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.

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