panic selling..., page-8

Have been looking at the All Ords on the charts.

The long black Marubuzou which broke major support at 5500.00 is telling me margins are being called in.

Over the last number of years many have borrowed against real estate to invest in the stock market. Now the margins are being called these people are left with, in many cases a large debt. Many will have no choice but to sell their property. This has the potential to impact the Australian property market forcing the value of real estate into decline. (What goes up always comes down at some time, it just never keeps going up)

With the margin calls taking affect, it will now take many months for the market to recover.

Do not buy because a stock may look cheap. The market has much further to fall. Some brokers are telling their clients to buy in now the stock is cheap only to find the price continues to fall further.

Bypass the fundamentals for now. Even blue chips with good fundamentals are being hammered. The market is coming down and taking everything with it.

This is the time to rely heavily on the technicals. Wait for your charting program to give a clear buy signal before even considering re-entry into the market. Do not chase the trade, let the trade come to you. Never, never; ever, ever preempt the market. We can never control the market.

Looking at the heavy decline on the futures for the DOW has caused me to rethink my position on the U.S. market. If it breaks 11600.00 the U.S. could well slip into recession and there is little anyone can do to stop it.