Here is how a market cycle looks like.
According to this chart, the current Australian market looks very close to Phase 1 - bottom.
I'd even say they are very much alike in the that period. The current level is very close to the weighted Moving Average for the past 210 days. This means that the theoretical conditions are met for the new bull phase to begin. Of course, this does not have to happen and the prices could keep on falling, as well.
Another indicator would be the length of the current bear market. The average decline lasted 8.6 months and the average recovery took 15.3 months. According to these statistics, the current market decline would fit the bill perfectly. The crisis begun in July 2007 but the market indices pulled back. Some state this was done artificially because of the last quarter result indicators for large investor funds. If we look from November 2007, July 2008 is just about 8.something months away. Should this be a recovery, by April 2009 the index should be back to its old heights. This sounds not quite likely with the fallout of investment banks in the US but then, again, markets always found their way up before.
I wonder whether the current rally, caused by bailout bill, will be the breakthrough one.
According to this chart, the current Australian market looks very close to Phase 1 - bottom.
I'd even say they are very much alike in the that period. The current level is very close to the weighted Moving Average for the past 210 days. This means that the theoretical conditions are met for the new bull phase to begin. Of course, this does not have to happen and the prices could keep on falling, as well.
Another indicator would be the length of the current bear market. The average decline lasted 8.6 months and the average recovery took 15.3 months. According to these statistics, the current market decline would fit the bill perfectly. The crisis begun in July 2007 but the market indices pulled back. Some state this was done artificially because of the last quarter result indicators for large investor funds. If we look from November 2007, July 2008 is just about 8.something months away. Should this be a recovery, by April 2009 the index should be back to its old heights. This sounds not quite likely with the fallout of investment banks in the US but then, again, markets always found their way up before.
I wonder whether the current rally, caused by bailout bill, will be the breakthrough one.
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