World Indices Roundup 2020

How good does that AMG engine sound. One of the last few great sounding engines remaining. Though the new models have been muffled a little due to new European regulations that kicked in this year.

 

Not sure if I would get a long entry, but being bullish till late 2021, If I do get an entry signal I'd have a final TP target for that trade of around 7300.
ATM it's the sideline waiting for a signal which could also come on the short side.

 

The DJIA’s and S&P500’s new highs tell me that the previous all-time intra-day highs in January 2020 can at worst (i.e. taking a bearish view) only be the end of third waves not fifth waves that would mark the end of a wave structure one degree higher. The latest all-time highs could be the end of fifth waves, only time will tell. It’s a bit like are we there yet. Wave structures can be technically complete, that is they reach the minimum point to be considered complete but they are actually not complete. A worrying sign are the “island gaps” marking the latest highs. This means there are price gaps either side of the candlestick (i.e. price bar) marking the high. Island gaps often occur at reversals.

Out of interest, anyone familiar with WD Gann’s extended and adjusted Financial Timetable would note that 2019 marks high stock prices and 2020 is a panic year. I do not profess to know a significant amount about his work and techniques but with some early application of his techniques I have seen some remarkable outcomes that forecast the exact date of recent major lows in stocks like BDA, CAN, EXL etc. which I just can’t explain.

 

@Piston_Broke In other words, you don't know whether the market is going to continue up, go down or go sideways.

That's fine and I'm not being at all critical. This is the same problem that technical analysts face, like myself applying the EWP, chart patterns can have one or more outcomes, bullish, bearish or sideways.

 

Also without coming across the wrong way. If the charts can show you multiple outcomes such as you said above bullish , bearish or sideways then are they really telling you anything at all?

 

I have no problem with being critical and neither should you. Pretend it's just peer review.

If you are into the Gann stuff then it's simple.
The market gets you in the trade and the market takes you out.

@kitdocotor I made a trade that I called a few weeks in advance.
I traded my prediction and it turned out correct.
If you follower the Gannsters that actually trade, then you would see that the next entry was at 7025 and there was another 100 point in the run up.
These are simple trades and tbh honest it was what seems to me a high probability setup and so I posted it.

The issue I have with Elliott Waves is that they plenty charts with counts and arrows pointing up and down, but never say "I will buy XXX or sell at XXX" in advance.
They are just adapting chart analysis to past events.

As for Gann sheet, well it says "low" in 2021. As for the panic in 2020...we'll see.
I'm not sure I'd pay much attention to that sheet though if I was trading. Seems like throwing darts.

Many methods including Gann is about following a trend.
The detail is then in defining what is a trend up or down.
The trader is pretty much betting that the the chart will show a similar pattern to what it has done in the past.

It's simple but not easy.
The price will either go up, go down or stay the same. It's really a range and not a number.
So how much is up or down and what range would you consider same?

I said i was bullish till late 2021. This based on chart patterns.
I said I'm expecting a run up till about 7300. also based on the chart.
Will I be right? No idea.
I am bullish because based on my opinion the chart is showing an uptrend.

I also use non chart methods. I posted elsewhere that chances of a market crash were slim because everyone seem to expecting it to happen. There are great odds in favour of betting against that. And correct I was. Too easy.
It was the same when everyone was saying the USD was gonna die... I bought all i could, and yes it's on record in various forums.

I'm not here to you trading is easy, it's not and most people lose their money.
There is no one course that can teach you. It goes against what I want to do and I rarely trade these days.
I don't think I'm all that good at it either, except on a few occasions.

 

Till now the coronavirus has not yet impacted the markets. I am surprised as I think the economic affects of this thing is being underestimated by market participants. Looks like we are seeing a wobble in the ASX today.

What impact do you think this virus is going to have on markets and how do you see it playing out?

I will start with my version of how I think this might play out. Over the next weeks / months the figures will start to come from different industries about the financial impact it has and is having on different businesses. Add to that other concerns which are always present. Current example reports are showing Sanders is likely to be the front runner in his party and could go on to be the presidential candidate up against trump. Sanders anti wall st , anti making money rhetoric could also rattle markets.

Add that all together and I could see a 10-20% slide in the next few months. Though I don't expect it to last long. This is because there is no where else right now to put your money and find a decent return. So I expect the money to come back into the market fairly quickly and move it back up again. And this is the same reason that I think the market continues to ignore any bad news generally. What are the other options for all the money slushing around right now other than the stock market.

That's my uneducated guess anyway. Anyone else care to take a guess on how this plays out?

 

Guessing is fun as long as it doesn't affect your investment strategy.

I get paid monthly so I invest every 2 months no matter what, guessing isn't taken into account. But my guess would be the market will keep rising, the world market will never fall below ~2018 levels. The property prices here will be maintained by the government so we won't fall into a recession, no huge market falls here. Coronavirus will have a big impact on tourism and the hospitality industry, but nothing economy-breaking. Sanders will become president, the markets will panic for a bit... but I don't expect a >15% drop, and things will keep moving forward.

 

Agree. No strategy building based on playing a game of " Guess what happens next. "

Though I am going to take another guess and say that the impact is going to be much broader than just tourism and hospitality.

 

Maybe. What's the (ir)rationality behind your guess and what do you think the impact will be?

 

Being involved in business and knowing others who operate businesses outside of the obviously affected industries, the impacts are starting to be felt.
There is a flow on affect in industries that at first glance might not appear directly linked to tourism , hospitality and the education sector that I believe is being underestimated.

Hopefully I am wrong and it’s impacts are brief and narrow.

 

Anecdottally people are reporting major cities in China as ghost towns. That has to have some serious knock on effects to not just our market but globally in the short term.

Fear feeds uncertainty and markets hate uncertainty. If it continues to break containment lines with no explanation i think it can cause a 20% plus correction no problems.

Of course, over a 30 year time horizon it will prob be a blip.

 

Just in case:

 

Put the diapers away and get your board out. Might finally be time to ride that wave we have been waiting for.

 

But that’s what I wear for board shorts when surfing the Elliot waves.

 

Uncertainty and fear may increase. But then if we have central banks come out and say “we’ll do whatever it takes” to see a recovery then it could be a quick turnaround.

Who knows and for long term investors who cares lol

 

Totally agree with what your saying. While I expect a sharp downturn as a result of this virus I also expect a quick recovery due to government intervention and investors having not many other options for there cash.

And as you said in the long term this won’t matter and this is more just as a conversation starter.

For myself I am actually going to put an action plan in writing for what I will do if the market does move down significantly. I see it as a buying opportunity. Being that I don’t have cash surplus right now I need to decide at what point will I use debt to pick up more equities. Figured if I put it in writing now it will be easier to follow through when the panic sets in.

Might make a good post to put in my strategy thread. That way you guys can hold me to it if the market does go pear and I chicken out of buying in. Don’t think I will but haven’t been there before to judge my reaction.

 

watched a bit of Bloomberg today... Axel Weber/UBS are pretty bearish on the outlook in the short term

https://www.bloomberg.com/news/arti...r-says-coronavirus-effects-are-underestimated

 

Go with these, no one will suspect a thing



Then again

 

Both FTSE and DAX are over 3% down tonight. Aus market looks like it’s in for another tough day tomorrow.