How high can this dead cat bounce?

K

kum yin lau

Hi all, can someone answer this question?

How high can the AllOrds go before it retraces? Can someone take a look at the charts please?

I know buy & hold for the long term. But it's always been my policy to attach a time tag to shares. If in 3 weeks, if they go up 15-20%, I sell. 25%, I laugh.

KY
 
Hi KY.
More the point, could this be the beginning of the end?.....of the bearmarket.
The All Ords has been on downward spiral for 16 months. From my viewpoint, the downtrend is losing momentum. Perhaps confidence is returning. Whilst it is still early days (too early for me to re-enter), there are signals a change in momentum may be about to occur. There are money making opportunities out there (view DOM, PES charts) at present but you need to be vigilant. Others appear to be setting up for rises (HVN, STO). As the saying goes, the early bird gets the worm. It's not a matter of picking the bottom, but identifing the uptrend. Short term the signal for me was Friday. Waiting for medium term confirmation before acting. These are my personal thoughts on how i'm dealing with teh current situation and do not constitute advice. As always, do your research and seek professional advice, unless you're like me and reckon you can do better than the professionals.

Project 1080

The project: 10 IPs in 80 mths.
 
Haven't check the veracity myself , but I heared a report in the last couple of days that during the Great Depression there were 6 " bear rallies " of around 20 % .

Todate since the high in Nov -07 we've had one such rally from march 08 to may 08 when the market went from 5000 up to 6000.

The market doesn't normally go one way for too long without medium term retracements at some stage.

Cliff
 
True See Change, hence too early for me to jump in. This is also my theory as to why history always repeats. It's human nature to look at the past when trying to predict the future. One fundamental issue in these circumstances is "confidence". When enough confidence returns, things will pick up. Now is the time to cash up and prepare for when the market does turn. Down the track we may look back and say that this was one of those opportunities that only come around once in a lifetime.

Project 1080
 
I got a buy signal on DOM on my system on 12/12 . But I'm not buying at the moment because of the overall market direction.

PES doesn't excite me .

HVN is still in a long term down trend.

STO chart looks interesting for those who look at patterns , ascending triangle , but from my recollection , if the breakout is to close to the apex of the triangle , it's not a healthy sign for the strength of the breakout ( or so Darry Guppy used to say ). Also triangles are usually used as buy singnal in longer term trends.

No Breakout so far , so probably a fizzle . Could buy with a close stop , but personally I wouldn't.

Cliff
 
i see a sucker rally to be sold down later. a solid rally will provide support for the sell off, but f the bears come home to roost will provide resistance on the way up.

we're nowhere near fib levels, so i call sucker rally.

bottom feeding isn't my expertise or investing strategy.

my bear put spreads are doing wonderfully at present.
 
i got caught on the last bounce - shares value dropped by 2/3rds (now back up to 1/2 what i paid) and i'm kicking myself. i'm still holding them because they are a good company and will come back but i'm annoyed that i could have bought 3x the number of shares if i'd just waited ... so ... i want to buy more but am really determined not to get sucked in by another bounce.

what are peoples' thoughts? is this a bounce caused by china's announcement of stimulus?

my gut says yes - but last time i didn't listen to you share guys on ss when you were saying "sell" and went out and bought ... so this time i want to listen.

so what are the thoughts? buy now, or wait another month or so to see how things pan?
 
sorry guys i dont get involved in these sought of conversations.
I dont trade share indexes i buy and sell shares in underlying companies.
 
kum yin lau said:
I know buy & hold for the long term. But it's always been my policy to attach a time tag to shares. If in 3 weeks, if they go up 15-20%, I sell. 25%, I laugh.

KY
Click to expand...
If it's long term then you don't have any problems,what i do is have several set-ups,70% long term blue chips just milk or reinvest the div's have the rest in very-very high risk bottom nearly bellyup ASXlisted companiesand track them each day on a large white board,and wait till you think they can't go any lower,then buy them,and sell when they go above 100-300%, over a 3 - 7 day period, BNB250% did that,GMG 55%has done the same,if you do this and only work on 5 trades at a time, still holding
BOQ from 7.67 ,my opinion on the market it's a dummy run,just like the last 3-4 maybe DOW drops another 20%,IMHO..willair..
/this is not advive, i can't even spell my name right/
 
Definitely a dead cat bounce. Why? Because I'm still in the market picking up more of my selected blue chips. I'm never able to pick the bottom. :rolleyes:
 
Hi, looks like a cat, smells like a cat, ergo, must be one.

It sure has some life, though. I'm calling 20% of 3150 so 3780.

I'll be happy to take profit at 3600 if it ever gets there.

I started out thinking 5 year accumulation but hey, if I get a 25-40% profit in one month, I sell.

As far as I can tell, this looks to be the 2nd dead cat.

Time will tell.

KY
 
meh - so take a bull call spread and forget about volatility.

then at 3600 sell out and take a bear put spread.

you soon learn to not call cr@p if your money is riding on it.
 
Hi, at the risk of sounding really naive and stupid [many other people may be in the same category], how the heck does one take out a bull call or a bear put?

I did buy some shares 2 weeks ago and so my money is indeed on the line.

KY
 
a bull call spread is where you are BULLISH.

so stock XYZABC is trading at $12.

you BUY a call at $12 (assuming) hoping it'll get there. it costs you $1.00 being ATM (at the money)

you SELL the $15 call (hoping that's where it gets) it nets you a premium of say 50c for the naked write therefore the spread has cost 50c per share.

one option = 1000 shares therefore this spread costs you $500 per contract.

you are hoping the $12 call touches $15 to create intrinsic value in the stock (which translates across to the option when it gets ITM (in the money)) and hope that the time value hasnt eroded too much to still sell for profit.

at no point in time are we looking to acquire the stock.

this is hypothetical - and basic - and doesn't take in delta / time values.

hope that helps.

cheers.
 
KY,
Still calling it a dead cat bounce?

Me - still early to tell and not brave enough yet to go in without a trend showing. Essentially, it doesn't fit my trading/investing style (Yes Chillia, I read your posts. Very good BTW).

For me, I may possibly look at re-entering around July, if, big if, the AO stays above 3500.

As usual, I keep one eye on shares, one on property. Pehaps that's why i'm crosseyed.

Project 1080

The project 10 IPs in 80 mths.
 
Innuce said:
Simple 1:1 spread trades are NOT vega(volatility neutral).... I think you need to read more :rolleyes:
Click to expand...

really? i had no idea.

i picked up $4900 this morning from my spreads. how much did you make last week?

an option spread is more volatility neutral than similar derivatives involving leverage.
 
Hi Project 1080, yep, I'm still calling it a cat though I'll be happy to be proved wrong.

Still another 100+ points to go & with no certainty of getting there either.

Really tempted to short USD.

But like most people, I'll end up sitting on my thumbs.

KY
 
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