Welcome to my Stock Market Indices Report. This report is in no way indicative of what individual stocks will do but rather a general ‘crystal ball’ of overall market movements. Individual stocks often do not move in the same direction or the same magnitude as an index. To know what stocks to buy or what to sell you must do your own study and research. Please read the disclaimer below.
Welcome to a bear market (maybe)! Some people have mentioned to me recently that they have found it difficult to make money in the markets over the past few months. Many traders are born (into their ‘new’ trading life) during a bull market. They don’t do the necessary back testing and historical analysis to understand how that market unfolds in difference parts of its cycle. They have only ever experienced making money in rising markets and hence are normally over leveraged, don’t have stop losses in place or lack discipline to get out of losing trades – normally all three together.
If you started trading in stocks or indices during or after 2003 then you probably have little experience in bear markets, Most of the money you have made is by going long in stocks and markets, in fact, in the strongest bull market since 1982-87. You may have found the past few months and certainly the next few are very different trading environments.
The All Ordinaries Index is in week 18 of its 22-week Primary Cycle. As I previously mentioned the peak of the cycle happened at week 11 which means it is a centre translation Primary Cycle. A centre translation cycle is typical at the turning point of a bull market to a bear market.
A critical support level is 6182 points, which is 50% of the rise August 16, 2007 low (5490 points) to the November 1, 2007 high (6873 points). If the market bounces off 6182 it will mean one last push up before a much larger decline. My bias is that the market will move down strongly through the 50% level giving us a good indication of the bear market to follow … that is the “Rudd” decline!
I mentioned a few weeks ago that there is a strong reversal period December 24-28, 2007 that is most likely to be a Primary Cycle or greater crest or trough. It doesn’t look like it is going to be a crest! The actual reversal dates are December 21, 24 and 31 with the December 24 being the highest probability.
If this is the start of the 18-year cycle then the minimum decline is 2147 points down to 4727.
Areas of support for the All Ordinaries are 6242, 6182, 6009, 5836, 5664 and 5491. Points where the All Ordinaries could experience resistance advancing higher are 6469, 6798, 6873, and 6964.
Next report out on Monday, December 24.
Welcome to a bear market (maybe)! Some people have mentioned to me recently that they have found it difficult to make money in the markets over the past few months. Many traders are born (into their ‘new’ trading life) during a bull market. They don’t do the necessary back testing and historical analysis to understand how that market unfolds in difference parts of its cycle. They have only ever experienced making money in rising markets and hence are normally over leveraged, don’t have stop losses in place or lack discipline to get out of losing trades – normally all three together.
If you started trading in stocks or indices during or after 2003 then you probably have little experience in bear markets, Most of the money you have made is by going long in stocks and markets, in fact, in the strongest bull market since 1982-87. You may have found the past few months and certainly the next few are very different trading environments.
The All Ordinaries Index is in week 18 of its 22-week Primary Cycle. As I previously mentioned the peak of the cycle happened at week 11 which means it is a centre translation Primary Cycle. A centre translation cycle is typical at the turning point of a bull market to a bear market.
A critical support level is 6182 points, which is 50% of the rise August 16, 2007 low (5490 points) to the November 1, 2007 high (6873 points). If the market bounces off 6182 it will mean one last push up before a much larger decline. My bias is that the market will move down strongly through the 50% level giving us a good indication of the bear market to follow … that is the “Rudd” decline!
I mentioned a few weeks ago that there is a strong reversal period December 24-28, 2007 that is most likely to be a Primary Cycle or greater crest or trough. It doesn’t look like it is going to be a crest! The actual reversal dates are December 21, 24 and 31 with the December 24 being the highest probability.
If this is the start of the 18-year cycle then the minimum decline is 2147 points down to 4727.
Areas of support for the All Ordinaries are 6242, 6182, 6009, 5836, 5664 and 5491. Points where the All Ordinaries could experience resistance advancing higher are 6469, 6798, 6873, and 6964.
Next report out on Monday, December 24.
Yours in abundance,
David Schirmer
P.S. Check out http://davidschirmer.blogspot.com/ for insights to my Secret Journey.
Terminology
CAC The CAC 40 index is the main benchmark for Euronext Paris (France).
DAX DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.
DOW The Dow Jones Industrial Average (The Dow) is the main stock market index for the New York Stock Exchange (USA).
FTSE The FTSE 100 Index (or just the FTSE, pronounced footsie) is a share index of the 100 most highly capitalised companies listed on the London Stock Exchange. FTSE is an abbreviation of 'Financial Times Stock Exchange'.
Nikkei Nikkei 225 is a stock market index for the Tokyo Stock Exchange (Japan).
S&P The S&P 500 is an index containing the stocks of 500 Large-Cap corporations, most of which are American, from both the NYSE and NASDAQ Stock Exchanges (USA).
XAO The All Ordinaries (colloquially, the "All Ords"; also known as the All Ordinaries Index, AOI) is the main index of shares for the Australian Stock Exchange.
Disclaimer
The training and education services provided by Wealth By Choice Pty Ltd (ACN 112 230 958) involve the supply of factual information about securities and commodity markets only. It should not be assumed that the methods, techniques or indicators presented will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. The training and education services do not involve any recommendations in relation to your personal financial circumstances or investment needs and does not provide any investment advice. Examples presented are for educational purposes only. Any stock, option, warrant, CFD or futures contract mentioned are not a recommendation to buy, sell or hold but merely a study of past performance.
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