Wednesday, April 29, 2009

Properties in the spot light

Yesterday I saw many properties dived following Nikkei's weak closing and i thought that was it, the first sign of bear in the market. However most of them managed to close near opening.... and today, alot of them appeared in my screening. This sector is surely worth a second look for a couple of reasons:

1. The 20-day MA holds.
2. There are heavy volume in today's trading accompanied with reversal patterns.

It must however has follow through buying... otherwise, could be another trap.

Infact many of the component stocks showed sign of resuming the uptrend. If this is so, the last low should hold as we progress to test the previous high. Next week is May already... and tomorrow is the last trading day. I have got only 2 options: either i go long and hope the bear give me 1 more week to enjoy profit to the upside... or i wait patiently and short at the first pull back or bearish sign in May.
Even the swine flu going around doesn't affect as much as feared.


Crapland: Rebound off 50% Fibo. with good volume. Shortists squaring off escalated the buying?



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, April 26, 2009

The week ahead

It would have been easier if the week close lower as i anticipated, but it did not. Most indices close slightly lower leaving a lower shadow. Thus i have to re-examine my trading plans...


STI: STI seems to be holding well near the 1840s to 1850s level. The bearish divergence may have been neutralised. Time to go long? I checked across the sectors, majam mostly are trading at base forming a support. I have seen many times how a base is formed and then we see the subsequent market rally fizzles out and caught many at the high. The only safe way is when i see sectors rotating again. What I am seeing now is stocks forming base.... the key word is forming, thus, until it is completed, then i feel safe to long. In a base, we have to watch volume too... it must be those of good base.. otherwise, may not be strong. Once i see good base, i shall kai seow here.


HSI: Is this a double bottom? 15.8k is where the axel stands... If HSI breaks this level, it may trigger a double bottom breakout. Otherwise, we can always wait for a pull back to re-test as support. Here i would like to share a story.... there was once when HSI broke 21k back in 2007, each day, i tell myself not to risk it and wait for pull back... guess what, the significant pull back never happened, it went all the way to 34k! :D hahaha You can imagine how green my face was.... it was once in a blue moon that markets move like this... alas on the hindsight, we now know, it was the last burst before the bear market descend upon us. Thus, once 15.8k broke, to wait or not to wait for the retest?


DJI: I saw the 3 hanging men.. bearish candlesticks on the weekly chart serves as a warning to me if i ever consider to go long at this stage. I have to be selective and cautious. I certainly do not want to be caught long when the market turn suddenly. Especially since the treacherous May is coming up. Currently most of the earnings beat estimates.... market ignored the fact that outlook is still dull... perhaps this is why many reports said the worst may be over. No short for me yet until the market starts to turn down. Because i see Dow may still have limited upside... but is it worth the risk for limited upside? Perhaps it's wiser to wait for the limited upside to complete and join in the selling?


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, April 22, 2009

Friday to close lower?

So sorry to have disappeared for days. I was busy preparing for the upcoming TraderFest for our graduates. Other than the usual stock pickings and analysis, we are going to reinforce those trading principles and concepts in this one day event. It should be quite a spectacular event... 100 participants with laptops! Hope we don't trip the whole suntec.. haha

The last sector which showed strength has pulled back, the commodities. The rest of the stocks are resting near the support levels. Ta pi the gap down on Tuesday is still fresh on everyone's mine. The neutralisation of bearish divergence may have taken place by the sharp sell down and gap down. It is now of interest to watch if market will resume the uptrend. If it does, one of the sector should be leading it, and if so, my money will be on the next sector!

On the other hand, we have been up for almost 6 weeks? time to pull back? The odds is thus stacked heavily on a lower closing on Friday. Hmm.. how to make full use of this opinion leh...


Crapland: First target should be $2.40 there abouts. Like many charts, we pulled back to near 20-day ma.. I will be watching how this M.A holds. The idea is for a weak Thursday and then a sell down on Friday to pichar the line.


As per other commodity related stock, noble looks weak. I especially keen on how it trades on the 200-MA. Noble fans, be it to short or long, don't miss it! :D If commodities continue to fall, i have to look at the other sector and watch which one is going to move off from a solid base of consolidation. This is a typical bull market action. If that is not found, we may see broadbase sell-off.


ChinaFish: The two shooting star caught my eye. However this is one of the better performing China Stock. This one maybe can go long at next higher low. I wait to see if the two stars will pull the fish deep sea.


Nikkei: I have plotted the above possible levels if Nikkei is to fall by Friday. I will be observing how it trades the 20-day moving average


STI: It is hanging precauriously at the support.. if we break convincingly by Friday, i am afraid we may see more selling in upcoming sessions. Or best case scenario is the bearish divergence is in effect, and after this, we form a higher low. I think we can use 4r1g to time the entry here.


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, April 19, 2009

Dow struggles upwards

Dow struggles to close positive again. I noticed that despite coming in with better than expected earnings report, market hasn't taken too kindly to it. It didn't rally as much as i hope to see. Still a ding dong at the recent high. Maybe the market isn't stupid afterall. It is plain obvious that the change in accounting rule in reporting may have helped the banks in their latest results. Notably, most of them reported they made money in their investment arm. I still got to watch how the market trades Morgan Stanley. The profit over there is not guarantee as yet since my position is still open. The hottest topic for now is the stress test results of the 19 biggest banks in US to be released in May... seems like they are thinking of the best way to release so that it doesn't shock the market like what Lehman and AIG did. I also notice how Obama is preparing the market to see GM or Chrysler go bankrupt by pre-determining the dateline where Obama will bankrupt them. Looks like they are determined to keep market afloat. In chinese we have this saying, "Paper cannot cover fire"...

As for Singapore market, the bearish divergence coupled with late selling is a warning sign. Even micro-pennies party seems to have come to an end. Two ways the bear divergences can be excorcist: Market trades sideways with volume thinning. Or we have a quick sharp down and then resume the uptrend.

After taking profits from STI and Nikkei, i'm left with MS to take profit. My plan is to take profit on this before the results is out. It became clear to me that those companies who has reported results cannot cheong further.


STI: The bear divergence and the blue catchment area. One of the idea i am toying is to short at resistance since the bear divergence is so obvious. Cosco, Hi-P and UOL will be on my hitlist. One guru was wrote in his book, if an obvious T.A setup doesn't happen, it means it will go the opposite side.


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, April 16, 2009

Meteor showers

It sure looks like a key reversal day as we saw the market finished with alot of candlestick weakness. Property sector was especially under tremendous selling pressure today. Looking at my screening results, it was weakness across the board. Looks like the textbook signs are happening.... micro pennies rally would usually mean the end of the ah gu. All the bearish divergences look even more scary with these factors in mind: We are at the high. Today we closed with high volume and with candlestick weakness.


HSI: Failed at the resistance today. I didn't short here because i do not have the profit to risk here. We all know that HSI is a wild horse.. hence for my risk apetite now, i can only continue to observe and grind the profits to make the next trade on HSI!

Going forward it will be tricky... the last few weeks whenever we had weakness, almost all shortists were caught butt naked by the sudden return of buyers storming into the market. That's why i also no dare to anyhow short. Is it a reversal, is it a retracement... this is the top question in everyone's mind. For me, retracement would mean we see a higher low. Reversal is where the 20MA is broken and this is where i may turn short. However, right now, it is broadbased weakness. I couldn't see my favourite setup where one sector is obviously weak and thus i am not comfortable in shorting as yet. For now, i am happy to just grind the profits... they are returning slowly.... but surely.

I may have lost a substantial amount of my 2009 profits. But that doesn't mean i trade agressive now in a revenge mode. Rather, my recent trade size and frequency have been reduced. I am more selective and not taking uneccessary risk. This is how i trade. Build up the profits before i trade agressive. It makes sense... if i am successful in building up the profits, it also means i am winning in my trading... this means that i have gotten the direction right! If all these small trades are unable to generate profits, it means i haven't got the market feel back... then surely it is suicidal to trade agressive. Thus once the profits is built up, when i trade agressively, the odds is with me and not against me. So long, no profits, i trade small.

I must explain the recent trades on raffles edu and wilmar are still based on the 2% risk management i been faithfully following. After the MArch debacle, the 2% risk is lower and thus position size is also lower. With the small profits taken from these 2 positions, the 2% risk increases and the position size increases and thus the profits will be more. If my opinion of us closing higher on Friday is wrong, then the profits in Wilmar and Raffles Edu will be lost. The key thing is, never allow your capital to take a big hit. Trading is a business, it is a marathon...not a short sprint.

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.

Tuesday, April 14, 2009

A race to break 200 MA

Day to day i have been faithfully screening the market to sniff out what is going on... i saw big good volume rotating from sector to sector. Also i am seeing volume tapering off in alot of stocks while the price struggles higher... my friend put it very well.. it looks like many retailers kia buay bo... meaning scare not enough shares for them to buy! haha

Banks - This is where DBS flash the first warning sign... OCBC climbing on thin volume and technically it won't last. UOB's bearish divergence is so obvious that i think only the blind would miss it. Now my choice is, do i still believe in this rally and going for the next higher low to long? Or should i turn short and bet that, all this bullishness is rubbish? Actually my heart favour the latter. But better to wait for technical confirmation. Right now, the banking sector has been reporting good result over in US... WFC and GS both reported better than expected result. GS even want to return the TARP money... i think they don't want their fat bonuses to be affected... keke I am still long on MS... it should be reporting result soon... but i'm betting JP Morgan and CITI result will spur another rally.

I received ChartNexus signals for Noble and Wilmar.. this came after i noticed they have not been moving higher unlike indoagri and golden... Olam? It is now very near to resistance... unlike DBS which i saw heavy selling at resistance something i consider technically weak, Olam's volume may just lead to a natural retracement. A reminder to myself... this sector lead the rebound last March as well.

Property still looking very strong... despite warning in the Sunday Times, seems like the sentiment is getting the better of investors. I shall exercise patience here for retracement. It's very easy to be tempted for a quickie... but i shall ignore.. 路边的野花不要采。


RafflesEdu: The sexy shoulder i cannot resist... I like the volume and the strength showed on the indicators. I went long here.

I am still waiting for HSI... the intra-day weakness never came because China announces possible stimulus plan once again. It will be interesting to see how 15.7k trades.

A bad retail sales number came in and look at Dow?? Shaking off bad news again... Let's see tomorrow's closing ... best is up above 8.1k! Burn those bears!!

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, April 12, 2009

Dow: Financials rotated back in favour

Wells Fargo (WFC) better than expected profit for Q1 elevated the market. Couple that with less than expected weekly job loss, Dow managed to close higher than 8k. This is despite many expected Dow to close lower due to the long weekend. As you may know, i have been keeping a keen eye on financial stocks. It's not hard to read through my recordings to find out how often i have written down that it seems that financial stocks are holding well at support while Dow pulls back. This is evidence to me that a normal bull market sector rotation may be in play. The tricky part however is that we are seeing broadbased rally and the opportunity to go long on a good risk to reward is rare. It happens so fast and quick that if you miss a day, it doesn't make sense to chase. 4 sectors are all i am eyeing for good liquidity... financials, properties, offshores and commodities.

On the last trading day, we saw how financial stocks pushed Dow higher. It may be too late to act on our local bourse for now as we have closed significantly higher on last thursday. I also observed that those resources stocks closed signficantly higher after a normal retracement. Indo agri, golden agri and Straits Asia all moved higher... however Noble and Wilmar on the contary nothing to shout about. I don't like it when the big brothers of the sector don't lead.

As for our banks... UOB seems to be the worse performer of the 3. Remember, the resistance is key here, if all 3 failed at resistance and the market seems to come to a stall... i will initiate my first batch of short.



HSI: Though there's a bearish divergence on MacD, I don't wish to short as yet. Clearly, we may head to 15.8k... i think any pull back maybe a chance to long. If the move is sharp and abrupt, 38.2% may work well. If you notice, most of the stocks are rebounding off this level. I have been to Borders at least on two occassions over the last week... i was hunting for a good Elliot wave book. I read something that makes a great sense to me... in a sharp market movement, most support levels may be too far away... traders eager to get onboard may find any form of support to be an excuse to go long. 38.2% thus works well in this kind of scenario.


Currently i have a long position in MS (NYSE). It swung in and out of profits during the last week. However it swings, it didn't failed the support level. This is confirmed accross the sector where goldman, BOA, Wells Fargo...etc.. exhibits similar pattern. With Wells Fargo good results, this stock may throw me a lifeline i so much needed. Tuesday and Friday is more important... this is where Goldman and Citi reports their earnings.

Along the way, there has been tempting opportunities highlighted from the ChartNexus forum discussions, traders club meetings and from our trainers conversations. However I cannot take new positions until i get one trade right. All i wanted is to get my confidence and momentum back. I need to grind the 20% ROI before i can try to hoot tua tua. This is how i trade... when i don't have a profitable position, i shall not take any more position... this is to avoid 5 wrong trades at the same time which can dent a big hole in my trading account. The logic is simple, if the one trade cannot make money, it simply means my reading of the market is wrong. Hence, why am i putting up so many positions? Waiting to be BBQ?


If Wilmar falls below 3.13... technically a small double top!

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, April 08, 2009

Banks and Props leading the way down

Day two of selling... this is something deviated from the last 4 weeks pattern. Then we pulled back shallow and then rallied ferociously. Banks and Properties counters showing bearish divergence and indeed they fallen. Though i had not taken a position, i keep a keen following on the technicals in this two sectors. It is of high interest for me to see that they have succummb to technical weakness. This is where i should be able to determine if market is going into an upward trend or downward trend depending on whether those support levels will hold.

I have this temptation to start shorting stocks which were resisted at the 200-MA line. The first result from Alcoa disappointed market... thus those bullish talk last 4 weeks seems to be too early once again. US banks results reporting may be key to what the market is looking at... should they lose less money than expected, i fear the market may go crazy once again. As of now, i keep seeing some of these US banks/investment banks still holding well despite selling in the US market. Nan dao... this sector will once again lead us up after their reporting?

As for indices, it's normal to see this pull back. The key thing i will be observing is if they will be supported. If we crack through support, then it may resume the downward trend. Otherwise it is important to observe the first sign of an upward trend in the making. When we trade trends, it will be very profitable to get in at the infancy stage of the trend.

I am on leave for the rest of the week.... still deciding which nearby island should i hole up in.... weather hasn't been kind and it keeps raining... my beach holiday seems to be jeopardised.. whereever i decide to go for a short trip, that place must have.... internet connection!! :D My idea of this holiday.... daytime laze on the beach formulating trading ideas... night time watch US market... swee!

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, April 05, 2009

Start believing in myself

Last week's business treat offer me a great chance to step away from the busy Singapore and of course the market. With a string of losses, it's always a welcome to step outside of my shell and analyse from the outside. I happen to stumbled onto a very very good DVD in our apartment in KL... "Fly with me" - a documentary on his airness Air Jordan! Fwah... awe inspiring! After watching the DVD and a good swim.... i think i left the depressing thoughts about recent losses in the pool.. time to focus on the future!

From Singapore...to KL then finally to the sunny island of Penang.. lots of time spent travelling and getting stuck in the jams, which gives me a lot of chances to reflect what have i done wrong. Most importantly, how to avoid it in future... i have enough of the boom and bust... alot of trading ideas came to my mind and i am gonna test them out. One of the interesting one would be Livermore Key. I tested it over the weekend... but doesn't seem to get it right.. maybe it's not applicable in modern market?

The strong market on Thursday saw me squaring off all the short positions for yet another nett loss. It hit my mental circuit breaker. I don't like the way market breaks above 1780 with just a slight pull back.. this is evidence of a strong bull. Also, better econs numbers and how the market has been ignoring the bad news are also signs that this is not the time to short as yet. The most obvious sign is, i began to lose control and at times "hope" the market may pull back.. the moment i realised i am hoping, i know i have to get the hell out of my positions. The market is always there.... leave the green forest, no scare no wood to burn. Really, confidence is very important in trading... no matter what we do... this is something we cannot lose. For those of you who showered me with kind words... i thank you. For those who critises me, no problem.. i will learn from my mistakes. Mastery comes from doing... i won't stop and sulk... that's not me....i have learnt how to take losses in my stride and keep moving forward. huat arh!

I diligently looked at all the charts and realise most of the stocks are right at resistance. This mean i should not buy as yet. I shall wait for the breakout and then the Pull back before i trade. Since i do not have much profit left to risk, i have to trade defensive... once i have the profits back.. hoot ah! One very important thing to note is, we are very close to breaking 6 mths high... this is a key indication to me. Anyway, should the pull back be fast and quick, then let us use the shout box to share stock lobangs. For me, very simple... banks, props or commodities... the rest pah si i also mai.

Just to set the record right. I am not comparing myself to Livermore not Jordan... incase anyone get the wrong idea again... i always like to sekk inspirations from legends. Role models! Power man, if you read Livermore's book... the way he trades... Inspiring! And Jordan? He is not born to shoot basket... he TRAINED hard... how simple is that logic?? Hence if i want to make big money... i just got to keep trying!

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, April 01, 2009

Day 3 of retracement

I hate to say it... but things are looking really bullish... if you study the pull back with the trading volume, it is not difficult to notice that Monday's sell-off volume is on the low side... Tues and Wed we traded ups and downs.. but really... the volume isn't there. Perhaps the market is waiting for some news. Window dressing is over... i am disappointed that the sell off on Monday has no follow through. Market always fall faster than when it rises. Hence when there is no followthrough... nan dao... Now tomorrow is where the G20 will meet. Market anticipation is nothing productive will come out of it.... so far G whatever group meeting, nothing concrete comes out of it. However, if for the first time, they craft out convincing plans with action steps... this is where the market may celebrate.

Right now, it seems we are consolidating sideways. I unwinded my HSI shorts with a mere 100 points profit... of course, what's new? The market closes 200 points lower.. This is really getting the nerves of me.. the timing of my trades has been pretty off recently. I managed to find out what's wrong with me. I came out with 2 reasons:

1. I traded by guessing where the market is likely heading to.
2. I have no idea where market is heading.

Point 2 means if i am trading without an idea where the market is heading, i have lost my edge. Remember i mentioned about making anticipations work for you? Like when you anticpate A to happen then B will lead to C... My A has been wrong for the last 2 weeks and yet i put on positions. That to me is a sign of mental weakness and pure risk taking. All these losses will begin to eat at my confidence.

I will not take up anymore new positions for now until i figure out where this market is heading. While i may not take up any new positions, it doesn't mean i will stop looking at the market.. This is the common mistake alot of people made. "No position, gua simi"... how wrong they are... once you want to make trading a serious business, day in day out, you need to observe... one day, you will have an anticipation of where the market is heading.

I also have a serious problem which i cannot explain.... why do i feel that the market is firm and yet i am keeping my shorts? My fear is, this firm market may be too obvious to be true and i am trying to be a contarian? Contarian or am I trying too hard? Over-analyse?

By the way, I'll be travelling to KL again next few days...

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.

Shortists Hammered


STI: Check this out man! A hammer at rising gap support... the volume is high high as well.. bad news to shortisit like me. Today confirmation candle?

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.