Thursday, December 13, 2007

Major support levels tested again

At the seminar last night, we screened the market for signals.... 49 vs 1..... that is 49 sell signals vs 1 buy signal... so i was not surprised when market didn't head up today... but certainly i didn't expect it to be so bad!!! Nikkei started the rout during our lunch time. So when we came back from lunch, it was point of no return.

It was no surprise when the market came crashing down today. Last 2 weeks saw limited buy signals and what we got were sell signals. Most major indices were ripe for a pull back. Ironically, this sharp pull back maybe better than dying a slow death. It will flush out plenty of stale holders giving us fresh buyers when the bullish time returns. I still don't like the loose price actions in most stocks. A bull market doesn't react this way. Furthermore, it was very obvious that most of the stocks encountered heavy dumping on the way up. ChinaFish was one such example, i was tempted to buy at 1.83, but i didn't find the volume convincing and my opinion was the indices may pull back first. However Fish then went on to new high at 2.00 leaving me breathless and frustrated. If not for my colleagues beside me, only by using vulgarities would i be appeased. hahaha! Joking la, been in the market for quite sometime... situations like this already internalised. I make use of this incident to form yet another opinion. Because Fish was sold down to close at the low instead of the high, I knew a bullish market doesn't behave like this.

Now what? After this sharp pull back, I would be looking to see support levels holding... mixed market. Going up? I think the incentive to head up is still missing. 22 Dec 2007, Bradley turn date... going by astrology analysis, market major turning date.... let us watch how we trade before that date... 22nd.. hmm... next Saturday.. nan dao next week take position???

Another thing I want to share is the importance of managing our risk. If i had not taken my profits off the table quicker in this uncertain market, i would have been badly exposed. I think this is not the time to use trend trading system. Preferably swing trading.

Neither did I go short the market. This is because, with year end coming, there could be window dressing. Maybe after the dressing then short? Furthermore, this pull back is what i have been anticipating. Now my opinion is:

a) STI supported at gap. 3442 to 3397 thereabouts. If this level holds, i will tikam small. Basis? Higher low.....

b) DJ support at 13,200s level hold... then i shall long some call options.

c) My favourite Hang Seng... 27,400s should hold.

If you are one of the participant at this weekend's ChartNexus Technical Analysis Course, be assured that we will be sharing alot about price movement. So that you will know how to protect your positions or even make your own forecast! Remember, MAKE GOOD USE of the 2 full days to ask those burning questions!!!

For XPertTrader users, good news! Joseph has kick started the hand-holding session finally! This comes after the big demand from you. So those who are really keen to make good use of your investment in XPertTrader, remember to register your seat at

US Economy numbers coming up!
Dec. 14
Industrial Production

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