Sunday, June 21, 2009

Next upward wave coming?

As planned, the mid-week rally saw me cutting down from 3 long positions to now 1 long position. Those two that are i cut were at a loss. I learnt to take small losses first instead of being stubbornly and painfully wrong. I mean it is clear to me that those buy signals didn't work and from my experience they may point to more downside. More downside doesn't mean the bull is dead, it simply means i may be too early. There is a SIGNIFICANT difference here i would like to share. The buy signals i used to trade was when the economy is doing well and is still booming... the recent buy signals were from a time when there is still much uncertainty about the economy. Simply said, the pull back can be pretty deep as compared to that of the bull market. Hence, i opt to reduce my risk exposure. If everything is fine, i can always add on to longs. As of now, if even this one position turns out to be a bad trade, the market may head lower.

My anticipation of the coming weeks is perhaps another push upwards and then form a lower high. This i have to watch the broadbase market for any evidence of hitting resistances and not moving any much higher.

The other reason why i am still keeping a long position, technically this pull back to me still looks like a normal and healthy retracement. But alas, i do not have the conviction to go full long. I still need to watch for more obvious signs before i add on to my positions. I may repeat, i would not maintain my risk level nor increase it just because i feel the market is in a healthy retracement. It sure is a fast way to lose a fortune by trading on "feel". After my daily screening... it sure looks like market is.....

....if i am right, then this coming week should see the resume of uptrend in anticipation of the next quaterly earnings in July. Not to forget we have the mid year fund dressing to look forward to. Index stocks are those that may benefit most.

On the index front, HSI looks pretty decent despite the horrific week. Based on the weekly candlestick analsyis, it seems like the hanging man got confirmed and HSI should head lower. However in T.A, if a bearish signal doesn't work out, the movement in the reverse direction can be very powerful.

Last but not least...... 赚钱的好机会来了!

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