Very good thread this one!! Everyone has valid points. Even...

Very good thread this one!! Everyone has valid points. Even though our market will no doubt react to the US and its problems we have to learn to look at our economy with some degree of independence. You only have to look at our market's performance for the last 12 months compared to the US.........people do see us in a different light and due to economic (and currency) fundamentals a lot of the money that has to be in the market will leave the US and find its way here. That will cushion us to SOME extent from another slowdown/recession in USA. Let's just hope the Australian Reserve can use some common sense and stop raising interest rates for a while!! That WILL take a lot of the value out of our market if allowed to go a lot further. My value calculations show our market to be fair to good value currently but interest rates is a key variable in that equation. If our market continues to drop and interest rates stay constant/fall,then it'll be great value shortly.

As far as strategy I NEVER stop buying stocks that fit my criteria........it just so happens that this weeks scan brought up zilch!! If you have a good system scan you will inevitably buy less in a weak market (unless you're into bottom picking downtrenders......I'm not) and you WILL get brought to your attention the stocks breaking out (generally the small-mid caps) in the early stages of recovery ala October/Novemember last year prior to it becoming obvious and the blue chips following the lead..........just takes some guts!!

In a strong market I buy shares only (except in obviously overvalued situations a la 1986-7/2000-2001)
On the other hand I use derivatives in a short market when I view the market as having good downside potential (since about March/April) and only use share puts........not indices. I believe that if you use puts on shares with weak technicals if you're wrong about the market direction,you still have a chance of success as the shares are still crappy........the index is either up or down. And if the market does tank the weaker shares will tend to go down further= more $$$

I am still exposed to stocks with about 50% of available capital,however 10% of that is in put warrants in weak shares (AMP,NCP,BIL,WOW,CBA) meaning that my $$ exposure in the event of a sudden bull market is not high,but in the event of a crash my REAL dollar value exposed to the downside (due to leverage) is far greater than my exposure to shares. So I sleep at night quite well either way.

I think I'm a little less aggressive on the short side than some (ala Crashy) but I make sure my ass is covered. If the market absolutely tanks my stocks will be stopped out and the warrants (all long dated....3-6 months) will just keep on going up!! Those that get through the next few months without a loss (or a profit) will probably make Sh.itloads in coming years

That's the theory anyway!!Good luck everyone.
Ed.