Thursday, May 10, 2007

Threading by the fine line of cautiousness

After a splendid opening on Monday where we opened into virgin land only to close lower and Tuesday echoed. All these despite US breaking new high after high, we seem to have dislodge from the association with Dow Jones. STI has now covered all the gaps created last week and this is healthy! It found gap support at 3409 thereabouts. Come to think of it, the cycle was pretty obvious, sector by sector they took turns to rally. We had banking shares then followed by offshore and constructions. So far property seems to be neglected. As for Tech sector, wait for next reincarnation....they never fails to disappoint.

Every rally attempt so far has been muted. I think all thanks to the forums and newspapers that most of the people are very wary of what can happen in May. They are right, we are scaling at such dizzying height and anytime if any market trips, it can lead to global panic selling and thus creating a self fulfilled prophecy of "see i told you so, May confirm tua lao". There is no need for a serious retracement or corrections. We can also trade sideways from here till July where another slew of results can push us farther into the uncharted territory. Another reason for the lack of participation for follow through could be the mid term examinations of the schools. Parents must be busy tutoring their kids at home and not trading... keke

I was wary of the possibility of the pull back too. Hence my strategy for now is "隔岸观火“ (Do nothing), however I continue to fancy construction sector and loaded another batch of CSC today. I notice most of my system picks over the past few night is not yielding results. This is a warning sign. I had said many times that one need not be an expert in many indicators, keep it simple! I know it is a warning sign because from my experience when my buy signals all failed to move, it means the underlying sentiment could be changing. 2 things can happen, firstly, a sudden meltdown hit us. Lastly, for next few sessions if i see my signals working again, all should be fine.

As for my holdings, still keeping my core and didn't sell anything as yet.

DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings. Copyright © 2006 GrowMoney Blog. All rights reserved.