Monday, January 14, 2008

Wanna profit from the rebound?

The bearish breakout finally happened. Many descending triangles gave way. It was a pretty ugly sight. Along the way, when the descending triangles were forming, we had many decent rebounds. I got vested at one such rebound last month but only had to cut as there was no follow through buying. Follow through buying is a sign of bull market marked with tame selling. What I saw was gains very cheaply given back to the market by the brutal selling, volatile market actions...etc.. all these are not signs of bull market. As of now, i still do not see signs of a bottom as yet.

STI is now officially trading below the 200DMA. This is where in wall street they regard it as a bearish sign. All you need to do is to check 1997 and year 2000... compare the relationship between 200dma and STI, you will appreciate what is happening now.

Going forward, we may have some rebound. I for one a not interested to profit from this. For me, i want to establish short positions strategically. If the coming rebound is one of the lower high of the downtrend, then i would have shorted at a very good position. I trade with a longer view by the charts.

When HSI rallies to 27,400 last Friday, I initiated a put warrant position as I recognise that resistance level from the chart. True enough HSI closed down 400 on Friday and my position swings into profit. With DJ closing overnight losing -247 points, i beginning to fancy a 1k decline in HSI today..... it never did. Hence my plan is, I will add if the descending triangle breaks convincingly. Or if 27,600 gives way, I will cut my losses. I am still not interestedin stocks as of now, prefering to focus on HSI.

US side, plenty of data this week... so let us expect a volatile week!

Clue: Lookout for 4g1r!

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