There is a lot of misery in the markets just now. There’s an old saying that when the shoeshine boy starts giving you stock tips, it’s time to sell. It was getting like that in the Australian markets - people thought the gold price was heading towards $1,000 per ounce and were buying mining stocks left right and centre.

I suppose I was the lucky shoeshine boy who (partly from listening to the hype at the time) got into mining stocks a year before they peaked. I was lucky enough to sell my stocks to “bigger fools” before the bubble burst.

An interesting question now is whether the market is heading into a longer term bearish period.

The chart of the ASX All Ordinaries to close of trading yesterday (below) shows that the long-term uptrend is still intact - but increasingly it looks as if the uptrend is going to be tested.

My official position is that I’m going to wait and see whether the uptrend holds and re-establishes itself. If it does, I will look at buying more stocks. If the uptrend breaks, I will need to be very convinced of the merits of aparticular stock before buying it.

The All Ordinaries Index - Uptrend Intact

uptrend intact

Chart Courtesy of Online Software From Big Charts.