Friday, January 25, 2008

Hold your breath!

The last 2 candlestick shows lots of market emotions and it came with high volume which confirms the panic. We had a hammer which is followed by an inverted hammer. I see resistance somewhere 3200s level. Incentives to move to that level include Fed's meeting which is coming up, we are some distance to the resistance level. Watching how the market behave at that level is important. We should not see heavy dumping and that after the healthy retracement, we see a higher low which to me marks the possibility of the start of an uptrend. After which we must observe the previous high and hopefully takes that out. I don't rule out a good uptrend which may last for a few months given that US Govt and policy makers are stepping in to help the market. But alas, it will only be temporary.

Currently after being shaken out of my Cosco, i am feeling frustrated. The sudden swing down of HSI caught my attention yesterday and I decided to take my profits and avoid risk.

About my macd histogram system. essentially it is a trend following system. Hence in recent weeks, no matter how you screen the market using XPertTrader, it is not going to give you any buy signals. It will also not give you any sell signal because we are on the way up! This is what having a trading system can benefit me and those using this XPertTrader rule. Signals will start coming only when trends are established. This is also why I am able to pick winners consistently for GrowMoney quickpicks.

However, since one has to wait, it also means that using this system, one has to have patience and discipline to wait for the signal to come along. Truth be told, the rally today did affect me psychologically. I am green with envy as i see Cosco going to 4.90. I am sad that I sold mine at 4.70 during the panic dumping of HSI. I felt greed and is tempted to latch on to the rally today but common sense and the past painful experience holds me back. Looooooooon ah!!! Once the trend is confirmed.. Hoot tua tua!

Patience..... orh mi tuo foo... :P

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