Friday, August 31, 2007

Unusual movement ahead of Ben's speech

US futures lead global indices into a sudden rush as we close higher at noon. This is ahead of ben's speech tonight. Judging from the buying, it seems like he may be annoucing something positive. But then again, it is never so easy. This week's actions has seen mostly buying interest, it makes the last few weeks of selling so forgettable. Over the past 2 weeks, I have managed 3 swing trades on STI and profited from the short side. I would have loved to sit on the put warrants, however, when trading the downside, i always remember this: Price when going down should be fast and furious. This is because of the panic and fear factor driving the price south in great speed. Hence when the market met with resiliency, I took my profits and wait to pounce again. I was very tempted to go long as the broad market seems to be having a field day. However, I never forget how easy it is to give profits back to the market and opted to stay out for now.

Screening on my XPertTrader rule, I found 2 sectors looks to have turned around base on weekly chart. If they finish strongly, i may pick up 1 stock. You may want to check out a list of stocks i presented to fellow XPertTraders at workshop here >>> http://www.chartnexus.com/forum/viewtopic.php?t=219

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

Friday, August 24, 2007

Dow Jones for now



The current price action brought DJI to a confluence level of upward fibonacci retracement and the top formation resistance. It was also observed that the downtrend line is nearby. RSI looks to be trading at the downtrend line. MacD indicator has a very interesting development. The signal line and MacD line crossed over during the last crash in March'07 and market recovered swiftly. This time round, we are at the same crossover point, the outcome will be interesting.

Join us at SGX Auditorium on the 6th of September 2007,
Profiting from the Bull and Bear Market. Click here for more details

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

Tuesday, August 21, 2007

Taking Actions

As seen from my previous posts, I already had a plan and an opinion about where the market is heading. Over the last few sessions, I promptly executed my plans calmly as the market moves in the direction of my anticipations. My plan was to trim down on my stock positions and to trade on the short side.

It isn't difficult to see that rebounds lately had always been a short and quick affair. There was no sustained rebound and this is ringing alarm in my head. Through the weeks, I have dumped my stocks on rebound. Right now i'm left with 3 stocks. Later I will explain the rationale of keeping these 3 stocks. Index wise, i profited from 2 directions in quick trades. 2 weeks ago, STI was supported at 3300, I long the CW and took a quick profit. Today STI tested 3300 as resistance and it failed during intraday, i went for the put warrants and before the end of the day took a quick profit again. HSI's incredible plunge from positive 1000 to negative is a warning. However, a quick check on Dow Jones, it can rebound to 13,300 thereabts and hence i decided to keep my profits first and re look later. I will be tracking global indices for now and will be looking forward to more trades on the indices instead of individual stocks.

I am pleased to inform that there are only 7 seats left in my 2 day Technical Analysis Course, happening from 1st Sept to 2nd Sept. Should the market bottom by then, the concept and strategies shared will come at a good time!

It's very interesting to know that these participants are serious about learning. Despite the current turmoil, instead of feeling frustrated and paralysed, they turned frustrations into actions! They seize this opportunitiy to learn more about Technical Analysis and be prepared for the next opportunity.

GrowMoney Growth Fund
Jasper
HLH
Yongnam

I intend to ride through the storm with the above stocks and dumped the rest at a loss. This loss eroded part of my profits built from Mar'07 to Jul'07. However the profits from Jul'06 to Mar'07 is safe in the bank. This should limit my exposure should the stock market really crash. When market crash, bid and offer spread will be spectacular. In a worse case scenario, there could be no bid queue to sell to. Hence do not take a crash too lightly. I simply do not like the cloud above credit woes and it's impact on the global economy. The most sensible thing to do is to step aside and reassess the situation and get out while i can.

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

Saturday, August 18, 2007

Federal Chief Cuts Discount Rate

We saw how the markets rebounded late afternoon and then at night, announcement came from US that Fed had cut the discount rate by .5 basis point. Is it coincidence? Or did the privelleged ones closer to information managed to move in first? Why did DJ rebound off 12,500 and close at 12,800s on Thursday night? Smart money also know where they should move price so that the confidence of the market will not be rattled. Hence I do not trade the market using guess work, i form my own opinion and act accordingly. Making use of Technical Analysis, I remain objective in times of panic and will enable me to trade a non random market. Market doesn't move in a random way, there are clues to where it will move and we should all have a Trading System to crack the stock market code.

Source from http://www.federalreserve.gov, Ben Bernanke
In June 2006, Ben holds interest rate hike and that set us off on a wonderful rally for the rest of the year. Now 2007, Ben cuts discount rate and many in the industry are looking at it as a prelude to interest rate cut in September.

12 Aug 2007, wrote about my opinion. Right now market has moved in the direction of my anticipations that is, we are on course to a sustained rebound. If it happens, i will be turning long on index and get out of my stocks on the way up before the rebound ends and turn short. I believe a lower high would be seen. If market still cannot rebound, this is bad because if good news doesn't help the market, there will be no incentive for the market to move up in the near term. Right now, I shall stick by my view until the market proves otherwise.

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

Friday, August 17, 2007

Private Email Exposed

Stupid, who shared his experience on the on-going turmoil in the shoutbox has emailed me to share a list of stocks to study.

These stocks are deemed to be still expensive interms of FA. Here's the email.

Thanks Stupid!

Hi Decipher,

I am STupId from your blog. Hope u can put up this list of stocks that L&S keep promoting and I simply can't see y we have to buy based on conservative FA. Everything has a price, I am not say DON"T buy FOREVER... but they should only be purchased when the price is MORE, much MORE attractive than now. Here it goes (in no particular order, just recalling from my head):

Cheena Steel Trains (Midas)
SIN-OH (Sino Environ)
Strippers (Swiber)
Red heart/Red star (HongXing)
Red country (HongGuo)
China Fertilizer (China XLX)
YangZi(YangZiJiang)
Lord of the YAN(Yanlord, even T**as*k was buying?? gosh, they under the L&S spell?)
Love potion #9(JiuTian)
Cheena Steel Balls (FerroChina, low margin n yet high valuation)

ALL the LANs(capitaLAN, KEPPEL LAN, Shitty DEV, SG LAN... blah blah blah)

Will alert u when I find others...

Good day,
STupId

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

Thursday, August 16, 2007

Support Levels for DJI



Utilising Fibonacci, we can connect the low on early March '07 to the top on mid July '07 and we will get all the retracement levels. DJ has broken the perceived support at 13,228 points which was once the 38.2% support. We saw DJ trading above this support level during late July but this level has now given way. The possible technical support levels in technical analysis are as follows:

200 Day Moving Average is at 12,813 level
Fibonacci 50% Retracement Level
Major Trendline support which is close to 200 Day Moving Average

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

Sunday, August 12, 2007

A concerted effort

Central banks all around started injecting funds into financial markets in response to ease credit crunch. This sort of sets off alarms in my head. They didn't act when Bear Sterns went down. However, when BNP's suspension of 2 funds came to light, global markets sell off. It was long thought that the subprime bad loans will not affect the economy until BNP's stunner. Now the world is afraid that the worst fear may be confirmed. My thoughts were, if BNP Paribas can be affected and central banks are acting, there could be more nasty surprises coming.

Isn't financial market interesting? When markets are soaring high, everyone is worried about the bubble in China. But guess what? Uncle Dow was the culprit that punctured the bull run. While I managed to side step the bears by liquidating my whole portfolio when I first detect signs of troubles using Technical Analysis, I am still caught by my initial positions to rebuild my portfolio. I went back into the market too early. If not for the pocketing of profits by liquidating my portfolio , surely i would have commited the sin i was so good at..... turning profits into losses. I would need to reassess my views on where the market is likely to head and then act accordingly. The immediate option is to short the index futures to hedge. However this may not be a wise thing to do .....yet

All along my view is to turn short at rebounds, so far, I didn't see any sustained rebound and hence have not acted. What's more, with Central Banks and Feds reacting very swiftly to support the financial markets, my short positions have to be timed to near perfection or I risk being caught flat footed. Anticipations of Fed cutting rate in an emergency meeting before September's policy meeting are reported in the market place. If this is true, it will set off a rally in stocks and to me, that will be the best chance to turn long and then get out of the stocks i am holding. Because my anticipations is, interest rate cut may not arrest the problem, it merely slowed down the problem and worse of all, lower interest rate might lead to another new problem. Indeed, financial market has a self correcting mechanism running....

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

Monday, August 06, 2007

STI Exhaustion Gap?


Following last Friday's sell off in US, STI had a huge gap down which promptly broke the 3400 perceived as a strong support last week. We have now closed below an important trendline support. I observed that the closing today was at resistance turns support and also at Fibonacci 50% retracement, rebound can be on the cards. Hence I turned long one STI CW. One can feel despair, fear and panic in the current market with many decided to throw in the towel. I went long because i see this gap down a possible bottom. Otherwise 200MA here we come...

DJ is now trading around 13,200 support and Fed's meeting is on Tuesday night. If only they hint about reducing the interest rate.....

GrowMoney Growth Fund
Jasper
HLH
Poh Tiong Choon
Yongnam
LC Dev
TiongWoon
STI CW

*Added STI CW today

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

Thursday, August 02, 2007

Technical Analysis Case Study on HSI


When Hang Seng Index(HSI) broke through to 23,500 levels, it was observed that a negative divergence is forming on the Histogram. It served as a warning that the current trend is losing strength. Now, we are experiencing a global sell off and fear is in the air. Using Technical Analysis, let us look at 1 possible support level for HSI. As highlighted, we will be looking at if the orange trendline can turn from resistance to support. 50 days Moving Average is also nearby and we might see confluence of signals.

You may also want to discuss about technical analysis in our forum.

Global indices charts are available in our ChartNexus Charting Software.

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