Another bear market rally or a proper rebound?.Yes AGE gained 2...

Another bear market rally or a proper rebound?

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Yes AGE gained 2 pips to finish on 5.6c. Our volume was again on lower side like yesterday, just over 12.8m shares traded.
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ASX U Stocks had a decent gain today. Of the 25 stocks that I track, average gain was 5%.
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Overnight US U stocks were also in green with average increase of around 4%. U future gained 20c to finish at $49.20
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What next -
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Yesterday I had mentioned that if the reboundis to happen, it is imminent and may happen in a day or two. Somehow the US
punters were in good mood and it played out accordingly.

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This is what I wrote last Wednesday (28/09)about a scenario possibility (had called this Scenario 1):

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One common themeamong most analysts I have found is that:

·Stage 1 - very shortly we will do ashort term bottom - either by end of this week or early next week

·Stage 2 - Then we will have arebounce, which could take us up to 3800 but definetly below our key figure of3900 - till mid-Oct

·Stage 3 - Then we may have a big fall- till Oct end/early Nov - this may be our final bottom

·Stage 4 - Then we will rise from endof Oct/early Nov for a hopefully big and sustained rally leading up toelections, Christmas and early part of next year

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Stage 1 has started but not yet confirmed(there is a chance this is just another bear market rally, and it fizzles out,even tonight). If market is to play according to above, we will need Stage 2 totake place. But we have lot of resistances. First is to get past 3720,
then3740, then 3800 – but the biggest one just under 3900, somewhere around 3885.The failure of 3900 was key for drop and
may become key again for a rise, abull market. The above Scenario 1 also somewhat fits in with the Kiss of Deaththat happened
on SP 500 on Friday (the Stage 3 drop – not sure if it fits, restdoes). Scenario 1 also fits very well with seasonality – how stocks
haveperformed in last 4 months of the year, including in mid-term election years.But I would strongly suggest to do one’s own
research as it might becoincidence how some events have played out till now and it will not take muchin current market to do just
the opposite.

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From a chart perspective, the 200 week movingaverage below is a support from which we have bounced for now. Above we have
50day moving average which could act as resistance.

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The 10 year yield dropped more than 4%yesterday. Along with the Manufacturing Index which dropped, they seemed tohave
been catalyst for yesterday’s gain. VIX also dropped a bit, just over 30now.

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Personally - Last few weeks I have beentalking about how market, specifically SP 500 is moving. One critical numberwas when SP
500 was just above 3900. I had been mentioning that if it lookslike 3900 will not hold, I will exit my trading positions. As
mentionedearlier, I did exit my positions with SP 500 just above or around 3900.

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After that, when we were reaching June bottomof early 3600, I have been mentioning about couple of scenario that may playout.
I had two scenario but had mentioned Scenario 1 is most likely. Asmentioned last week, I then started buying back last week in
anticipation of Scenario1 playing out, knowing nothing is certain and its only a probability. This isfor a double bottom type
situation. At this stage holding my trading stocks and waiting to see how it pans out.

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So what will happen tonight? Its going to be abig tussle between the bears and bulls tonight. The bears will want this riseto be
presented as a bear market rally and crush it tonight. They must bereally upset and revengeful they were not given a chance
yesterday to exit asit went into green from start(yesterday a likely scenario was SP 500 will drop towardsearly 3500, let bears get
out, then rally). A characteristic of the bear marketrally is a big drop next day, so tonight is crucial. This is what happened lastweek
and we were crushed after a big rise. But the bulls may want this to takethis to 3800s and have a proper fight over there. It fits in
with Scenario 1,the seasonality and some other chart features. Will that happen? Lets hope so.All the best.