World Indices Roundup 2020

Share your sentiment, however if your invested in equities for income I would not fiddle with allocation regardless of retirement or not. Even if there is a 40% hit as long as your not reliant on capital the income stream should still be there albeit a bit lighter. This is when cash savings are a perfect supplement to any dividend cut etc. My opinion only, this is how/what I’m doing.

 

https://www.smh.com.au/business/mar...virus-unnerves-investors-20200128-p53v9f.html

Markets set for interesting times, Brexit also

 

I just want to share a quick viewpoint on action in US share markets, particularly after the DJIA's 600 point drop during Friday's trading. The DJIA, S&P500 and others have each reached and now passed very important highs that could well market a turning point in trend. The Dow Jones Transportation Average peaked in 2018 and did not go onto a further all-time high like the DJIA. This is important part of Dow Theory, a Dow non-confirmation, signalling trouble was brewing.

Although, I don't have up-to-date Elliott wave charts (thanks again tradingview.com!) I can say that the recent index highs mark completed wave patterns that are consistent with an important turning point being reached. For those that remember, I talked about expanding triangle patterns in the DJIA and S&P 500. This pattern did not hold and a combination correction is the best corrective pattern fitting the price action from the index highs (end of Intermediate wave (3) an up wave) in January 2018 to September 2019 marking the end of Intermediate wave (4) (a down wave). From September an advance which can be labelled as Intermediate wave (5) has progressed. Measures of investor sentiment have been reaching record levels over the last few months, signalling no fear of a change in trend which is exactly what does happen.

If you review the last 120 years of US stock market data, various markets have made either very significant or moderately significant turns (lows or highs) in years ending in "9", give or take a few weeks, for eleven straight decades. We could be witnessing the twelfth. Also, including and from 1939, 1959, 1979 and 1999 four have occurred about 20 years apart. 2019 (January 2020) would mark the fifth turn in this sequence.

How important is the current situation? The worst possible case is that this might be the start of GFC Mark II. In other words, from an Elliott wave count perspective multiple fifth waves, culminating in more than one of large degree have ended. The best case is that the recent highs are just the ends of first waves of five wave moves (e.g. say Minor wave 1 of Intermediate wave (5) ), so there are four more waves to play out. The latter is more consistent with ideas I have expressed about GFC Mark II not starting until some time around 2024 or later. Either way, my view is that US markets are at the start of at least a large correction.

As for the ASX, I believe the picture is much the same. The ending diagonal pattern did not hold and a triangle is one acceptable way to label the correction that occurred from 30 July 2019 to 2 January 2020. The high of 22 January 2020 hopefully marks the end of a small degree first wave, or it could be the end of a five wave pattern of more significance. I'll try to update my quickly reconstructed chart before I go into hospital on Thursday.

Anyway, I thought I should share this, even without the benefit of current charts. I hope it is of some value and prompts you to be alert.

I do wish I had charts but tradingview.view lost the lot and I have been busy dealing with another tenant exit....

 

@kitdoctor

The power of socionomics also?

 

So are you saying we are on the cusp of the next GFC or are we good till at least 2024?

I have given up trying to work out what the market is doing next. Every time I got excited thinking here comes a great buying opportunity it turns out to be a little dip and back up the market went.

I have stuck to the plan. Put all excess cash back into the market and today for the third month in a row I did my start of month fixed sum buy in.

 

@Big A those are the two possibilities.

I am leaning towards the least worse of the two but that does not mean there won't be nasty share market corrections. As I said these may have already started.

I base this thinking on the worst global economic downturns occur when they commence at or shortly after the peak of the real estate cycle. For example, the 2007-2009 GFC started after the peak of the last real estate cycle (2006 US, 2007 Australia).

I don't believe the real estate cycle has peaked in Australia. I believe that cycle has only just commenced its second half. Phillip Anderson who promotes the concept of the real estate cycle lasting on average 18.6 years believes 2020 to 2021 is the mid cycle pause and the peak will occur around 2026. I actually think his timing is out and we've had the mid cycle pause from late 2017 to mid 2019.

To build to a peak loose credit practices are needed to feed the speculation in property. The banks here in Australia are now starting to loosen up. Our circumstances are a perfect example. Eight IP P&I loans and the CBA and ANZ are courting us to refinance IO with 30 year terms and I'm retired. In the US the Federal Reserve is doing all sorts of things to loosen regulation and lower costs for lenders. In other words, they unwind as much as they can of what was put in place after the last economic crisis.

I see in my OP I said "...that could well market a turning point..." That should be "...that could well mark a turning point..."

 

@Redwing can you just elaborate a little and I'll reply.

 

Big A,the problem with irrational responses is that they can cloud the need for rational ones,just stick too your plan..
Look back too ''Ebola'' late 2014 the media outlook was the same ,as it never pays to let forward looking facts of the unknown unknowns get in the way of a good bad-news story..imho..

 

Actually so far pretty close to expected.

Asx200 Jan 2020 by Piston_Broke posted 4th Feb, 2020 at 2:00 AM

I reckon the top of this cycle will be towards the end 2021 when we will get a significant pull back.
As far as TA is concerned we are in a bull market. I'm not so sure it will be a long one.

Still looking forward to these market commentators talking about actual trading

 

With everything that's going on the world at the moment and re your earlier post on socionomic's, I wandered how that comes into play with the financial markets of late

Not exactly the most enthralling speaker below on the subject

 

Okay let’s recap.

My preferred wave count was that XJO was advancing in a diagonal pattern at Primary degree comprising Intermediate degree waves (1) – (2) – (3) – (4) – (5). A diagonal pattern is one where overlap between the fourth wave and first wave is acceptable. Minor degree waves W and X of (5) were complete and Minor wave Y was underway. W, X, and Y indicate that there are double corrective structures occurring which complicates the analysis of the wave pattern. Minute wave ((a)) of Y had just finished when I presented my weekly chart (shown below) and Minute wave ((b)) was underway.


I now believe that Minute wave ((b)) of Y has finished and Minute wave ((c)) is underway. The diagonal pattern that was discussed in an earlier post did not hold. The chart below shows the possible diagonal and why it failed.



Minute wave ((b)) was a contracting triangle (a) – (b) – (c) – (d) – (e). The triangle is very distorted because Minuette wave (b) was a double zigzag. The chart below shows the triangle.



Minute wave ((c)) should subdivide in to five subwaves (i) – (ii) – (iii) – (iv) – (v). I believe the recent January high represents the end of Minuette wave (i). I don’t believe it is the end of Minute wave ((c)). Am I absolutely 100% sure? No.

When Minute wave ((c)) is finished this would complete Minor wave Y which completes Intermediate wave (5) which completes Primary wave ((1)). The more bullish alternative marked Alt 1 in the first chart is still in play.

 

@Redwing that's a great short video. I encourage everyone to listen to it.

 

Not sure if anyone was watching the US market overnight but the S&P 500 ran up into the biggest one day gain in six months ..Combine a few other small factors and it's looking like a very good day for Australian market's..

 

Yes noticed that. Should be back above 7000 this morning. Considering everything that has happened politically and otherwise over the last 12 months having no real negative affect on the market, I only see things moving up or worse case sideways from here.

 

You're a lot more gung ho than I am in that case.

I'm only prepared to predict the Sun is going to rise tomorrow and only that with a 99.9999% confidence level.

 

Big A--Lets just wait till all the dissembling and dog whistling starts from now in the lead up in the US election campaign as i know who will win Same face Same ''MAN''..Unlike with the media and the sky's falling example as there no adrenalin surge in telling the world it's highly likely the sun will always come up in the morning..
Run Rabbit RUN,top day in the free world and it's raining..

 

I’ve completely banned myself from having any view whatsoever on the future direction of markets. Cash received = cash not needed for living expenses immediately invested. Relatively small amounts invested regularly ASAP as opposed to sitting on a lump sum waiting, waiting, waiting ... makes the decision very easy and stress free. No cash on the sidelines means one can completely forget about what the market is doing. I’m a very slow learner but I’m finally there.

 

In my case it isn't the lump sum I'm waiting for. It's the cash, cash, cash. One impatient dude am I.

And I notice that in conjunction with your post and the pic you seem to have drawn a line in the sand. Nup, I refused to resist.

 

I wouldn't call my comments so much as predications. More just observations of what I see happening which based on last year I would not expect to pan out that way anyway.

I have succumb to the stay the course mantra that was drilled into me over the past 12months from the likes of yourself and the many other wise PC members. And I am thankful for it.
Its much less stressful and consuming than what I spent last year trying to do. So far so good, I have resisted the urge to fiddle with the plan and have just stuck with the fixed buy on the first day of each month.

So thank you guys for having continued hammering the message into me over all of last year.