Article by Aaron Lynch suggest we are changing to a bear market

[#1]

Yahoo finance Australian site suggests bear market: http://au.pfinance.yahoo.com/b/aaronlynch/166/bull-or-bear/ says: Changing from bull to bear But all of you will be pleased to know that Gann was a practical man and reduced many of these concepts to a number of rules that are fairly easy to apply. One of these was that a market, in order to change from a bull market to a bear market, must first break its last low. Let's illustrate this with a chart. We will look at the futures contract based on the ASX200 Index, which is known as the Share Price Index or SPI. You can see from this chart that the last lows were recorded in November and February, but that both of these lows were broken over the last couple of weeks. This would be the first indication that we are seeing a change of trend in the stock market. The next thing you would do is to look at the size of the falls from October to November, and from January to February. Again, you can see quite clearly from the chart that the April to May falls have been greater than the previous ones. Indeed, they have been the greatest at any time since the major low of March 2009.

[#2]

Why is it so important to call the market? Does it really matter if trading the trend is the only rule? For me its about fundamentals of individual companies & a medium term global trade outlook that is far from positive (slow sluggish trade that is governed by debt clean outs). I am just wondering why the Traders spend so much time deciding whether its a bull or a bear - In my herd of Nguni's I can see which is my bull yet it makes no difference to the colouring of the offspring...

[Torres]

Couldn't agree more with you Bru. I firmly believe in studying the fundamentals of the company and making your investment decision on that basis. Technicals has its merits but by and large reduces trading to gambling!

[GarethJ]

Why would you choose to be on the wrong side of a Bear market, no matter how good the fundamentals? OML provides a good example - anyone who bought OML at R17 Feb 08 thinking they had just bagged the Fundamental bargain of the decade could not have been sleeping well in March 09...

[divz]

Eish!! here goes the the whole tecnicals vs fundamentals debate ....each to his own

[#6]

Great point. Fundamentals need to be integrated with technical's. Enron, Anderson, GM, Lehman bros and countless other big names were fundamental darlings until they disappeared?

[john_1]

what to buy = fundamentals....when to buy = technicals..tis simple!

[Werner_1]

This makes sense! I think one needs to look at what the market is doing before buying, if one expects more downside, dont buy, but only buy fundamentally attractive businesses.

[Werner_1]

I dont think GM or Lehman ever would have qualified in my strategy - maybe they were cheap, that doesnt mean their fundamentals were good - GM has for long been loosing market share to other Asian and European makes around the world, Lehman (especially in hindsight) was totally over leveraged (rival bankers knew this!) and with enough in-depth research one would have figured out that it wasnt a very safe investment - but Citigroup (for example / in my opinion) is a fundamental darling at current levels, their business has turned (thanks to the US Government) and they actually have some very good assets that generates very good revenue (held within the Citicorp entity) that will be the driving force going forward - they will not go bang.

[#10]

John, exactly what I was pointing out. You need both to make a great choices.
You might still be wrong (ala Lehman) but hindsight is always perfect. At the time they were a great institution with a proud century plus history, but today? The great Mr Andrew Carnegie had allot to say about thinking and even he was wrong when he was right.

[#11]

And you love your Grindrod dont you.Well...this week I bought plent at sub R14.50 and am very pleased with that.

[Werner_1]

yip, i love GND... They fundamentally very sound, economy sucks though, but they will be very strong in a few years time when all is ticking well again.

[#13]

short term movement governed by technicals. long term by fundamentals

[kwagga]

If you plan to buy long term, it still doesn't mean that you can buy blindly even if historic fundamentals look good. If you know how to use technicals you could time your purchases a little more careful. I prefer a balance between the two. My cousin asked for recommendations a month ago on new purchases to her current long term portfolio and I suggested she wait a while for more positive market sentiment. So far that was a very good call.

[SimonPB]

no sane person considered OML a bargin at 1700c ..