This time it’s different

Cobra

The weekly chart still shows XAO in an overall uptrend, keeping me in the market as a buyer.  Last weeks correction knocked me out of a couple of positions, but have been making use of the consolidation since then to establish new holdings.

Although the number of stocks showing strong signs has decreased lately, there are still some strength around, eg the consumer staples sector.

Changed market conditions to me means the XAO 50 day MA falls below the 100 day MA, those following Weinstein might keep an eye on the 30 week MA.  Until that time I remain either a buyer, holder or if I'm not sure - a watcher.

Chart Rider

Cobra

There is no doubt that overall market direction is based upon fundamentals, for there exists no other force that can have an affect - including day to day events that investors perceive as affecting fundamental economics in either a positive or negative sense.

The current market price(s) though are set by the perception of future expectations and as such any knowledge regarding future commodity production levels etc would already be factored into the current market.

In my opinion the analysis of fundamentals is just far too complicated to apply to individual stocks, with almost infinite variables and information that at any point in time is already general knowledge in the investment circles.  This makes decisions based upon fundamentals, in my opinion, just too difficult and too self contradictory to be of use for daily buy/sell decisions.

Apart from looking at fundamentals for the big picture (eg. is the uptrending market generally in sync with fundamentals?), I see the only objective approach for day to day decisions as being technical analysis - and not necessarily using hundreds of indicators, but just one or two - while always being alert to the general market conditions.

Technical analysis also allows the reading of price activity under the effect of crowd emotions, which pure fundamental analysis does not.  I think a ballance of the two approaches is the key.

Chart Rider

I guess that's what makes it interesting, and that's what makes the market work. You give 2 people the same data and you'll get 2 different opinions.
My opinions are based on my view that the market is not trending up, in fact taking out special situation stocks like BHP & RIO the 'market has been flat at best, mostly down for a number of weeks now. I just can't see a reason to go long, in fact it would be more of a risk than going short. These 2 stocks (BBG & CCL) came up in a Bullcharts scan of mine, and I've been watching them since.
The only proviso I would give is that the CCL action has been quite strong even through the downturn over the last couple of trading day's. Maybe a takeover???.
If you can see value enough to buy them, well and good.
Just thought I'd start some sort of discussion