Wednesday, February 25, 2009

Facing a rebound

Although i anticipated the rebound, but to be able to hold firm to my shorts is emotionally testing. To say i am not the least affected by the rebound would be a lie. It's really how i manage the fear inside; the fear of seeing my profit goes up in smoke. First of all, i must be clear, which level will mean this is not just a bear rebound. Which level will be a confirmation that my view is correct? This is how one can manage his emotion in trading. Otherwise it will be easy to be swung out of position. However we are all humans afterall, mana buay sim tia to see the profit shaven off. Like Livermore said, "Why worry about the few bids of profits as we didn't even own it in the first place" He further ensures that reaction in a trend is healthy and normal.

The buy signals from my strategies didn't trigger the entry price. This despite Dow was up 250 points. Perhaps the market isn't too keen to be bullish this time round. Most of the stocks finished near their lows. Wilmar for one manage to close a gap in spectacular fashion. To think i was interested to long it. Indeed, if it closed above 2.90s, i would consider it as bullish. Looks like 2.60s will be tested soon.

HSI lead by nikkei, spured on my Dow's overnight closing nearly spoil my day. it traded as high as 13.2k.... squeezing the daylights out of me.. i really need to see HSI breaks 12.4k by end of the week, otherwise something may not be right. It is a danger sign to me. Because Dow has broken the lowest level since 1997.... HSI, Nikkei and STI still languishing above 2003 lows... how can? But from my experience, Dow always dictate. Hence it may mean Asia may play catchup later. Otherwise, the recent reports about China may be true... their stimulus package seems to be working... and market maybe anticipating Asia to be firm for now?

UOL surprised me...gosh.. why it has to be me? Remember i covered Cosco at 835 and it tanked further... NOL refuse to go lower, and now i have UOL threatening to the upside... I know UOL is crying wolf if tomorrow it doesn't close higher with significantly higher volume or there is a bearish candle.

NOL is not easy... the way it traded as if it's going to breakout to the upside really disappoint me as i have anticipated a breakout to the downside. To short NOL, one must be sea-sick resilient because it is swaying up and down in the range still. However i like the fact that despite two bullish days and it didn't breakout strongly. Let me just observe one more day and then i decide if i should get out of it and loot one more liap of HSI. This is my strategy for the near term, i am going to take profits from stocks and then add to my HSI shorts. This way, if market plunge like October style, then i will tua tan. Otherwise, at most i lose my profits. However since i am with the primary trend, i think i have a slight advantage. Let's see.

For those following the Fibrechem story... this used to be one of my winning stock in 2006... the uptrend is well defined and very easy to make money. But gone were the days. Now this stock joined FerroChina into cold storage... Corporate scandal man! Those "Wrong" term investor this time really jia lat liao... I think Livermore put it very nicely. We must not invest in a company whereby it performed extremely well only in an economic enviroment and expects it to perform as well in a different set of economic enviroment. To invest, i think the company need to have a proven track record and the management team must be yan dao and capable.... otherwise easily become a victim.

I think tomolo may be a good time to go hoot one more short... depends on where Dow close tonight.

By the way, US new home sales dropped... They thought with the stimulus package, people will start buying homes.... please man! With so much uncertainty, plus job losses...i think they may hold cash incase tio retrench? Also, i thought most of the time people will make money from stock market first before they buy properties? With such sales going on in US market, maybe they get the money and start buying shares? keke

By the way, have you guys received the GST offset? I got mine.... also spent liao.. wahahaha i did my part to save the economy! :D

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