Tuesday, October 28, 2008

Profits kept inside warm warm pocket for shorts

The strong rebound caught my eye. I promptly took my short profits on HKLand as well as Yanlord. I do not believe the market can go down one straight line to 1200 where i eye the major support. With such a hefty fall, i no believe government will not do anything. Anyway it is good profits and the stocks have tested the support. Now that i have no more trading positions in the market. It's time to identify those resistance levels and ambush the bull. Participate in this rebound? I will only consider if the resistance is broken.

Market expects Ben to cut the rate to below 1%. The impact of the last cut was lukewarm, hence to bring the rate below 1% may or may not be welcomed by the market. The reaction of the market after the cut will be key to determine the next direction.

DISCLAIMER: The contents in this website are for fun reading and must not be taken as a buy or sell advice. You must do your own analysis on top of my postings. By reading this blog, you agreed that i am not responsible for your trading.

Wednesday, October 22, 2008

Selling into strength

The pattern in recent weeks seems to be selling into rallies. I observed many stocks hit their resistance and fell back. In November Issue of Smart Investor, i wrote that this market has got no confidence. I also observed many stocks are in a nice downtrend, even the index is going down nicely. However, there was a suspension of shorting through my ang mo platform. I called them up and they told me an email will be sent to inform me when we can use the platform to short the Singapore stocks again. With 3 short positions, adding to short was not my priority so i couldn't care less. Initially i thought it was banned by exchange, but another brokerage house can still short. So i let it pass.

Today took my profits from UOL and prefered to ride on Yanlord and HKland instead. I am not comfortable with 3 shorts because STI is near the 1800 level. My friend advised me to be wary of a big rebound near this level which may squeeze my profits. It's always good to be taking profits on the way down. Just as in the bull market, i also take my profits on the way up. Risk management!

Recently, the course screening rule known as the TT2 short was making waves among the graduates because of the high probability. If you think you want to find out more about this rule, just go to www.chartnexus.com/events and join one of the previews.


CapitalMall: Another stock picked by TT2.


DISCLAIMER: The contents in this website are for fun reading and must not be taken as a buy or sell advice. You must do your own analysis on top of my postings. By reading this blog, you agreed that i am not responsible for your trading.

Monday, October 20, 2008

Neither long nor short

I screened the market with XPerTrader on Sunday night and observed that many stocks are in an extended downward movement. To add to shorts here will be more risk than reward as most resistance are far above. Today the market went bullish and most stocks are moving upwards. Now, is it time to long? For me, i would not participate in this rebound as yet. My guess is, most of the stocks could be forming bear flags or are retesting their resistance. It is at this resistance we will know if the bulls are stronger or the bears and subsequently choose our side of the battle. I have patience to wait, but i fear market may not have the strength to test the resistance and falls first. Last Friday, I just added another short position on UOL while keeping my yanlord. I thought a bear flag is in the making... I know i am wrong if it breaks the flag.


HKLand: Resume of downtrend?

Meanwhile, do you guys know what is dang dang dang dang?



DISCLAIMER: The contents in this website are for fun reading and must not be taken as a buy or sell advice. You must do your own analysis on top of my postings. By reading this blog, you agreed that i am not responsible for your trading.

Thursday, October 09, 2008

China Shares Scandals rock the market

I would be blind not to record this in this trading diary of mine. FerroChina, was viewed as one of the titan of the S-shares could not repay a loan. In this bear market, many scandals and negative corporate news has surfaced from S-shares.... i have long doubted the quality of those companies listed in our bourse. I mean why are the best listed in HK market? US market? So those that list in Singapore? Another observation is many of those china shares are fast becoming penny shares... look at Hongxin... one by one they were being shot down... mercilessly... sino-env, synear, jiutian, cosco, yzj, so many of them! With the current bad news on Ferro and China Dye, it should drive more fear into investors. Especially those who were sold stories about how good these china shares are.

That's why today i choose to short yanlord at $1. My view is, it is a lower high and there is no incentive for S-shares to rally for now. Confidence will be at a low after the scandals. Furthermore, property sector in China... is it still booming? My guess is the rally to $1 from it's all time low was due to the interest rate cut. However, fundamentals effect is slow and sentiment will drive the stock price for now.

They blamed shortist for the turmoil but hey they banned shorting and look? It's worse than before the ban. They are obviously no longer in control. Concerted interest rates cut, Bail out plan approval, ban shorting... nothing works anymore. When nothing works anymore... how will the market moves up? I think the important thing for now is to find an edge... anticipate which news is going to bolster the market's confidence and act on it.

DISCLAIMER: The contents in this website are for fun reading and must not be taken as a buy or sell advice. You must do your own analysis on top of my postings. By reading this blog, you agreed that i am not responsible for your trading.

Wednesday, October 08, 2008

Will Concerted efforts salvage the situation?

News is out, concerted efforts to cut interest rate by major central banks. This is the action that i have been wary about. It always happen. The more i am in this trade, the more experience i gets. Hence when similar situation happens, i know what to anticpate. True i miss out the greatest plunge in history by covering my shorts early. I looked back, would i have done the same? No. After covering capland, cosco, yanlord, plus the profits from my HSI trades, i should not covered all my shorts. With the profits in my account, i would be only risking my profits if i hang on to my noble shorts and leave a trailing stop. This is a simple rule in trading, risking profits to make bigger profits. Something i was so used to doing yet this round, i miss a great chance to make more money. Is this greed? No i think this is a chance for me to reflect and remind myself to be always sharp. Perhaps dabbling in forex took my focus away from my positions. After some months in forex, i find that it is indeed more difficult than stocks. There are carrying trades unwinding to look out for, economy data which may swing the currency up and down, oil price affecting la,... if u realise, it's the same for stocks... however the difference is, for stocks, it moves slower and hence if you are slow in reacting, it's more forgiving. When comes to forex, if you are slow, you end up run over by a lorry!

Today i have sinned. Like many, I saw that the market had a strong rally during the afternoon session. No one knows what happened, but my guess is, the concerted efforts that i am wary about may have happened - concerted efforts. Hence i went long on HSI but within 30 mins, i was stopped out. Itchy fingers.. keke Anyway, how the market reacts to the concerted efforts is more important. If market moves down instead of up to cheer the move, it means we are going to see new low. If the market cheers the move, it means we could have seen a temporary bottom and hopefully we have a sustained rally. The key thing here is to recognise entries into the rally.
Next is where are the resistance to short. Even scooby doo will be able to sniff the low level of confidence in the market currently.


DISCLAIMER: The contents in this website are for fun reading and must not be taken as a buy or sell advice. You must do your own analysis on top of my postings. By reading this blog, you agreed that i am not responsible for your trading.

Sunday, October 05, 2008

Bailout plan no big deal

After being rejected, the bailout plan finally got approved for the second time. When i was long S&P, my anticipation was a reactive rally to the approval. I was wrong. The market did a sell on news to close the week negative. 10,000 level may be tested in coming days. Althought the bailout plan was approved, the slew of economic data that came last week were bad. Even oil fell below US$90.... then.... why on earth are we going to have a 20% increase in electricity bills for??? Tey say is because of forward something... then throw out some terms which nobody understands? It's like when someone ask me how fast is Ferarri, i answered, because of the 0.55 mm diameter of the cylinder, it can combust the air and fuel better.... What the heck! Anyway, if it's forward, econ data pointing to slow down, GDP forecase is down, Oil price is down, How come going forward it's going up???

I sold my Synear after it doesn't go down despite broadbase market is going down. The logic is simple, Synear may not be the stock that will lead the downfall. Those that were going down are local bluechips. After throwing out Synear, i am all ready for the next chance to short. Currently most of the stocks are languishing near their support levels... i will exercise patience in waiting at resistance for a good risk / reward entry.

Now for stocks, many have completed the "Ice Kachang" formation. I will be particularly interested in bluechips over china shares. The best option is to have more exposure to bluechips than to S-shares.

Currently at ChartNexus, we are prepaing to move to a new training center. The first ChartNexus Traders Club will meet up at this new training center. The 4 hour session will cover market direction, sector analysis and stock picks. I'm sure this is what our graduates have been waiting for! :D

DISCLAIMER: The contents in this website are for fun reading and must not be taken as a buy or sell advice. You must do your own analysis on top of my postings. By reading this blog, you agreed that i am not responsible for your trading.