Sunday, March 22, 2009
My trading plan
STI: What is wrong with STI? While i manage to short HSI correctly, i am feeling the heat here being squeezed. In short, my current nett position is "eat pig, pay dog". Win Hsi pay STI... pui ah! With Dow and HSI closed lower for the week, how on earth did STI draws such strength on a Friday. I think at most i will be squeezed to 1630s and it should turn... meanwhile, if it happens, i have longed OCBC. U must be blur... why on earth i go long a stock despite having shorted STI? Let me explain: My opinion is still for STI to fall. But i can't sit idle and watch myself being squeezed. Hence i long OCBC. Scenario A: If STI really goes to 1630, OCBC will cover the paper loss of my shorts from current level to 1630.... not all but most of it... If STI turns down from there, i will cover my OCBC and turn another short on STI and bet that we fall like humpty dumpty from there... and this is how i can cheat death. It beats staring at the STI cheonging up and suffering from total confusion and paralysis. Scenario B: STI tua lao sai on Monday. My OCBC chao tar, but my shorts on STI makes... eat pig pay dog... but the important thing is, it is a major turn, and STI falls beyond where i shorted and lower. Then i will be nett profitable. Including of my shorts on HSI.
HSI: HSI may turn lower. The 50-day moving average has resisted HSI in Feb and last Friday we had a bearish candlestick confirmation. If the hanging man pattern is not hung on Monday, then we may see higher. What's more, Stochastics turning down from overbought, the odds is stacked in my favour... lets not forget the 4Green1Red? I'm just glad i have a short position here. If it crashes through 12.4 k, then it will be bery perfect!
Dow: I never expected 7.5k to hold well as a resistance. It coincides with Ah Ben saying there is no clear strategy to slowly unwind an instituition. My hedge on Thursday night didn't work out. I have set a profit target slightly above 7.6k based on the hourly chart, it fell short by 80 points before it closed -80 points by closing. keke I set alarm at 3:30am... 4am was the closing.. Before i slept, i told myself if market doesn't close green and end up red, it could be the turning point. Hence i cut my long and lose small first.... thinking next morning ho say liao... mana zai, STI goes higher and squeeze me!!! This despite HSI diving down... I took half my HSI profits to ease the STI squeeze. Back to Dow, Geithner is going to reveal the plan on how to buy back toxic assests, i think this will move market. I must watch how market react to it. As of now, on the weekly chart, there is somemore room before we hit resistance. That is where i feel the risk reward to short is higher. Then why the heck i short STI so early??? Greed! I tried to act smart by anticipating an intra-week pull back which never happened. Who am i to tell market what to do? It's funny how i know i shouldn't do something and yet i still do it. I convinced myself that i have profits to risk and would risk small... why would i even take risk? I better wake up my blardy idea and not keep wasting money! To long... if Dow survives the next plunge near the 20-day thereabts, this is where i will cover shorts and turn long.
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