Great posts Zanzibar, very well reasoned. However, i don’t agree...

Great posts Zanzibar, very well reasoned. However, i don’t agree yet. For mine a bear market is yet to be proven. Yes i saw the correction coming, our market running sideways was being held up with BHP and RIOs SP racing upwards on T/O rumours. We couldn’t break our consolidation while the US did, ect.
This has been a brutal correction no doubt that, but to my mind it is still a correction. We have had a second leg down and are still within correction limits. A 3rd leg and ill join the bears. Friday was a little surprise to me how weak we were, until i noticed what was going on in Japan. The fact that our market held firm Friday while seeing that unfold was a further sign of strength after our Thurdays washout/ capitulation/ hammer day. I was buying, this was the day many were waiting for.
That night the yanks had their own washout/capitulation/ day, only they have now confirmed the hammer with an up day. I can assure you it felt very strange being long, hoping the yanks would capitulate early with enough time for a rebound same day.
Anyway, before this downward move there was no question, we are in a bull market. Our market and the US have stayed within that 10ish % correction stage for now. Closed over important support levels (5640ish for the XJO and 12800 for the dow).
As mentioned the DOW capitulated and hammered right on the long term MA where most corrections tend to pull back to before revering. They then confirmed and are now 6.7% off there highs. None of this signals bear market to me.
Of course we also have to consider fundamentals. Global growth is strong, our economy is strong and feeding off China’s back. However the US has some issues. Their issues as it stands right now, is a slightly slowing economy, certainly not GDPs of a recession atm. To call a recession atm is pure speculation. They have housing and credit issues, none of which have had any impact yet, on the real economy. Their companies are trading on low PEs are carry twice the cash they do historically and have a lower US dollar in which to cash in on expected global growth.
There is much debate over their housing issues, to my mind in would be crazy for lenders to force foreclosures on people who to date have met their repayments. The lenders are open to negations, the last thing they want is foreclosures. The home owners have a good case with a solid repayment history for refinancing. The problem as it stands, is we are all speculating they wont be able to do to the credit squeeze. Yet the fed and central banks have shown, they’re prepared to act and act quickly to this problem.
The US had tame CPI figures, they have room to move rates and no doubt will drop them at the first sign of further trouble. Bears should take the Feds last move and comments as a warning, he will cut rates if need be! And markets will pop hard!

Anyway, in short:
1. TA wise we are still in a long term up trend just, ironically the DOWs chart is much stronger than ours and is also still in uptrend. (Only 6-7% from all time highs)

2. We are above critical support levels, within correction parameters and had huge wahout days on high volume with hammers.

3. Any US recession atm is pure speculation, the facts show otherwise (agree currect facts are backward looking) But again, there is no indication real or world economies are yet affected.

4. The Fed and Centrals banks have shown they will do whatever it takes to keep the credit issues contained.

5. Mass foreclosures on people that currently can met repayments is NOT what lenders want, its simply bad business.

6. Global economies are current very strong, and forecast to maintain that with emerging markets powering on.

7. Historically markets do not crash on such low PEs

8. They also don’t crash when everyone expects it to. The put/ call ratio was 3:1, Friday. Market knows and will squeeze.