History never repeats...
Black Monday
- Thread starter Trendytrader
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Looks like the Aussie market is going to get battered down again...
http://www.theaustralian.news.com.au/story/0,20867,21324119-643,00.html
Another stock shocker expected
Scott Murdoch
March 05, 2007
INVESTORS will be scrambling for safety this morning with another fall on the local share market expected after Wall Street ended a horror week with a 120 point drop on Friday.
Equities are struggling for traction amid the global sell-down in stocks triggered by last Tuesday's plunge on the Shenzhen and Shanghai markets, pushing investors away from volatile investments and into cash and bonds.
The March S&P/ASX 200 futures contracts is pointing to a 1 per cent fall on the local share index, and markets are expected to be volatile from the opening.
The equity market volatility comes amid a big week for economic data and the Reserve Bank of Australia's second monthly board meeting for the year, which is expected to leave interest rates on hold.
In New York on Friday the Dow Jones closed down 120 points on Friday, capping its worst week in four years, amid problems in the sub-prime lending market and concerns about the economic growth outlook.
Goldman Sachs JB Were chairman Terry Campbell told Sky News Sunday Business the bourse could still decline by 5 per cent before "this correction is over".
"So while I'm very optimistic in the medium to longer term I think share prices could come back a bit further," he said.
The March share price index contract on the Sydney Futures Exchange was down 47 points at 5723 in weekend trade.
MFSIM funds management chief investment officer Guy Hutchings said leading indices could open as much as 50 points lower, given the pattern of Wall Street on Friday.
"I believe it is psychology rather than fundamentals that will propel the local market short-term," Mr Hutchings said.
"The unwillingness of investors to buy stocks following the significant falls of recent days is a clear watch point.
"US investors remain concerned that the slump in sub-prime mortgage stocks due to rising defaults of riskier loans may flow on to larger lenders and banks and be a pointer to economic weakness later in 2007.
"Investor nerves were further spooked with a related warning by Warren Buffet that Americans were taking on too much personal debt."
Sally Auld, interest rate specialist at ANZ, said investors were trying to minimise equities volatility by shifting into fixed rate strategies.
"People are saying they don't want risk, and putting their money into something safe," Ms Auld said.
"They have been buying bonds, which is pushing up the price, but the interest rates have fallen."
National accounts figures, due out on Wednesday, are expected to show December quarterly growth up between 0.7 per cent and 0.9 per cent.
The result will be revealed as the Reserve Bank is set to announce that the cash rate will be maintained at 6.25 per cent.
The RBA board meets in Sydney tomorrow, but the market has already priced the chance of a move in monetary policy at zero.
Even the prospect of a tightening by the end of the year has been cut back substantially, especially on the back of the global equities market volatility.
The futures market, on the 90 day bank bill rate, is pricing the chance at just 8 per cent through to December.
http://www.theaustralian.news.com.au/story/0,20867,21324119-643,00.html
Another stock shocker expected
Scott Murdoch
March 05, 2007
INVESTORS will be scrambling for safety this morning with another fall on the local share market expected after Wall Street ended a horror week with a 120 point drop on Friday.
Equities are struggling for traction amid the global sell-down in stocks triggered by last Tuesday's plunge on the Shenzhen and Shanghai markets, pushing investors away from volatile investments and into cash and bonds.
The March S&P/ASX 200 futures contracts is pointing to a 1 per cent fall on the local share index, and markets are expected to be volatile from the opening.
The equity market volatility comes amid a big week for economic data and the Reserve Bank of Australia's second monthly board meeting for the year, which is expected to leave interest rates on hold.
In New York on Friday the Dow Jones closed down 120 points on Friday, capping its worst week in four years, amid problems in the sub-prime lending market and concerns about the economic growth outlook.
Goldman Sachs JB Were chairman Terry Campbell told Sky News Sunday Business the bourse could still decline by 5 per cent before "this correction is over".
"So while I'm very optimistic in the medium to longer term I think share prices could come back a bit further," he said.
The March share price index contract on the Sydney Futures Exchange was down 47 points at 5723 in weekend trade.
MFSIM funds management chief investment officer Guy Hutchings said leading indices could open as much as 50 points lower, given the pattern of Wall Street on Friday.
"I believe it is psychology rather than fundamentals that will propel the local market short-term," Mr Hutchings said.
"The unwillingness of investors to buy stocks following the significant falls of recent days is a clear watch point.
"US investors remain concerned that the slump in sub-prime mortgage stocks due to rising defaults of riskier loans may flow on to larger lenders and banks and be a pointer to economic weakness later in 2007.
"Investor nerves were further spooked with a related warning by Warren Buffet that Americans were taking on too much personal debt."
Sally Auld, interest rate specialist at ANZ, said investors were trying to minimise equities volatility by shifting into fixed rate strategies.
"People are saying they don't want risk, and putting their money into something safe," Ms Auld said.
"They have been buying bonds, which is pushing up the price, but the interest rates have fallen."
National accounts figures, due out on Wednesday, are expected to show December quarterly growth up between 0.7 per cent and 0.9 per cent.
The result will be revealed as the Reserve Bank is set to announce that the cash rate will be maintained at 6.25 per cent.
The RBA board meets in Sydney tomorrow, but the market has already priced the chance of a move in monetary policy at zero.
Even the prospect of a tightening by the end of the year has been cut back substantially, especially on the back of the global equities market volatility.
The futures market, on the 90 day bank bill rate, is pricing the chance at just 8 per cent through to December.
would it even be possible for the market to drop as much as what happened in 87 given that they are slowing down trading when stocks drops a certain amount. On the day this past week when the dow dropped 400 i know they even stopped the trading of several stocks completely, im guessing because they had dropped too much. what would happen if the dow were to keep dropping, would they just keep stopping trading on stocks that are dropping too much?!?
Do you promise to stick around, for a change, no matter what?
Or will you be doing the infamous turtle if your paper trade bull positions get whacked?
I think this is more probable. We're fairly oversold in the short-term. If I learned anything trading over the past 5 or so years is that it's to trust my indicators more than the message boards!
Quote from ByLoSellHi:
Do you promise to stick around, for a change, no matter what?
Or will you be doing the infamous turtle if your paper trade bull positions get whacked?
I been trading long from 2003 as documented right here 1000s of times over 4 years ago....
I am up so much % wise that even a market crash if I was fully margined wouldnt even hurt.....
I am out enjoying the last 4 years fruits of my labor in this beautiful weather of So Cal baby $$$.. while all the perma bears come out over 2 days of selling...lol
good luck to you
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