Y2015 - It will be a different ball game when interest rate starts to raise

As I mentioned on 4-Dec, STI definitely need a push from the oil and gas counters.....when the crowds sell, they (professional investors/traders) start to look for opportunity......http://achua138.blogspot.sg/2014/12/sti-oil.html  We saw that, wasn't it. 

Warren Buffett is investing in oil assets, so does it means that the oil has bottom out.  Warren Buffett is an investor.  He is looking at long term.  Definitely, he will buy any investing product at a bargain price but not necessary at bottom out.  Where else, traders are different.  Just look at the recent oil price.  Yes, political game but in such a short period of time it dropped more than 40%?  Because of the shale gas, because of supply versus demand.............  The actual drivers was the traders.  They nail it down.  Their strategy are sharp and fast.  A five stars traders can be accurate and fast enough in capturing even on the first U-turn entry signal.  That's the reason why I always emphasize this "trade what you see and not what you think" especially today market is mend for trade.

Keppel and Sembmarine, base on TA price action, is coming close to its first resistant level.  So look out - whether it will pull back or a break out to form higher low, higher high.  Trade what you see.

12-Oct, I said that the US and Europe markets correction could be an opportunity for China SSE to do a catch up game.  There it goes.  China SSE had completed its wave one bull run.  It is now approaching wave 2.  Two major resistant that I will be watching at - 3340 and 3500 (which is also the FIBO 161.8% and Jul'09 peak after it recovered from the Y2008 financial crisis).  By the way, 29-November I mentioned that the best way to join the ride is to wait for a pull back.  SSE went up so fast and pull back so sharp, again the main driver - traders.  Nail it down, enough, find another location, nail it down again......  Pull it out (pull the nail up), look for another nail, pull it out again. 

So far, we saw 沪港通 benifit the Shanghai market but not the Hong Kong market.  So bad?  In fact I am watching Hang Seng.  I believe when SSE reaches the pyschology resistant level (75% to 100% up side), it will behave like what Nikkei did.  http://achua138.blogspot.sg/2014/11/should-i-join-ride-now.html  Let's see will the big boys move their funds to Hong Kong.  

Nikkei is trying hard to break 18000.  It major resistant at 18300 (Y2007 peak).  Nikkei bull run started when yuan started depreciating.  Nikkei had completed wave one and two.  They are now trying hard to form wave three.  However, I am watching very closely on this so called Abenomics.  If anything miscalculate and not handling it properly, it can be a terribly timing bomb. 

Our big brother, US.  Whenever it reached a record high, selling pressure came in.  We will continue to see this in Y2015.  I have been monitoring closely on the interest rate.  As I said so many times Fed chairman Janet Yellen knows the consequence of raising interest rate....... http://achua138.blogspot.sg/2014/12/sti-oil.html  Recently Yellen used the word "patient".  I don't see the different between "patient" and "considerable time".  For sure, US will raise interest rate, is a matter of time.  So when?  Not only on US itself (currency, economic data......), I am also monitoring the Europe, Japan and China on how their stimulus program go.  Hint from the Fed, whether is from Yellen or her team.  Remember this - stock market moves ahead economic. 

This is the first time that the bull run in the US market last more than 5 years.  This was because of all those artificial liquidity.  When things start to go into normal and interest rate starts to increase, a new chapter will begin. 

We saw some major cities, their government implemented cooling measure one after the other.  Those measures caused the properties price to come down.  With that, certain categories buyers/seller were unhappy and certain people like the property agents struggle/suffered/more unhappy........and thereby another set of rules implemented............  Gold came down 40%.  Oil, it came down 40% too.  Commodity, metal ..............  So ask yourself, can equity markets go strong for another 2 more years?

As I said artificial liquidity.  Today situation is like you are boiling a "ba ku teh" soup.  Not salty, you add salt, not spicy, you put in more pepper, not enough water, you add more water.....you just continue to add ingredient after water, water after ingredient.  Although you may be boil the soup with low heat, but this boiling has been carry out day after day, week after week...........end of the day how you think the "ba ku" going to look like and how the soup going to taste like? 

I foresee that Y2015 is going to be volatile.  It is about time to test the traders skills.  Sit tight and prepare for the roller coaster ride.  Watch out all those things that I mentioned above.  On top of that, when you see all the major indices in line and retail investors/traders start to come in, bull look convincing charging, this is where you should be even more highly alert.  At the time, I hope I am alert and smart enough to put on my parachute before the big boys just out/off from the airplanes.  Beside these two, for TA, I will be very careful when the Opera house third fame roof starts to form.  So sit tight and enjoy the ride.  And remember trade what you see and not what you think and not what others tell you.   

Past 3 days, equities market tumble because of oil....?

Past few (3) days, we saw US market kept coming down and Asia markets followed?  Last Friday itself, US equities market dropped closed to 2%.  Tuesday, Asia market STI took the lead dropped by 2.4%.  Many people out there said that it was all because of oil, yesterday China HSBC PMI and the FOMC.

Oil?  Let me show you something.  Let's look at yesterday worst Asia index STI.  Look at the 4 charting below.  The leading bank - DBS and UOB.  The leading oil and gas companies - Keppel and Sembmarine.  What do you see?  Past 3 days, which counters fell the most?   So if you said the past 3 days fell was because oil............

 

 

 

Because of yesterday China HSBC PMI?  Let me show you Shanghai charting.  What do you see?  Yesterday it went up, wasn't it?

FOMC?  Yes, this is something that we need to watch out for as it may relate to interest rate.  US indices like the DOW and S&P, they are very close to it 200MA and FIBO 50% major support level.  So watch out for signal.  Trade what you see.

SSE - anytime retracement/pull back could be taking place

Whenever I analyse any equity index, I will look at their related Index Future.  China A50 Future, 4 out of the past 7 days, I saw a huge changed hands took place.  It hit the 10,175 important resistant level.  And it has gone up more than 50% from its base.

It means SSE could goes into the same path as the A50.  Further support, SSE has gone up 50% and past 2 days I saw some changed hands took place on SSE too.  Anytime, retracement/pull back could be taking place.  Trade what I see. 

STI? Oil?

Remember I said this on 23-Oct "Hope that the specialists do not create another set of gaps while they are patching those upper side gaps." http://achua138.blogspot.sg/2014/10/gaps-are-trend-enemy.html

In the past, STI used to follow the US market.  However, today STI doesn't really follow the US market anymore especially on the upside. As we have this second brother which is the China market.  But look at what happen to the China Shanghai market right now.  It has gone up 40%.  US kept hitting new high.  Europe, after the correction it has turned upside  Nikkei, trying to test its Y2007 high 18,300.  Where else STI.......????  Look at the last 3 days candles, what happened?

Some blamed the oil and gas counters?  Well, in a way it was true.  Investors were dumbing away the oil and gas stocks.  Everyone are worry about the crude oil price.  Again each time, we have the kind of scenario, we will have those so called expert came out to say this and that.  some said the price will go down to $xxxx, some said all this is because of the Opec trying to punish the US.....nevertheless the most common comments that we heard were demand against supply.

Let's look at the production cost for the global crude oil.  It cost around $30 to $60, depending on the location, water level.......in short the difficulty in pumping out the oil from the ground.  The cheapest of course, oil at on shore and countries in the middle east.  So will oil price fall below $xxx?  Same as gold, in a way "no" but from traders and investors points "yes'.  Read this   http://achua138.blogspot.sg/search/label/Gold and you will understand why?

Let's come back to this topic, what happen to the crude oil.  Supply against demand....as what those experts said?  If we go in depth, you will realize all these are artificial, it is all about polite.  Because of ISIS, because of the transaction against the Russia.  So, when will the game end? As long as the involvement of polite, it won't be easy to.........Just like US QE.  If we look at the past, each time the QE end, market dropped.  But this time, it didn't.  Why?  Because the timing of stimulus from the Europe, Japan and China.  A lot of expert said the US will raise their interest rate by 3Q2014, 4Q2014........Till today it didn't?  Why?  As I said before, Yellen knows the consequence of raising interest rate.  Furthermore Europe was cutting their interest rate and China was lowering their cutting interest rate too.  So will US going to raise interest rate?  Yes, provided.........remember what I mentioned before.

STI definitely needs a push from the oil and gas counters like Keppel, Sembmarine...... Oil and gas stocks have came down on average 40%.  Majority of the retail investors don't make money because they use to buy at high, they follow the crowd.  For professional investors and traders they trade/invest differently.  When the crowds sell, they start to look for opportunity.  Use both fundamental and TA to look for opportunity. 

Should I join the ride now?

Remember my previous posted - don't have to worry about the so called "meh", and do not listen to those so called analyst experts said.........

Shanghai market has gone up 10% over the last seven trading days.  If we base on the psychology level 2000 point, SSE in fact has gone up 34%.  How much more can she goes?  Some people asked me can I enter now?  To answer this questions, let's look at another index - Nikkei.

20,833 points, the highest peak in history for Nikkei which recorded in May'00.
After then, it crashed all the way to 7600 in Apr'03. 
Then the bull came and brought Nikkei to 18,300 in Feb'07
Global financial crisis, Nikkei dropped all the way to 7000 in Oct'08
After that, we saw Nikkei moved between certain ranges during certain periods.  After all, it has a strong support/psychology level between 8200 to 8300.
Then something implemented by the Japanese government which was similar to US QE stimulus.  By then Nikkei started to move upward in Nov'12.  With much hardship, Nikkei finally reached 17,520 points in mid Nov'14.
Nevertheless, since Y2000, Nikkei never has a chance yet to go above 20,000 point.

Now let us look at Shanghai index.
6124 points, highest peak in history in Oct'07.
After that, it crashed all the way to 1664 in Oct'08
Then the bull came, trying to bring the index back up.  Nevertheless the bull was not strong enough.  Apr'09 at the level of 3478 , the mama bear came and pounded the index southern.  
After that, what we saw SSE moved between certain ranges during certain periods.  We saw another similar case as compare with the Nikkei, by then SSE has a strong support/psychology level between 1950 to 2000. 
Then something came out which was the 沪港通.  With this it brought SSE till date to 2683.  An upward of 34% from 2000.  
Nevertheless since Y2007, SSE never has chance yet to go above 6000 points.  Another similar situation. 

Let's look at the zoom in charts.  The arrows that I drew.  Same pattern, isn't it?  So, will you buy now?  

We need to understand how big boys move the market.  The big boys understand how retail traders/investors trade/invest.  Do retail traders/investors know how the big boys move in and out from the exchange market?  The answer is "no".  By looking at the SSE chart, I see two things.  One the recent so called "meh", is only a retracement.  Those big boys are still holding on with their tickets/contracts.  Two, the retail investors are still standing at the sideline, watching.  Here is the problem with the retail traders/investors.  By the time they start to go in, the big boys start selling.   

Whether is indices and counters, it shouldn't keep going up without any retracement or pull back.  Lets look at Nikkei.  End May'13, when it came closed to 16,100 resistant level, at 16,000 Nikkei has a major correction of 22%.  Observe, which time when it come to close to it resistant level, look for signal, enter on retracement/pull back if you are confident and positive on SSE.  But I am confident that SSE can go up to 4000 point, now is only at 2683.  Ok, I enter now.  But make sure that I observe which time when it come close to its resistant level.  If there is signal telling me is time to let go, without hesitation I sell.  Remember this, trade what you see and not what you think.  Lastly, if you happen to see an index or stock which keep going up without a rest, worst with a very steep uptrend, the advise is stand by, put on your parachute.  

Potential signal for China A50 and SSE

Potential turn signal for China A50 Future and Shanghai index.  A50 shows a hammer and SSE shows a DDU signal.  Look out for trigger.

Hong Kong and Shanghai connect gets second day "meh"?

Finally, 沪港通 kicked off on 17-November.  The long waiting connection which allow the cross trading between the two cities, Hong Kong and Shanghai.  

Let's recap what happened over the past two days.  On the first day, the entire quota for purchases of A-shares was filled by mid afternoon and only 16% of the purchases of H-share was used by end of trade.  On top of the volume, let's switch to a piece of news on that day.  "Shocking Japan GDP".  "Once again Japan goes nto recession".  On the same day, Nikkei went down about 500 points.  Overall Asia markets were affected.  Shanghai index not excluded.

Because of panic, on Tuesday, the second day, 72% of A-shares still avaliable by midday and only 5% of H-shares was used.  After market closed, we saw numbers of articles like connection gets second day "meh"..........we even have so called analyst experts came out to say stay out from those A-shares because of this and because of that.......... 

Shanghai market has this psychology level - 1950 to 2000.  For 2 years, wherever it touches this level, it will rebound.  Before the actual launching, Shanghai index has went up from 2000 point to 2500.  An upside of 25%.  If you were to be China investors, what will you do on the first day of launching?  Yes, sell and take profit.  Let the price comes down before you start to buy again. 

As you can see from the trading volume done, foreigner investors concentration is on the A-shares.  I see the potential and opportunity on this 沪港通.  Things that investors need to watch out is the policies.  If you do watch how RMB moved, you will understand what I mean.  Last but not least, make sure you get a reliable broker firm to trade China A-shares.

Entertainment - Father vs Mother

Gaps are trend enemy

STI formed head and shoulder in somewhere mid of September.  It has a clear break out from its H&S neckline with a breakaway gap.  Subsequently it has numbers of runaway gaps.  16-Oct, it hit the H&S TP with an exhausted gap.  Two days later, it revert and have a reversal breakaway gap.

Gaps are trend enemy.  Gaps have the similar problem with "open high close low".  In the market out there, there are numbers of professional traders who love especially this kind of gaps (refer to chart).  They are specialize in playing gap and I called them "Gap Specialist".  They will find ways and tactics to fill those gaps.  Hope that the specialists do not create another set of gaps while they are patching those upper side gaps. 

Indoagri divergence and require to break two resistants in order to end the pounding

Simple introduction on 沪港通

沪港通 a door for us to buy China shares.  It is set to lift the trading volume of certain Hong Kong and Shanghai shares.  Shanghai-Hong Kong Stock Connect establishes mutual stock market access between mainland China and Hong Kong.

In total, 568 Shanghai-listed stocks (A-shares) will be available through Hong Kong while 266 Hong Kong-listed stocks (H-shares) will be accessible by mainland investors.  Out of the 266 H-shares, about 70 of these companies are dual-listed in Shanghai and Hong Kong. 

Share prices and trading of A-shares will be in Chinese Yuan while share prices of H-shares will be quoted in Hong Kong Dollars and settled in Chinese Yuan.  The arrangement will boost the use of the RMB in global trade.  Oversea investors and traders may want to take of this - share transactions are executed in Chinese Yuan, this poses a currency risk to overseas investors, who must choose to pay a fee to hedge their translation exposure or be subjected to foreign exchange fluctuations.

Both exchanges will impose a daily quota of RMB 13 billion (A-shares) and RMB 10.5 billion (H-shares) respectively.

Chinese institution and investors with a minimum RMB 0.5 million in their securities accounts will be granted access to Hong Kong shares through mainland brokerages.

The Stock Connect will not allow intraday trading while investors are required predeliver their orders. This means that purchases and disposals of A-shares must occur over separate trading sessions.  Intraday traders need to take note on this.

FirstRes shows divergence

Last Friday US and Europe markets triggered the TA set up

Recent market, the strategy is to trade what you see and not what you think.  Watch for signal at level.  And remember I said that US and Europe showed buyers coming in........watch the next/next few candle(s) to confirm that.

Lets see did it confirm.  Let's look at 2 indexes for each market. 
DOW - two hammer candles at level and last Friday it triggered.  Whole day it went up 263 points or 1.63%.  Those who do intraday index future could have made money from 50 to 200 tics.  DJI 1 tics is U$5.

S&P - hammer followed by inside bar at level.  Same as DOW, last Friday, it triggered.  Whole day it went up 24 point or 1.29%

DAX - first candle showed seller weakness.  Then followed by a hammer.  Last Friday it triggered.  Whole day it went up 267 point or 3.12%.  Those who do intraday index future could have made 50 to 180 tics. DAX 0.5 tics is EUR12.50  Nevertheless one thing you might take note is below there is a FIBO 161.8%

CAC - it set up and triggered went exactly the same as DAX.  Seller weakness, hammer and Friday triggered. 

What to watch out next?  DOW, S&P and CAC are now at FIBO resistant level.  For them to go higher, they require to break those levels.  On the other hand, we will see a different story if they revert and break FIBO 100%.  So watch out on that. 

Last but not least- remember hard today market is mend for trade.  Before you enter a trade, make sure you know where is you cut loss level.

US and Europe markets, buyers come in

US and Europe showed buyers coming in.  But then, the questions was were they real buyers or those traders that shorted the market earlier and now they buy back.  Watch the next few candle(s) to confirm that. 

Bear in mind, today market is mend for trade.  And also remember trade what you see and not what you think.  Wrong entry, cut loss without hesitate.

Trade what you see and not what you think

Last Friday, US closed at important support level - 200MA.  DOW broke ascending line, closed slightly below 200MA.  S&P closed at the 200MA and support level 1906.  NADSAQ same as DOW closed slightly below 200MA.  200MA - the psychology level for fund managers.  Will market U-turn at the 200MA?  My strategy is trade what you see and not what you think.  Look for signal at level. 

Knowing who is the big brother.  STI, one gap down followed by the other.  Same as the US market, last Friday it touched/closed at the 200MA.  As my last posted, 3220 is a major support level for STI.  If this level break, I will be looking at 3180 and further down a major one at 3050.  So, trade what I see and not what I think.  Look for signal at level. 

Market moves ahead economic.  When the sanction starts between Russia and the Western, in my heart with my knowledge, I knew it is going to impact their economic growth.  Even thought a lot analysts and economists......said that the impact is gong to hit hard on the Russian where else the Western......  All those are nonsense.  That is why I always tell myself, do my homework, do your own analysis and don't listen to others.  German is the economic leader for the EU.  Look what happened to their past months economic numbers.  DAX has drop 12%.  Last Friday, it broke the 8900 important support level.  Will they U-turn?  Again trade what you see and look for signal at level.  As long as it does not drop more than 20% towards 25% the papa bear has not yet come into play/the game.

When the big brother sneeze, everyone feels the chill.  Last Friday Shanghai index also got affected by the US market.  It starts to form divergence.  Nevertheless, the recent 沪港通 may force SSE to play a different ball game.  Investor and traders may pull and push, enter at a much attractive pricing to catch the wave of 沪港通.  What I am more concentrate/concern is if this correction allows the China market to catch out with the US market and then the global market start to move side by side towards north, then traders and investors, you better be really - highly on guards. 

Strong USD?

Continue from my previous posted on 18-Sep, USD was going strong.  As US "QE" to be shutter by end of this month.  Where else Europe and Japan continue their stimulus program.  With this, we can see that the USD was going strong as compare to most of the currencies out there. 

USD/SGD and USD/JPY pairs continue to move north.  It is about to the reach the FIBO 261% and 161% respectively.

EUR/USD, it broke FIBO 261%.  Will it continue pounding south toward 423%?  Possible, but look out as there are couple of enemy sandbags out there between the 261% to 423%.  (Refer to chart).  As I said forex is sensitive to numbers, political decision and plan............  and if everyone recognise the strength of USD, you better......So we need to watch out on that.

GBP/USD, it has a pulled back, nicely touched important FIBO 61.8% sandbag, could not penetrate through, so it pulled back and continue to move south.  Last Friday, it broke FIBO 100%.  However, I see a possibility of divergence form.  Can they like the others, reach FIBO 161%?  Let's go step by step.  Divergence form - yes or not?  Watch out on this.

USD has been going strong for month. And what about GBP?

USD has been going strong for few months.  It has to do with what we called "Tapering".  Just take a look at few of the currencies pairs. 

EUR/USD - It came down from 1.399 to 1.283  Now, it is trying to approach FIBO 261.8%

USD/JPY - It broke FIBO 100% and now approaching 161.8%

USD/SGD - Last night it broke FIBO 161.8% Can it reach respecting FIBO 261.8% level?  Before it  can reach there, it need to overcome 2 other resistant which are at 1.2726 and 1.2792

Last night Fed confirmed further $10B reduction in its monthly purchase, leaving the stimulus program on course to be shuttered end of next month.  After that, what next, will USD continue to show it power? 

Currencies use to be sensitive to certain news, data and of course politics.  I will be watching very closely on interest rate and yield.  On the other hand,  I will be watching closely on Europe.  Today, it has a incredible low interest rate and planning for stimulus.  How far can they go?  Further reduce the interest rate, more stimulus program???  It also has a link with sanction war.  How much it impact the Europe. 

Base TA, as you can see from the charts, all 3 are half way through the major S/R level.  Tap on those fundamental as I mentioned above, look for candle patter/price action signal when it is reaching the S/R level. 

Let's look at another currencies pair - GBP/USD.  Fate of UK (of course Scotland), GBP came down all the way from 1.719 to 1.605 in just two months.  Currently, it is at retracement/pull back stage.  Today, people in Scotland will vote on whether the country should stay in the UK or become an independent nation.  So watch out on that if you are trading GBP.  Important FIBO level between 50% to 61.8%

Price action both USD/SGD and USD/JPY broke it resistant

Price action - USD/SGD broke 1.259 resistant and now approaching FIBO 161.8%
USD/JPY also broke FIBO 100% 105.424 resistant

I do not like the idea of opened high closed low

Remember this posted http://achua138.blogspot.sg/2014/02/i-do-not-like-idea-of-open-high-close.html ?

Look at the STI chart, what did you see?  How many opened high closed low candle sticks were there?  Longer tails facing upward especially yesterday with a addition of big red body.  It showed that the big boys pushed the index up in the morning and after that they did a so called "profit taking".  When is this going to stop or where STI is heading towards.

We saw NADSAQ and S&P broke new high.  And DOW too, only it did not manage to close at new high.  So what happen to STI?  Remember I said that recently STI followed China indices much closer instead of US indices?  Look at recent China indices.  What happened to them, up or down?Down, isn't it?

Remember what I said about US indices when it correction took place?    http://achua138.blogspot.sg/2014/08/last-thursday-dow-dropped-300-over.html  "Just ask yourself, you want/plan to enter when DOW stay above 17000?  If you no, I no, fund managers no....then how?  Yes, you need the index to come down, isn't it?".  In that post, I also mentioned to watch the resistant level that I drew on the China and Hang Seng charting.  From here, you can see funds moved from East back to the West.  So when the funds coming back to the East again?

When the big boys earn enough profit, they will definitely move their fund to somewhere else.  Whether to Eastern stock market, commodities..........or gold, we just need watch closely on the product movement that you are trading.  US indices are on the high side again.  So, watch careful when the fear wave comes in.  That is the time where the funds start to move from one place to the other.   

STI, at this point of time, base on TA, as long as it stay above 3288 and at best above FIBO 161.8%, there is still a chance of her to test last year high.  Beside that, watch the China indices movement plus what I always use to say - respect and knowing who is the big brother.  As he sneeze everyone feel the...........  On top of that, a few things to watch out like Ukraine.......and of course the interest rate.

EUR/USD finally touches FIBO 161.8%

After 22 days of swim, EUR/USD this morning opened with a gap down and finally touches FIBO 161.8%
So what's next?  FIBO 161.8% is also a support level.  If the bear continue pounding, look for any candle sign at 1.3105 level.  If 1.3105 could not stop the bear from pounding, the next level that I will be looking at is 261.8%

Market shake because Obama authorises Iraq air strikes on Islamist fighters?

US President Barack Obama says he has authorised air strikes against Islamic militants in northern Iraq but will not send US troops back to the country.

 As I always mentioned today US is under President of Obama.  The way he handle international issue is totally difference from previous US president, Bush.  Listen properly and capture the important words and sentences that he used. 

"The US cannot and should not intervene every time there is a crisis in the world," Mr Obama said.

US could not turn a "blind eye" to the prospect of violence "on a horrific scale", especially when the Iraqi government had requested assistance.

"We can act, carefully and responsibly, to prevent a potential act of genocide," he went on. "Today America is coming to help."

He said that US air strikes would target IS fighters, should the militants' convoys move toward Irbil, where there is a significant presence of US diplomats and military advisers, or threaten Baghdad.

In addition, he authorised strikes "if necessary" to help Iraqi government forces break the siege at Mount Sinjar and rescue the trapped civilians.

He added that the US could and should support moderate forces that could bring stability to Iraq, and he said there was no "American solution" to the turmoil plaguing Iraq.

"The only lasting solution is reconciliation among Iraqi communities and stronger Iraqi security forces," he said.

For a president who is still busy withdrawing his troops from Afghanistan, what do you think, to bring the whole troop to Iraq?  Well.......only when he doesn't have a choice or there is really a need. 

We have Iraq issue over here and we have Israel issue too.  Keep a close look up on their progress.  I am very concern on the sanction war between Russia and the US and EU.  How US and EU response to the recent sanction by Russia, watch out on that too.  The impact to whole world economic can be as great or even greater than the earlier two. 

DAX has already dropped 10% from its peak

US and Europe imposed sanction on Russia.  It was mild at first but have been tightened sharply since Malaysia airliner was brought down.  Now, the US and EU are targeting at Russia's defence, oil and financial sectors.

What does and how does Russia response to this sanction? 

Russia will ban all imports of food from the US and all fruits and vegetables from EU.  Putin ordered his government to come up with a list of agricultural products from countries that had imposed sanctions on Russia, which would be banned in retaliation.  A sweeping response to the US and EU sanctions imposed over its support for rebels in Ukraine. 

War of economic sanctions?  Who is going to be the winner?  Who is going to get hit?........Just quote one - it will hit consumers at home who rely on cheap imports, and on farmers in the West for whom Russia is a big market.  Moscow is by far the biggest buyer of European fruit and vegetables and the second biggest importer of U.S. poultry.

Russia imported $43 billion worth of food last year.  Russia bought 28 percent of EU fruit exports and 21.5 percent of its vegetables in 2011.  It was the second biggest buyer of U.S. poultry after Mexico last year, accounting for 8 percent of U.S. chicken meat exports.  Do you know Russia since the early days after the Soviet Union, when cheap American chicken quarters sold at street markets were called "Bush's legs" after the president.

Stock market moves ahead economic.  Let's look at EU market.  Whether is FTSE, DAX or CAC, dropped, dropped.....DAX took the lead, it has came down 10% from its peak.  Nevertheless, it is at critical support level - between 8900 to 8980.  If this support broke, the next one is at 8460.

Last Thursday DOW dropped 300 over points, are you conern?

Last Thursday DOW dropped three hundred over points, NADSAQ and S&P dropped 2%.  Friday DOW dropped another 0.42%.  DOW had came down about 4% from it peak.  Are you concern?

Just ask yourself, you wanted/planned to enter when DOW stay above 17000?  If you no, I no, fund managers no....then how?  Yes, you need the index to come down, isn't it?  This is how the game play.  This was the reason why when a lot of analysts said DOW will reached 20000, I said hold your breath.

Let's go step by step.  DOW first support is between 16300 (current 200MA) to 16350.  Second support between 16000 to 16060.  Third support 15700.  S&P first support 1920, second and its major support at 1860 (current 200MA also there).

 

China and Hang Seng recently going strong because of Shanghai, Hong Kong Stock Connection 沪港通。Remember I mentioned about this?  http://achua138.blogspot.sg/2014/06/2014-half-year-review.html    I believe 沪港通 is only the first step.  We are going to see more connection as long as China government see positive outcome.  深圳, Hong Kong Stock Connection?  What about China, Singapore Stock Connection?  Watch out if it happen.  For the time mean, watch the resistant levels that were drew on charts. 

 

STI recently follow  closely with  the China indexes.  But again, as I always said you must still respect and knowing who is the big brother.  First support for STI at 3300, second support 3220.

 

 Last but not least, beside any unpredictable incident, war, disaster......one important thing that I have been monitor very closely is interest rate.  When will US raise the interest rate?  http://achua138.blogspot.sg/2014/06/2014-half-year-review.html  Yes, CPI, USD, 10 years US Treasury.  And do not forget, stock market moves ahead economic. 

Singapore and Malaysia Song

DBS

Artivision

2014 Half Year Review

Eight more days towards end of 1H2014.  Those who read my blog probably by now know why I prefer to look at 3300 as the resistant level instead of 3280.  Since May, resistant 3300 had been tested seventh times.  Each time, it broke 3300, selling pressure came in.     My stand did not change – for STI to test last year high, it needs to break 3300 plus stand firmly above 3330.  

Now, let’s look at the big brothers and things happening around the world. 

February, DOW touched Opera house base line and rebounded.  April, NADAQ touched the Opera house base line and rebounded.  Each time when correction reached certain critical level, someone will say/do something to push the market back up.  Same goes to the other way.  Each time when DOW and S&P reached history high, selling pressure came in.  This scenario happened not only once but countless of times.

Under Ben Bernanke, he mentioned that when jobless rate go below 6.5%, they will increase interest rate.  What is the jobless rate now?  Yes, 6.3%!  Did US increase interest rate?  No!  Now, jobless rate is no longer the guideline to determine increasing of interest rate.  New FED chairman Yellen knows the pro and con of raising the interest rate.  Do you?  Look at history.  Have you ever see how interest move?  Do they move like stock market?  The answer is “no”.  Janet Yellen knows very well the cons of raising interest rate.  We look at Europe.  ECB took deposit rates into negative territory.  Why?  Just only to boost their economic, that simple?    

When and in what circumstance will US starts increasing their interest rate?  US dollar depreciate, inflation goes up.  Beside US dollars, inflation and interest rate, fund managers, traders and investors are watching closely on the 10 years US Treasury.  Watch out when it hit 3 to 3.5%.

Shanghai Index tends to have a very good support at 1950 to 2000.  It used to rebound whenever it dropped below 1950/2000.  Recent IPO and China economic data have given some pressure to the China indices.  Nevertheless, I don’t see a problem over these two.  Like what I said, it will benefit China in the long run.

I am now eagerly watching another project that coming out between the China and Hong Kong - 沪港通Shanghai, Hong Kong Stock Connect.  Under this connection, Hong Kong investors are eligible to purchase China stocks.  Same goes to Shanghai investors, they are allow to invest Hong Kong stocks.  This is going to benefit China and Hong Kong stocks in the long run.

Last year we have Syria.  This year we have Russia and Ukraine.  And now we have Iran and Iraq.  How US responded?  Did US send their troops to Syria?  Remember what Obama did?  Russia and Ukraine?  What action has been taken so far?   Iran and Iraq.  US which invaded Iraq in 2003 to topple President Saddam Hussein and withdrew its troop in 2011.  You see the difference in the way of handling international issue by current President Mr Barack Obama?   

Russia - Putin, a guy with colourful profile – 16 years as an officer in KGB, rising to the rank of Lieutenant Colonel, enter politics in 1991……..became President, Prime Minister…….  Look at how he reacted when US and Europe were trying to take action on Russia.  Russia is a country which has huge assets and lots of foreign currencies in their reserves. 

India!  I have been watching India over the past 5 years.  In term of economic, India shouldn’t be lacking so far behind China.  New and the 15^th Prime Minister of India Narendra Modi. The Indians have high hold on this new prime minister.  I am looking forward to see how he tackle corruption, inflation which is currently eight over percent, growth, safety……..external relationship………

Will this happen to this year World Cup?

I captured this from one of the website.  Will this happen to this year World Cup?  I don't know.  I do not want to guess neither.  I just know today market is mend for trade.  As I mentioned in early January, 小心 and always on guard.

12 World Cup Problems

30 Life Lessons To Take From Mark Zuckerberg On His 30th Birthday

At just 30 years old, Mark Zuckerberg worth more than $24.5 billion, making him the youngest billionaire in the world. But all of his success didn’t come without hard work, dedication and a ton of mistakes. To celebrate Zuck’s 30th, here are 30 lessons you can learn from Facebook’s founder:-

1. Passion over everything
Zuckerberg is famous for saying, “Find that thing you are super passionate about. A lot of founding principles of Facebook are that if people have access to more information and are more connected, it will make the world better; people will have more understanding, more empathy. 
That’s the guiding principle for me. On hard days, I really just step back, and that’s the thing that keeps me going.” "

2. Do the most important thing you could be doing
Zuckerberg constantly worries about whether he’s doing the most important thing he could be doing. He says, “the question I ask myself like almost every day is, ‘Am I doing the most important thing I could be doing?’… Unless I feel like I’m working on the most important problem that I can help with, then I’m not going to feel good about how I’m spending my time.”

3. Remember, success doesn’t come first
Before Zuckerberg left Harvard, he created “Facesmash,” a site that judged how attractive students were based on their dorm directory photos. It didn’t really go over well with the students and faculty, but catalyzed Zuck’s drive to try something new with Facebook.

4. Never accept the first offer
Before Zuckerberg took Facebook public in 2012, he had many, many opportunities to sell the company. He stuck to his guns and believed in what he was doing. This dedication propelled him into the successful businessman he is today.

5. Be prepared to take criticism
Facebook hasn’t been free from setbacks. There have been countless lawsuits, bans in certain countries and other negative feedback that would have scared off even the shrewdest of CEOs. Not Zuckerberg. 
Through determination and thick skin, Zuckerberg and his team have remained strong in the face of adversity, mindful of the hazards and hopeful in their ability to maneuver around any challenge that comes their way.

6. Set personal challenges for yourself
Each year Zuck sets a personal challenge for himself. In 2010, he learned Mandarin Chinese so he could communicate with his then-girlfriend’s family. In 2011, he pledged only to eat animals that he slaughtered himself. This year, he’s pledged to write a thank you note every day.

7. If you aren’t breaking things, you aren’t moving fast enough
Before Facebook “grew up,” the company’s motto was, “Move fast and break things.” Zuck says, “We place a really big premium on moving quickly. One of the big theories that I had about that, was that all technology companies, and probably all companies, just slow down dramatically as they grow.
But if we can focus at every step along the way on moving quicker … then we’ll move as quickly as a company that only has 500 people, because we’ve invested so much in building up the infrastructure and tools and also the culture that tells people to take risks and try things out.

8. Let people underestimate you
 Zuckerberg said, “This is a perverse thing, personally, but I would rather be in the cycle where people are underestimating us. It gives us latitude to go out and make big bets that excite and amaze people.”

9. Stay humble
Despite being the youngest billionaire, Zuck didn’t just run out and buy fancy things. Instead, he focused on growing his company. Up until very recently, Zuck drove a relatively inexpensive Acura and didn’t splurge on a multi-million dollar home, he opted for a place close to Facebook’s campus.

10. Partner with people that complement your skills
Back when Zuck used to personally hire people at Facebook, he said, “We look for people who are passionate about something. In a way, it almost doesn’t matter what you’re passionate about. What we really look for when we’re interviewing people is what they’ve shown an initiative to do on their own.”

11. Give back
In 2013, Zuckerberg was the top philanthropist of the year, donating $990 million to charity.

12. Dream big
 If you don’t dream big, you’ll never achieve your goals.

13. Be exclusive
Exclusivity is a good thing. When Facebook first launched in 2004, it was only available to students at ivy league schools. This caused students at other colleges from all over the country to want to become part of this exclusive club.
By keeping the site exclusive, Zuck made sure that supply was never larger than demand and that Facebook remained a highly sought after prize.

14. Don’t be intimidated by competition
Back when Facebook first launched, it had a ton of competition. All of the competitors were in a better position than Facebook, Myspace had five million users and Friendster has just raised $13 million. Instead of giving up, Zuck continued to work hard and improve his platform. In the end, look who came out on top.

15. Think long term
“Zuckerberg understands the power of passion and the right attitude. Sometimes Facebook hires people just to have the right talent on board, and later on matches up their passions to the projects that they are best suited to work on,” says Ekaterina Walter, author of “Think Like Zuck.”

16. Don’t give up
During Facebook’s first summer, before investors, Zuckerberg needed money to keep going. His parents encouraged him to not give up and pitched in $85,000 to keep the startup afloat.

17. Make mistakes
Zuckerberg said, “So many businesses get worried about looking like they might make a mistake, they become afraid to take any risk.
Companies are set up so that people judge each other on failure. I am not going to get fired if we have a bad year. Or a bad five years. I don’t have to worry about making things look good if they’re not. I can actually set up the company to create value.”

18. Take risks
Typically, when you first start a company, you’ll meet and talk with anyone who will listen. Zuckerberg did the opposite when he was first raising money for Facebook. He shunned major investors, ignored phone calls and canceled meetings, just to drive up demand.
Eventually, he had 12 large investment companies, all fighting to fund his site. While most people would have been too scared of missing out on an opportunity, Zuckerberg and the rest of the Facebook team believed in their product enough to wait it out.

19. Hire people you would work for yourself
Zuckerberg has learned a lot about picking good people to work for him. He says, “overtime what I figured out was that the only actual way to let someone analyze whether someone was really good was if they would work for that person …”

20. Money isn’t everything
Before Facebook began making money, Zuckerberg said, “Simply put, we don’t build services to make money; we make money to build better services.”

21. Build a good team
Zuckerberg on teamwork: “One definition that I have for a good team is a group of people that makes better decisions as a whole than would individually make as a sum of the parts.” Zuckerberg adds that “when building a team you want to think about the dynamics so that way you can maintain this property that the team makes better decisions as a group than any individual would.”

22. Lockdown when you think the competition is getting ahead of you.
In Facebook’s earlier years Zuckerberg said, “whenever any other company gets ahead of us on something that we think is strategic to us … we literally did not leave the house until we had addressed the problem, now it’s a little looser of an interpretation … we don’t literally lock everyone inside the office, but about as close to that as we can legally get.
It’s like ‘alright there’s some competitor that has something that we feel like we really need we’re going into lockdown to get this thing because we’re not going to let (a competitor or disrupter) get ahead of us."

23. You’re not as good or as bad as people say
Keep in mind that you’re not as good as people say, and you’re not as bad as people say. Zuckerberg has said in the past that if Facebook is hitting a rough patch with the media and outsiders, he’ll remind the member of his team that they’re not as bad as the press says they is.
When Facebook is being praised, he’ll remind his team members that they’re not as good as people say they are. Find the equilibrium.

24. Don’t get talked out of anything you strongly believe in
Remember when Facebook Newsfeed first launched? Everyone hated it. The backlash upset many Facebook users. Instead of caving and returning things to the way they were, Zuckerberg stood his ground. Today, Newsfeed is one of the most important Facebook features.

25. Stay on top of your industry
Zuckerberg pays close attention to what’s going on in the tech industry. He’s constantly researching and always has his eye out for ways to make Facebook better.
Instead of always making products in-house, sometimes he has to buy companies. That’s what happened when he got Instagram for $1 billion and WhatsApp for $19 billion.

26. Treat the people working for you well
Zuck understands that if people aren’t happy, they won’t want to work hard. At Facebook HQ, employees get a lot of perks. From free food, to free computer accessories and even an on-site barber shop, Facebook is packed with goodies that make employees never want to leave.

27. Stand up to pressure, both internal and external
Zuck has a rare entrepreneurial skill that allows him to have an amazing vision. His courage to stand up to the pressures, both internal and external, helps keep him on course and never steers him away from his goals.

28. Don’t rest even when you’re ahead
“Creating the culture of urgency, staying in the state of permanent beta, not resting on [and] its laurels. That is something a lot of leaders are struggling with, especially once they reach some level of success. The hacker culture that Zuck created is the key to its continuous innovation and fluid adaptability,” says Ekaterina Walter, author of “Think Like Zuck.”

29. Be fearless
Zuckerberg’s youth allows him to promote an environment of fearlessness. This empowers Facebook employees to innovate and execute on their ideas. It also fosters passion, curiosity and creativity. Both believing in the impossible and not dismissing ideas have greatly contributed to Facebook’s success.

30. Finishing is more important that perfection
Zuckerberg famously said, “Done is better than perfect.” A great CEO acknowledges that no one is perfect, but finishing something is paramount. If you finish something, you can always go back and improve on it, but doing your best is what counts.

Alibaba files for an IPO in the US

Yesterday, Alibaba filed in the U.S. for its initial public offering. Alibaba, an e-commerce company, a mix of Amazon, EBay and PayPal. There’s Tmall, an online shopping mall; Taobao, a marketplace where small Chinese companies can sell directly to consumers; and Alipay, a digital payments company that Chinese consumers use through their mobile phones for all sorts of transactions, on Alibaba sites or off.

So, what is the big deal with Alibaba IPO? This Chinese Technology company Alibaba does huge business. Last year, they sold $248 billion in goods—everything from frozen fish fillets to Nike sneakers to used jetliners.  In one day last year, it saw $5.8 billion in transactions. Alipay was used in payments worth $519 billion. Alibaba is the biggest e-commerce site in the world’s fastest-growing economy, one where many inhabitants aren’t even online yet. Because it functions largely as a marketplace, Alibaba’s operating costs are relatively low, and that, along with its very low taxes, means it enjoys profit margins of 45%.

Analyst estimates for the company’s post-IPO value range from $136 billion to $245 billion. If it’s anywhere but at the bottom of that range, that means the company will be more valuable than Facebook.

Big winners from the sale will include Alibaba founder Jack Ma, who owns 8.9% of the company, Russian entrepreneur and investor Yuri Milner, and the American private equity firm Silver Lake Partners.

Yahoo owns 22.6% of Alibaba, a fact that has been one of the few things bolstering its stock price. It will sell off a little less than half of that stake in the offering, for what is estimated to be at least $10B, and there’s already speculation about what the company will do with it: go on a buying spree of smaller companies? Buy back shares?

One of the questions analysts asked in the days leading up to the IPO filing was how much Alibaba would look to expand beyond China. In its prospectus the company seems to keep its focus at home. The company points out that China has far less retail space per capita than the U.S. and wealthy European countries—0.6 square meters per person, compared with 2.6 square meters per person in the U.S.—while at the same time online shopping still makes up only 7.9% of Chinese consumption. And consumption in China in 2013 made up only 36.5% of GDP, as compared with 66.8% in the U.S. China, it seems, has only begun to shop.

 

STI broke 3280

STI managed to stay above 3200 and finally it gap up and broke 3230 on 15-April.  After that it range between 3250 to 3280.  Again as what I analysed, after 3200 and 3230, 3280 is going to be the third major resistant to STI as FIBO 161.8% is at 3265 which is very close to 3280.  Finally, today before 5pm closing, STI broke 3280.  Isn't it time to celebrate.  As I mentioned I prefer to see it break 3300.

If STI can broke this level and stand firmly above 3330, the next level that I will be looking at is FIBO 261% which is also last year high 3460.