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so this is what a rally in a bear market looks like....

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Not applicable
today is a really interesting day....the bulls are having a really hard time today (despite the index being up).....if you watch the ask in the bid the sellers are very willing to be bought....they line up with big fat orders of 30/50/100 contracts.....this market looks to me like sellers looking for opportunities to get out and not the other way round...in a bull market the buyers do not just evaporate from time to time as we have sen today...massive (sometimes 100 pt) gaps left when they exit the arena.....when its easier to make money going short even if the market is up 300 pts something is not right....
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54 REPLIES 54
Electrox
Super Contributor
So what exactly doe's this mean for the time ahead. Just pure Uncertainty maybe, .. Tomorrow will tell together with how the dow closes.
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Not applicable
Bear market? The way I see it we've just bounced off support on the upward channel (dating way back).
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divz
Super Contributor
Agree super we're not in a bear market. to go into bear territory we have to drop through approx 26000. But as C says the market action or should that be non action is very interesting bears and bulls very wary to make a call.
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Not applicable
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scandal
Super Contributor
sure C this might just be dead cat bounce. Agree that the shorts are getting out at whatever price they can get, but for them to get out there should be buyers. Bottom feeders maybe, also could be those who are cash flush and are looking for 'good' bargains. Notice how in daily sens there is always a director buying!! Me thinks there is some value to be found. (those with some cash to spare CFO going at half NAV etc etc) I am out of resources and long in bank (ABIL) with tight stop loss. OMHO though. Good luck!
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Not applicable
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saash
Super Contributor
C - are you calling this a bear market? Don't we need to close below the low of Jan 25 to confirm a true bear?
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john_1
Super Contributor
Commentary Wall Street suffered another sharp fall overnight, driving the Dow Jones industrial average (11147) to a two-year low. The S&P500 (1245) has now fallen by more than 20 percent from its peak, satisfying the official definition of a bear market for the first time since 2002. There have been eight previous such `bear markets' (or falls of 20% or more) since 1962 and, according to Bloomberg, the S&P500 fell by an average of 33 percent over 382 days during each of the eight retreats. The Dow Jones industrial has experienced 12 previous falls of more than 20% (official `bear markets') since 1962, averaging a decline of 29 percent over 322 days. This average loss of some 30% augurs with our still bearish assessment of both Wall Street and global stock markets - we expect further, significant downside.
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divz
Super Contributor
Saash my 2 cents worth...what some say is that a bear market is 20% off the most recent high close. The most recent high close was on 22 May 08 at 33232.89 so we would enter bear at lower than 26586 not cast in stone but general measure. On this basis i think the dow moved into bear market with last nights close.
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Not applicable
Do we choose to ignore the JSE's recovery from the previous 35% loss?
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BRE
Regular Contributor
What 35% loss are you talking about SI?
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Not applicable
Got it wrong. 20.8% loss, from 11 Oct 2007, to 23 Jan 2008.
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divz
Super Contributor
yes ignore that as we traded up again drop only taken from the next high ie always the most recent high. although with the 20.8% loss to jan we were going into bear territory.
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SimonPB
Valued Contributor
I dunno, all this talk. Bear bull, who cares. Surely traders just trade? An yes techinically in Jan we hit a bear market, and then promptly rushed off to a new high?
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Not applicable
yes quite right ...we just trade...of course taking the line of least resistance....when I said bear market I was using the term tongue in cheek.....the day in question was really more about the market being extremely twitchy than anything else.....I think the previous few days prior had really unsettled some....thats all...
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BRE
Regular Contributor
Actually I do; I woudn't want to be a long term investor in a bear market! Risks are far greater in a market that is falling than in one that is rising.
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SimonPB
Valued Contributor
well bre, two things. I said trader. But more importantly, investor doesn't care if the market is bear or not. It is about individual stocks, and some are doing great while others frot. That's largely my point, overall bear/bull is meaningless. When we hit the high earlier (an hence in a bull market) there were many many stocks that were off over 50% since the highs.
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louisg
Super Contributor
Bre, I consider myself a long term investor and although I agree with you that the risks may be higher in a down market, I believe that there is an enormous amount of opportunity in this market. Banks, retailers, PPC etc are showing great value at these prices. I consider these shares to be cheap and I,m buying as much as I can. When Tito stops increasing rates these stocks should appreciate. Throw in high divdend payouts(tax free) as well. What more could a long term investor ask for? I'M LOVING IT.
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john_1
Super Contributor
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