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Ftse Opinions For The Autumn

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Being talking with a few investors over the weekend and the general opinion is that we are at the early stages of a new bull market. Having sold out most of my portfolio last month, I'm now not sure whether to start buying soon.

The banks, again, seem to be flying. :o

Is this all just QE funny money or are investors really believing in the new bull? :unsure:

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The next couple of months could be interesting, if we get more good short term data we could be at around 5400 by the end of sept.

My thoughts here where inaccurate as I decided to invent where the ftse had started from at the beginning of Aug for some unknown reason :unsure: so I doubt we'll see what I said here which would be 6000 by end of sept. :lol::lol:

There are numerous timebombs waiting to go off, if they start to happen for me the FTSE will start falling.

Bernanke has said the near term outlook is good so I'm not expecting a major change until Q1 2010, although the situation is very unpredictable and something very nasty could happen at any point, but it appears those in charge aren't seeing anything major happening for the rest of the year......

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I think the next few months will be the most boring on record. Nothing of any interest will happen, whatsoever.

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Being talking with a few investors over the weekend and the general opinion is that we are at the early stages of a new bull market. Having sold out most of my portfolio last month, I'm now not sure whether to start buying soon.

The banks, again, seem to be flying. :o

Is this all just QE funny money or are investors really believing in the new bull? :unsure:

Where else can the funny money go?

The whole system is based on blowing bubbles. If they stop blowing bubbles, it's armageddon for the banks(and us). The only question is, what is the next bubble?

It'll be interesting to see what happens when the commodity currencies are so expensive that the countries with weak currencies can't afford to buy anything.

For example, I bet Australian exports to the UK are dropping at present, all that disgusting thick blackcurrant-juice-flavoured Shiraz will disappear from Tescos at the current exchange rate.

Luckily we don't need their iron ore as we don't make anything. :blink:

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Impossible to predict in the short term IMHO because it's being driven by sentiment and low volumes.

As I have said elsewhere I do not think a collapse is on the cards as to have a crash you need to have had a bubble in the first place and the money went into houses not stocks.

I would be very surprised if it finished the year outside of the 4300 - 5300 range.

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The FTSE and indeed all European markets will follow the Dow Jones sheeplike so it is to there we should look for direction.

http://money.cnn.com/2009/08/28/markets/su...ahead/index.htm

September/October are statistically the worst months for the DJ. Some are however arguing that this year will be different as there is a lot of money sitting on the sidelines looking for a home.

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I'm pulling out my "investments" asap. As I've regained most of what I lost in the immediate crash, I'm happy to get out while the goings good.

What concerns me most now is not the level of the FTSE, but the fact that it has lost all connection with the real economy. The value is purely notional, and impossible to predict going by the fundamentals. This isn't investment - it's gambling, pure and simple.

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What concerns me most now is not the level of the FTSE, but the fact that it has lost all connection with the real economy. The value is purely notional, and impossible to predict going by the fundamentals. This isn't investment - it's gambling, pure and simple.

It always has been gambling. Plus ca change!

Actually P/E ratios are currently low (11) compared to the historical average (17). So you could argue that the fundamentals indicate that share prices are currently undervalued.

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It always has been gambling. Plus ca change!

Yeah - but the old trend was that as the market rose the gambles (on average) paid off. As I now expect the trend to be downwards, the gambling element becomes somewhat sharpened.

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I think the next few months will be the most boring on record. Nothing of any interest will happen, whatsoever.

Famous last words....

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Being talking with a few investors over the weekend and the general opinion is that we are at the early stages of a new bull market. Having sold out most of my portfolio last month, I'm now not sure whether to start buying soon.

The banks, again, seem to be flying. :o

Is this all just QE funny money or are investors really believing in the new bull? :unsure:

all investors have to become bullish before the market can crash again. ie once there are no new buyers that is when it will crash. This is why is probably has some way to go before the next huge crash.

Look at the Shanghai exchage for an example of this. It has risen 107% and then dropped 20% in the last month.

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It always has been gambling. Plus ca change!

Actually P/E ratios are currently low (11) compared to the historical average (17). So you could argue that the fundamentals indicate that share prices are currently undervalued.

PE historicaly can go much lower than where we are, coupled with falling E side of the equation stocks IMHO are not a screaming buy yet.

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"Actually P/E ratios are currently low (11) compared to the historical average (17). So you could argue that the fundamentals indicate that share prices are currently undervalued."

I think that a PE of about 11 is historically where things have tended to be in a recession.

Would I be right in thinking that the average PS for the S&P 500 is well above 11?

If it is I reckon the downside risk is preponderant.

Isn't China down 6.75% today?

China's graph looks worrisome.

http://uk.finance.yahoo.com/q/bc?s=000001....&q=l&c=

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Do I read that S&P graph correctly if it says to me the S&P PE is 18?

If it is I don't like it at all.

At that level at this time that looks way overvalued to me and if the S&P heads south no one cares what the earnings in London are.

London's going south too.

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http://www.marketoracle.co.uk/Article12955.html

Great advice from Nadeem Walyat...

The weeks price action on the major indices once more illustrated the dangers of letting emotions influence ones judgment when it comes to trading and investing. Which was never more evident than during the early week correction that once more suckered many bearish commentators into calling an end to the 'bear' market rally, right from the top of the analysts food chain right through to the bottom. Again nothing new was called on to justify FIGHTING against the trend other than references to the 1930's depression era rally! Well Shall I let you into a little secret ?

EVERY BEAR MARKET / MAJOR CORRECTION IN THE STOCK MARKET since the Great Depression HAS BEEN COMPARED TO THE 1930's BEAR MARKET RALLY BUT NEVER ONCE HAS IT REPEATED !

The only way people REALLY learn from their analysis mistakes is by getting burned in their trading account / portfolio balances, nothing else works, analysts and economists living in ivory towers will never learn!

Look, I beat the GREAT CRASH! Yes that still means 1987 ! BUT being naive, and young at the time, I believed in the 1930's DEPRESSION model and the FIFTH of a FIFTH on Elliott Wave which I learned within a short period of reading Asimov's foundation series therefore was primed to believe in elliott wave being a manifestation of psycho-history, What did I know? After all it all seemed highly convincing, so I fought against what had actually made me a fortune during the crash and continued to view each post crash peak as a shorting opportunity for a good year ! Much as the bears are doing so today ! This is 2009 and NOT 1930 ! and the Markets DO NOT REPEAT ! It is ALWAYS DIFFERENT EACH TIME!

If your finding yourself keep shorting this rally then you seriously need reappraise as to why you are fighting against the price by means of the diffusion responsibility onto indicators, fundamentals, theories, historical patterns and such like which is not what you are actually trading !

It is simple, you stick to the direction that increases your account balance! Don't try to THINK to hard about it! It is THINKING that will be your downfall. Where trading is concerned, THINKING is not good, in fact if you THINK too much you may wake up one day some years down the road to wonder, what the hell have I been doing for the past 3 years???? I have learned all these wonderful theories that produce diddly squat when it comes to actually making money!

Here's a tip for if your stuck in a losing streak, SCRAP everything you know and use a coin toss to pick the direction, then focus on the proper application of money management (i.e. targets, stops, stop and reverse, adjusting position sizes etc), and see whether or not you start to make money or not ;). I demonstrated the winning coin toss trading system 5 years ago on in REAL TIME on moneytec.com (Mr 50%) trading the British Pound That yielded a 380 pip NET profit over ONLY 11 trades.

Article continues

Partly agree.........Depends which trend you're following I guess.

His earlier projections didn't quite play out, so he's amended them, which makes sense.

I don't recall him suspending his THINKING though.........and I'm a little suprised by this rant to be honest with you.

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http://www.marketoracle.co.uk/Article12955.html

Great advice from Nadeem Walyat...

Article continues

Sounds like someone who called the end of the credit bubble too early, a bit like some people who STR in 2002 after Stella jumps in property prices.

It all hinges on credit, if they can devise a way to get consumers borrowing again and get credit expanding (even standing still is not sufficient and we are still going backwards) bad things will continue to happen.

He is very right about trading on fundamentals on a micro level but he is very wrong on a macro level with your finacial affairs, there is likely to be a vicious sting in the tails of this unfolding financial crisis.

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http://www.bloomberg.com/apps/news?pid=206...id=aRrVloZqEO.w

Stocks Decline, Trimming S&P 500’s Sixth Straight Monthly Gain

Aug. 31 (Bloomberg) -- Stocks slid worldwide, trimming a sixth straight monthly gain for the Standard & Poor’s 500 Index, as lower metals and oil dragged down commodity shares and banks fell on concern their rally outpaced the prospects for earnings.

China led the global slump as the Shanghai Composite Index tumbled 6.7 percent, the most since June 2008, and entered a bear market. Alcoa Inc., Freeport-McMoRan Copper & Gold Inc. and Exxon Mobil Corp. dropped as copper plunged the most in two months and crude fell below $71 a barrel. Morgan Stanley retreated 3.1 percent after Bank of America Corp. downgraded the shares following an 84 percent surge this year.

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Impossible to predict in the short term IMHO because it's being driven by sentiment and low volumes.

As I have said elsewhere I do not think a collapse is on the cards as to have a crash you need to have had a bubble in the first place and the money went into houses not stocks.

You have simply been looking at the wrong SM.

Try China

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http://www.marketoracle.co.uk/Article12955.html

Great advice from Nadeem Walyat...

The weeks price action on the major indices once more illustrated the dangers of letting emotions influence ones judgment when it comes to trading and investing. Which was never more evident than during the early week correction that once more suckered many bearish commentators into calling an end to the 'bear' market rally, right from the top of the analysts food chain right through to the bottom. Again nothing new was called on to justify FIGHTING against the trend other than references to the 1930's depression era rally! Well Shall I let you into a little secret ?

EVERY BEAR MARKET / MAJOR CORRECTION IN THE STOCK MARKET since the Great Depression HAS BEEN COMPARED TO THE 1930's BEAR MARKET RALLY BUT NEVER ONCE HAS IT REPEATED !

The only way people REALLY learn from their analysis mistakes is by getting burned in their trading account / portfolio balances, nothing else works, analysts and economists living in ivory towers will never learn!

Look, I beat the GREAT CRASH! Yes that still means 1987 ! BUT being naive, and young at the time, I believed in the 1930's DEPRESSION model and the FIFTH of a FIFTH on Elliott Wave which I learned within a short period of reading Asimov's foundation series therefore was primed to believe in elliott wave being a manifestation of psycho-history, What did I know? After all it all seemed highly convincing, so I fought against what had actually made me a fortune during the crash and continued to view each post crash peak as a shorting opportunity for a good year ! Much as the bears are doing so today ! This is 2009 and NOT 1930 ! and the Markets DO NOT REPEAT ! It is ALWAYS DIFFERENT EACH TIME!

If your finding yourself keep shorting this rally then you seriously need reappraise as to why you are fighting against the price by means of the diffusion responsibility onto indicators, fundamentals, theories, historical patterns and such like which is not what you are actually trading !

It is simple, you stick to the direction that increases your account balance! Don't try to THINK to hard about it! It is THINKING that will be your downfall. Where trading is concerned, THINKING is not good, in fact if you THINK too much you may wake up one day some years down the road to wonder, what the hell have I been doing for the past 3 years???? I have learned all these wonderful theories that produce diddly squat when it comes to actually making money!

Here's a tip for if your stuck in a losing streak, SCRAP everything you know and use a coin toss to pick the direction, then focus on the proper application of money management (i.e. targets, stops, stop and reverse, adjusting position sizes etc), and see whether or not you start to make money or not ;). I demonstrated the winning coin toss trading system 5 years ago on in REAL TIME on moneytec.com (Mr 50%) trading the British Pound That yielded a 380 pip NET profit over ONLY 11 trades.

Article continues

In next week article doubtless he will show how you can make a fortune using the Martingale betting system at the Casino. All you need is infinite money courtesy of QE.

Any gambler will tell you that a true even money shot bet like tossing a coin can produce surprisingly long winning or losing runs over a period of time so it is no guide to any strategy. Over the long run you will still only be right 50% of the time

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I think the market will be down in Autumn. Looks like Wall Street is having a bad day today as it's over 99% down to less than 100!! Monday Markets I confidently predict a rapid recovery from this position, but I think the markets will be down during Autumn.

Edited by agmoldham

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Do I read that S&P graph correctly if it says to me the S&P PE is 18?

If it is I don't like it at all.

At that level at this time that looks way overvalued to me and if the S&P heads south no one cares what the earnings in London are.

London's going south too.

http://www.zerohedge.com/article/current-m...rtest-time-ever

Current Market Move Is Third Biggest PE Multiple Expansion Recorded In Shortest Time Ever

Submitted by Tyler Durden on 09/02/2009 22:04 -0500

Some historical observations: while readers may continue scratching their heads over just what the causes may have been for the torrid 5 month rally we have witnessed, two main things distinguish it among the last ten recessions stretching all the way back to 1953:

•While the S&P has increased by 50% to the (to date) peak, it has done so on a -6% decline in actual EPS, implying the rally has been one of PE expansion, 66% to be precise. As the chart below demonstrates this is the third largest recorded PE expansion in history, with only the 72% PE expansion recorded in 1982 and the 78% in 1974 surpassing the current market.

•Yet, what is unique about this market, is that while both 1974 and 1982 achieved their move higher in about a year (11 months for the trough to peak PE move in 1982, 16 for 1974), the S&P has hit its current PE peak a mere 5 months after the trough. This is an unprecedented record in the history of US recessions, and demonstrates just how much of a push influence Obama's stimulus and Bernanke's QE have had on the PE multiple alone, if not on actual EPS.

Another observation is that at a 19.9x PE through the current market peak, the market is almost 3x turns more expensive compared to the historical peak PE average of 17.1x, and was cheaper at the peak than just the recessions of 1961 (22.7x), and 1990 (21.6x). Any claims that the market is cheap at current earnings are outright lies.

At this point hope is exhausted (in the form of the PE multiple having plateaued), and any further gains will all have to come from an actual improvement in earnings. Yet for that to happen, more than just overhead will have to be cut: actual revenues will need to increase. However, with the record amount of slack still in the system, and the under investment in corporate CapEx, the probability of revenue growth at this point (and this EPS growth) is slim to none.

Edited by Confounded

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