Tuesday, July 31, 2007

Price Precedes News

I would think, we are not out of the woods yet. I'm gonna be patient and wait for the market to show me a bottom before I start to build my portfolio again. First rebound is nothing to be excited about. It's how the market test the previous low that matters. Things to watch out would be price actions, more selling or more buying. But before I build my portfolio, index is the other option where we can trade to cover paper losses. Last Friday my order for STI call warrants was not filled. I won't regret queing at the bid side and not buying from the offer side because it was an elephant spread and I will be paying higher premium for unneccesary risk. Market is always there, I will wait for another glorious opportunity to pull trigger.

Tonight we shall visit two charts namely StraitsAsia and Midas to show you how price movement precedes news. I just hate this part of the market. The more informed always has this advantage over us small retailers. There are 2 ways we can protect ourselves in this kind of scenario. Either you buy below the intrinsic value of the company and be an investor with a longer term horizon, or you use Technical Analysis to study the trails left behind by the big boys. When big boys run road, you don't want to be caught ball watching.





DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings.