of year. they'll take at least 3-6 mths to recover. the timing of the rate cut (bernanke's hand has been forced, i believe) will determine the low 3 mths from that date. i might opt total contrarian and just play warrants. full cash plays. returns are faster anyway, so one's money doesn't have to be overexposed to risk. keep light, keep liquid. in any case, that the sti will fall today is almost a given in view of the 280 dow fall. i do not think the pennies will fall that much tho, most of them are at baseline already for these few weeks. and BBs are not in them. what investors need to be careful of: the tipping point. ie, a fresh round of forced margin calls, that will flush out even the sBBs. when this happens, that will be the real fall to sub 3000. i have puts still. ;) hope you're doing alright, kind sir. :) |
| Useful To Me Not Useful To Me | |
|
|
|
|
KiLrOy
Master |
28-Aug-2007 22:12
Yells: "I buy only what I can see." |
|
x 0
x 0 Alert Admin |
yes you are right on the dollar weakness. hmmm... your plateauing, mine dont even have much enegry to climb.. haha. no single finger typing but must think so slower then you. |
| Useful To Me Not Useful To Me | |
|
elfinchilde
Elite |
28-Aug-2007 21:52
|
|
x 0
x 0 Alert Admin |
but a consistent -0.xx% means it's dropping overall right? sitting on gains: am quite sure of this. because the day of the big dip, closing bell and consequent days had huge lots buy ups for a lot of the blues. (could be share buybacks too) but that petered out last week. the counters i was tracking: kep corp, semb corp, semb mar, cosco. they're plateauing now. am of an inclination that the shorting's gonna begin soon. yesss....i type fast. told ya already. hey, we got ten fingers, man. i type without looking at keyboard. whaddya do, single finger typing? :P |
| Useful To Me Not Useful To Me | |
|
KiLrOy
Master |
28-Aug-2007 21:48
Yells: "I buy only what I can see." |
|
x 0
x 0 Alert Admin |
chey.. this flow of fund thingy.. u sure they still sitting on gains in Asia or also cutting loses. hehehe. Your qn: the US currency market opens at 0.00% hence -0.xx% will denotes the USD weakening against the YEN. -0.xx% is only applicable for the day's trading session. holy cow... type so fast and furious.. |
| Useful To Me Not Useful To Me | |
|
|
|
|
elfinchilde
Elite |
28-Aug-2007 21:39
|
|
x 0
x 0 Alert Admin |
sigh. oh kilroy, you're a techie, you shd know it better than me...elfie can't sleep....wail. lemme go grab my teddy bear first. sick... ok...back to topic... because global markets are interlinked. because the dow and europe markets have given up all their gains for the year, and the only market sitting on gains is Asia. global markets being interlinked means the flow of funds, which dictates price movements, are linked. it's the fundamental of chaos theory! or in the simplest of psychology: if you're losing big in one area, wouldn't you cash out another area that's on profit, in order to remedy or at least mitigate your loss? it's robbing peter to pay paul. the drivers of the world are the U.S and China. One is falling, the other is mistrusted, and a closed market: ie, at this stage of SCI being 5000 plus, no one is going to believe its further rises but are instead on alert for a fall. ie, only minuses will be accounted for in the global market reaction, not pluses. Hence, "isn't the economy still rosy?"--the answer to that is a question: "whose economy?" STI is not a trend setter; it's a trend follower. It's nothing to do with our economy. It's to do with the flow of funds. btw, i got one stupid qn to ask you: if the quote for US vs yen is -0.xx%, does it mean the dollar is weakening against the yen? |
| Useful To Me Not Useful To Me | |
|
KiLrOy
Master |
28-Aug-2007 21:24
Yells: "I buy only what I can see." |
|
x 0
x 0 Alert Admin |
So why are they pulling out? Isnt the economy still rosy? |
| Useful To Me Not Useful To Me | |
|
elfinchilde
Elite |
28-Aug-2007 20:41
|
|
x 0
x 0 Alert Admin |
aw, c'mon kilroy, no need to be jealous. you're an experienced trader yourself, plus, you have forex! :) anw, just some realisations from my personal limited, recent experience (stress: limited) with this particular instrument: warrants are some of the most fleet-footed instruments in the investment field, since they track the movement of an underlying index or stock. poetically, i like to think of them this way: they're the expectation of an expectation. so hehe, mister kilroy, ya gotta give the little elf more credit for speed than that. ie, from that last 'kilroy, my puts are up!  ' post i did sometime the week before, the elfin picture for last week/week before should more accurately read as:
"kilroy, my puts are up! . kilroy, my calls are up! kilroy, my puts are up! "
:P man, i'm so annoying. haha. on a more serious note tho: sometime last week i posted that the BBs were likely to have ran on the rebound. if anyone's been reading the straits times, back page today, my guess on BB psychology/movement has unfortunately been proven right: foreign funds outflow for last week was triple that of the crazy dip week. Not a good sign at all. >~< ok, elfie's been working too intensely. have been sick. gonna try and puke and then go to sleep. nites. |
| Useful To Me Not Useful To Me | |
|
|
|
|
Manikamaniko.
Master |
28-Aug-2007 09:27
|
|
x 0
x 0 Alert Admin |
Shorting and puts are most 'meaty' when done when the market is at the highs... |
| Useful To Me Not Useful To Me | |
|
KiLrOy
Master |
28-Aug-2007 09:21
Yells: "I buy only what I can see." |
|
x 0
x 0 Alert Admin |
.. you must be making tons with your PUT warrants... *jealous* |
| Useful To Me Not Useful To Me | |
|
elfinchilde
Elite |
28-Aug-2007 09:16
|
|
x 0
x 0 Alert Admin |
yeps kilroy, good post. on lookout for the good blues now, tho not yet. this time for long term. :)' in the meantime: Warrants Are Friends. heehee. |
| Useful To Me Not Useful To Me | |
|
popdod
Member |
27-Aug-2007 22:51
|
|
x 0
x 0 Alert Admin |
Good post at this point of the time. 
|
| Useful To Me Not Useful To Me | |
|
|
|
|
KiLrOy
Master |
27-Aug-2007 22:34
Yells: "I buy only what I can see." |
|
x 1
x 0 Alert Admin |
What they are, how they work, and what they mean for your investments"If you've only begun investing in the past few years, you aren't aware of what a bear market is." Unfortunately, that isn't the case anymore. In the past few months, Wall Street has reeled, stumbled, picked up speed, fallen on its side, and gone in circles. Professional and average investors alike have no idea where the market is headed, but everyone seems to have an opinion.
What is a bear market and what causes it?By definition, a bear market is when the stock market falls for a prolonged period of time, usually by twenty percent or more. It is the opposite of a bull market. This sharp decline in stock prices is normally due to a decrease in corporate profits, or a correction of overvaluation (i.e., stocks were too expensive and fell to more reasonable levels).
Investors who are scared by these lower earnings or lofty valuations sell their stock, causing the price to drop. This causes other investors to worry about losing the money they've invested, so they sell as well; the vicious cycle begins.
One of the best examples of a prolonged bear market is that of 1970's when stocks went sideways for well over a decade. Experiences such as these are generally what scare would-be investors away from investing. Ironically, this keeps the bear market alive; because no few buyers are purchasing investments, the selling continues. How does a bear market affect my investments?Generally, a bear market will cause the securities you already own to drop in price. The decline in their value may be sudden, or it may be prolonged over the course of time, but the end result is the same: the quoted value of your holdings is lower. This leads to two fundamental principles: 1.) A bear market is only bad if you plan on selling your stock or need your money immediately. 2.) Falling stock prices and depressed markets are the friend of the long-term, value investor. In other words, if you invest with the intent to hold your investments for decades, a bear market is a great opportunity to buy. It always amazes me that the "experts" advocate selling after the market has fallen. The time to sell was before your stocks lost value. If they know everything about your money, why they didn't warn you the crash was coming in the first place? What do I do with my money in a bear market?The first thing you need to do is to look for companies and funds that are going to be fine ten or twenty years down the road. If the market crashed tomorrow and caused Gillette's stock price to fall 30%, people are still going to buy razors. The basics of the business haven't changed. This brings us to our third principle: 3.) You must learn to separate the stock price from the underlying business. They have very little to do with each other over the short-term. When you understand this, you will see falling stock markets like a clearance sale at your favorite furniture store; load up on it while you can, because history has borne out that prices will eventually return to more reasonable levels. |
| Useful To Me Not Useful To Me | |
