Beware of big boys 拉高布空

So what did you see after the US presidential election? After Donald Trump got elected? Did equities market tumble by more than 10% as what the experts and analysts had exepected? 

It did not, wasn't it?  Infact it went the other way round.  It repeated what we saw on Brexit.  DOW, the first one to broke new high.  Then followed by Russell, S&P and last Tuesday, NASDAQ. 

Remember the things that I mentioned on my previous post?  http://achua138.blogspot.sg/2016/11/seat-tight-and-enjoy-shows-new-chapter.html  Remember I said this - "I will be even more happy if all the four major US indices broke new time high."  Why?  As I mentioned that - "as it is an oppportunity".

Brexit happened in somewhere mid June.  Markets did not tumble as what many people expected.  Days after the Brexit, big boys came in and pushed the equities markets to go higher and higher.  At that level where the big boys start to enter the market, it act as a support and psychology level for benchmarking.  During the upside, no matter how market retrace or pull back, it won't go below this level. 

But today, this level is no longer the benchmark for these group of big boys.  What I saw from the US over the past 3 days, big boys were doing the so called 拉高布空.  The big boys have what I called "enough".  In order for the equities market to go higher, we need another group of people (not you and me) to push the market higher.  If not...........

Last Friday, Europe market DAX reached its resistant level.  UK end with a shooting star.  CAC below has gap which gap is trend enemy.  Asia market like Singapore, Tawian..... bound off from their resistant level.  Taiwan has been the leader over the pas one and the half year, so watch out on them - the formation of a letter "M".

The US and Europe including UK.  We saw good numbers whether in their GDP, unemplyment rate, non-farm.......... so you and me started to believe the economic is recovery, things are in good shape?  In Sinagpore, we have low inflation.  Does that mean you are paying lesser for a plate of noodle, chicken rice...... a 10kg rice cost a dollar lesser.............  You need to learn how to see the loop hole of all these numbers.

After Brexit and US election, market did not collapse instead it went higher.  We have lots of so called property guru came out to tell everyone that it is time to invest on housing.  Certain area property launched, we still saw people going for it.  Stock retail investors/traders went in to buy dividend stocks like Reits.......  Well if this will be continue........ 

Remember this - in the market 90% of the people are losing money, only 10% are making money.  So should you follow the majority or should you think differently from that 90%?

In the nineteenty, people looked up to the UK especially the Britain.  In the twenteenty, it was the US.  Twenty-one century, things changed.  US has more enemies.  Recently we saw Donald Trump trying to play some politicial games with the China before he even step into the white house.  What do you think?  Will US wins and benefit from this game?

Today China, is no longer in 1950, 60  or 70.  China Xi Jinping knows what China wants.  He does not talk nonsence.  China is processing.  During the transforming state, you will see pain.  There will be up and down.  No country can escape from that including the early day of the UK and the US.  China whether you like it or not, they already tranformed how the economic of US dominating the conomic to the regional world over the last century.  They had overtake Japan to become the second largest economic in the global.  Countries like Greman, France....Phillipine, Malaysia..... wanted to be friends with the China.  US to go against the China....... no one is going to be the winner.  To go into trade war.  This is not going to be a joke.  Investors and traders, do trade with care. 

Seat tight and enjoy the shows, a new chapter has begin

Eighty to Ninety percent of the people did not expect Bexit to exit.  Unfortunately, on 24-Jun the result surprised everyone.  Brexit went through and UK is leaving Europe.  What happened to the market on that day?  Can you remember?  UK equity market tumbled by 10%  After that what happened?  On the same day, UK index recovered almost 50% on his earlier loss.  Day after day....what happen......?  It went higher and higher and finally on 4-Oct, it gave you a recod height of 7129.

Now we look at what happen to the US election result and market outcome.  Before the day of election, analysts and experts told eveyone that if Hiltary Clinton was to win the US election, equity market will go up by XX%.  On the other hand, if Donald Trump was to win the election, market will tumble by XX%.  So what did you see on that day when everyone acknowledged Donald Trump had won the election and getting ready to go into the White House?

US Market dived down by 5%  After that, what happened?  It recovered and furthermore, it closed 1.3% higher on that day.  That is what I meant by "you should pay attention to what the big boys are doing" on my last post. 

Once again let me emphasize these:

• Do not listen to others, no matter who is he or she. 
• Do your own homework and do not follow the crowd/majority.  Learn to understand this - market, only 10% of the people are making money.   
• Today market is meant for trade.
• Trade what you see and not what you and others think.  Those analysts and experts told you if .....it will.....if.....it will......  These/those are what they think.

As a trader or investor, we need to know how the economic and market work, link, move..... and function.  What those politicans can do as well as his/her limitation.  Understand how retail/most of the investors/traders act against...... plus how the big boys move the market around.   

Equities markets have been running high over the past 7 years, the main reason was because of low interest rate.  Everyone was been taught to save up for rainy days......  But over the past few years, if you did what your parents did or been told/taught, you lose on currency depreciation and inflation against the bank interest rate.   

So Donald Trump will become the next US President.  He is against TPP......he wants to implement......he wants to reduce tax as to bring the job back to America.  Reducing of taxes and yet so many things that he wants to carry out, the money has to come from somewhere.  With the hint on the last 2 FOMC, unless something unusual happen, otherwise 80 to 90% chance, Federal chairman Janet Yellen is going to annouce the progress of interest rate hike on this coming December FOMC. 

US dollar will go up.  Money will flow back to the US.  Pressure is rising especially on emerging markets.  When US dollar goes up, lot of Future products will get affected.  Like gold, silver, oil ...... and commodities.

Will US dollar get stronger and stronger, go up like no body business.  Will countries around the world allow their currenies to depreciate against the greeb belt to.....?  What do you think?  How far can the US dollar goes? 

Singapore MAS will step in when USD/SGD reaches 1.45  Gold, oil, LME....commodities, drops are an opportunity for me to buy.  I will be looking for a buy signal whenever it reaches the support or pyschology level.   Production cost for gold mining is around $1000 to $1200.  Early 2016, oil reached a bottom of $26.  You think oil can go to $10 like what the analysts mentioned in soemwhere end of 2015? 

US market like the DOW is at all time high right now.  I will be even more happy if S&P, NADSAQ and Rusell do the same thing.  As it is an opportunity.  A new chapter has begin.  Seat tight, watch the shows and enjoy the ride. 

You should pay attention to what the big boys are doing

What most people think it would not happen, it happened.  The world has changed.  People are sick with those politician game.  People are sick with those politicians who smile at you but then they are not sincere. People are.......... continue to struggle even thought every month the data numbers tell you how good is this how good is that. 

What people are looking for is someone who can represent their voices.  Don't believe, just look at what happened over the past few months.  What happened to Phillipine, Brexit and of course now the US. 

Analysts and experts mentioned that if Clinton will to win the US election, equity market will go up by XX%.  If Trump win, market will tumble by XX%.  Now, as what I mentioned - you don't swing with the news nor numbers.  You trade what you see and not what you think, he think or she think.  First you ask yourself "Who am I?".  Second "Which type of trading strategy suit you?" and that lead to "what kind of trader you are?"  You are a swing trader, wave trader, intraday trader or..........  Don't just listen to those so called gurus tell you. 

During Brexit you saw how the market swing.  The market swing wild, just like a roller coaster.  On that day some market even dropped more than ten percent.  But what happened next?  (http://achua138.blogspot.sg/2016/06/brexit-panic-wiped-2-trillions-off.html)  So you trade what you see.  You should pay attention to what the big boys are trying to do?  Are they really pushing the market to north or to south or are they setting trap for you to jump in?  That is more important than anything else, and not what the so called gurus and experts are telling you.  So good luck to you and me.  Trade with care and trade on what you see.  Anything can happen right now. 

Corn is testing the double supports after a nice higher high higher low

Hang Seng has a shooting star

Lat Thursday, Hang Seng broke up and closed above resistant.  Next day (Friday), it continued the upside.  Unfortunately, things turned around an hour before market closed.  It end with a shooting star.  Look at the parallel line that I drew.  It turned around immediately after touching the top parallel line.  Refer to the second charting, Hang Seng Future with T+1.  A much obvious shooting star shown. 

Last posted I mentioned about Taiwan and Singapore.  3 scenarios that may happen - retest, fault break up and a steep upside. ( http://achua138.blogspot.sg/2016/09/singapore-and-taiwan-have-strongest.html).  So, what did you see?  It fall under which scenario?  Allow me show you one of the charting - Taiwan Future.  You got the answer by now?  If no, not a problem, I drew 2 more lines (in black) for you.  One at the top right and the other one at the MACD.  Top right a incline black line and the one at the MACD, a decline black line.  So, what does that mean/show?   

Singapore and Taiwan have the strongest pull back plus rebound

As my previous posted, past two weeks we have the option expiry, Jackson Hole and future expiry.  And we saw markets underwent on either a retracement or pulled back.  After that, it rebounded.  The strongest pulled back plus rebound came from Singapore and Taiwan. 

Let's look at the Singapore future SIMSCI.  It pulled back for 6 days, touches the support and rebounded.  Not only it rebound but it also broke the resistant.

Now the Taiwan.  It formed a head and shoulder during that 2 weeks.  Investors and traders were waiting for the break down.  Unfortunately, it did not happen.  Instead it turned around immediately after it touches the neckline with a runaway gap.  Today, it has a broke up. 

The more you and your experts hoping to see, the more the market goes against your direction.  As I mentioned, during this period, markets are highly manipulated.  Don't listen others.  Do your own homework.  Whether you buy/long or sell/short, make sure you know what you are doing.     

SIMSCI and Taiwan future, the upside looked strong.  Unfortunately, I will be watching on how they perform over the next few days.  It may do a retest before continuing the upside.  It may fall back to the rectangular box cluster, it means it was a fault break out, ........... if the upside will to be too steep, remember these words - how it go up how it will come down.  So trade what you see and not what you think.  Good luck to you and me.   

    

Equities market encounters pressure test

Market like the US broke history high.  Europe and Asia markets kept attacking the high side.  Whatever it is, each ever market they are, majority are now at the resistant level.  Coincidently, it hit this level inside the week of option expiry. 

Next week Jackson Hole meeting then follow by future expiry.  Expect volatility.  A retracement or pull back may take place.  Big boys may use this level/opportunity to cover their long position.  How many long positions they have?  What type of settlement they prefer?  I do not know.  We just have to watch and monitor.  Whether you trade on this retracement/pullback, to buy or to sell, you trade what you see and you make sure you know what you are doing.  

 

You need to formulate your own opinion and not rely on the so-called experts remark/call.

My broker, the experts, analysts......... have been keep telling me/everyone the bear is coming, the bear is coming..... with Brexit, we are going to see a double impact to the market.  But what we saw over the past few weeks was DOW, NADSAQ and S&P broke history high.  Europe and Asia moved up strongly.  Seem like nothing is able to stop the upside.  So the question is - the markets right now is actually bull or bear?

Those who follow my blog, I am sure you know who were the big boys who pushed this markets to go higher and higher.  Why not you tell me - the equities market right now is bull or bear? 
I don't define the current market movement neither bull nor bear.  I define the big picture as territory.  Current market movement, I define them as trend.  What do I mean by that? 

Let's look at the big picture as well as the small picture.  Let us look at what is going on with the world economic, central banks action, system, education.......history and what you should be looking out for?

It is very sad to say that today economics was taught to student more like philosophy then engineering.  Economics has become mathematical rigor and modelling.  The problem with this mathematical model is - in order to make problems tractable, we need to make assumptions.  And assumptions become axiomatic.  But then the fact is markets are not efficient, nevertheless it has been conveniently been ignored.  Mathematical models also can't include unpredictable impact of speculators either.

Not only on the education, today challenges and issues are solve with that mathematical model.  Print money and to print more money.  There is a big risk on this continuously of QE one after the other.  Market will react negatively  when the amount of QE launched did not meet the investors, analysts.....expectation.  Just like the recent one that happened in Japan.

Can anyone remember what happened to Y1993 when Roosevelt decided to print money and go off with the gold standard.  The moved depreciated the dollar and it neglected the deflation.  It didn't bring a high level of inflation.  Gold and bonds went up at the same time.........

Let's take a look at a much bigger picture.  The 5 phase cycles:-
Stage 1 - Countries are poor and they know that they are poor.
Stage 2 - Countries growth and they started to get rich quickly, but then they still think that they are poor.
Stage 3 - Countries are rich and they know well of themselves - yes, we are rich.
Stage 4 - Countries start to become poor and to poorer, but then they still think that they are rich.
Stage 5 - Countries go through deleveraging and relative decline, which they are slow to accept.

So, which stage, your country is, right now?  Countries in stage 4 are in a danger of what I called a wake up call.  Countries at this stage spending continues strong, they continues to appear rich even though their balance sheets deteriorate.  They spend a lot of money on military.   At time they spend even more because of war as to protect their global interest.  However, their infrastructure, capital goods.......become older and less efficient.  They increasingly rely on their reputations rather than their competitiveness to fund their deficits.  Their debt goes higher and higher.  Bubbles starts to form............... this lead to danger of entering into stage 5.

Now we go into the small picture.  Anyone remember any of the financial crisis whether is sub-prime, Asia crisis..........?  Let's look at the one in Y2008.  When you think the crisis starts?  The day when DOW plunged 500 points?  Fundamentally, housing prices started to decline in Y2006.  Subprime credit indexes started to go down in January 2007.  Money market liquidity dried up in August 2007.  Declining housing prices were impending storm clouds.  But then only in end Y2007, early Y2008, investors started to realize that the crisis has took place.  And between Y2006 to end Y2007, equities markets continued to take new high inside the volatility roller coaster swing.

In a bubble, who is to say how far the market can go?  Who is to say when the bubble will burst?  No one.  During the bubble period, games and numbers are highly manipulated.  You see insanity everywhere.  You don't short just because your so called experts said the wolf is here.  You don't long because your so-called said.......   

Investors and traders get all excited on news, fundamental and price movements.  But they completely misunderstand or do not understand there is a bigger picture behind.  The analogy of sailing.  The wind matter but the tide matter too.  If you do not know what the tide is, and you plan everything just base on the wind, you are going to end up crashing into the rocks.

One of the day, 伟哥 will lose it function.  Patience, wait for and recognise the right time.  You may said - but I am not the expert.  You need not have to the brilliant economist, experts.....  You just have to recognise when something matter, and you react to that.  Retail investors/traders, you really need to formulate your own opinion and not rely on the so-called experts remarks/calls. 

Exposes Central Bank Scam

Brexit Part 3

From the day of Brexit till now, 23 days or more than 3 weeks, we saw an interesting markets behaviour.  On the day of Brexit, we saw global market tumbled by 7%, 9%........... But the week after Brexit, market just turned around and this weeks we saw the US market, DOW and S&P broke history high.  Lots of other major markets, as well, broke their first and second major resistant. 

Those who follow my posts, I believe you know why and what was happening.  The week after Brexit, as I mentioned on my 26-June posted, government funds will come in to support the equities market.  If we look at the volume on that week, it tells us that the showed was purely from central banks. 

The following weeks, on 3-July, I mentioned that prepare for retracement / pull back and it is about time for the professional to perform.  We saw the retracement and we saw what the professionals did.  They surfed with the wave.  Retracement was just for them to enter at a much better pricing.  The day of retracement, we saw articles everywhere saying that here it comes, the impact of Brexit....... So if you sold your stock at that moment, now you know who you sold it to?

Which markets were the biggest winner on the ride of this U-turned?  Taiwan, UK and of course the US.  Before the result of Brexit, 80% of the people were not expecting Brexit to exit.  They were all wrong.  The moment that the result of Bexit was out, the so called experts expected the markets to go wild, calling everyone to sell.  They were wrong too.  Today, what I saw over the past few days, I started to see many so called experts started asking people to buy, do not worry, the bull is ........ Retail traders / investors are really lost.  What the hell is going on?  In a while, market tumbled, the next moment market just turned around and hit months / record high.  This don't happen only on Brexit but it has been happening over the past 2 to 3 years.  What is going on? 

Today market is meant for trade.  We should not dance with all those stupid news and numbers.  Those news and numbers are only for mend for analysts to tell everyone oh today market up because of....., tomorrow market down because of ......

Brexit really bad for the UK?  May not.  Give you an example - FTA.  It will be much easier for the UK to negotiate with countries like the India and Australia on the FTA as compare when they were in the Euro.  The fate of UK, very much depends on the new government.  How they perform.  How they work with each other in the parliament, their people/residents and with other countries.  Nevertheless, if they underperform, big different opinion, political game going around.......... then it will be a nightmare.  So it is too early to say how the UK future going to be.

The worry is in fact on the Euro.  Will other Euro member follow what the UK did - Brexit?  Since there were uncertainly and not knowing of the outcome, then why Brexit bring the market to new height?  As I mentioned earlier, first the support from the central banks.  Next, you ask yourself, if you were a professional surfer, you are in the sea and you see the wave coming, what will you do?  Will you get up and surf with your surfboard?

Let's us go to the US.  Raising of interest rate has been the talking point over the year.  Initially, Fed said that they will raise the interest rate base on unemployment rate........then they said they are worried about the slow economic from China.........and then the Brexit..........  Seem like a no ending story/excuses.  As I said Janet Yellen is not stupid.  She knows the consequence of raising interest rate when everyone is printing money.

US election year - final one in November.  President Obama belongs to Republican or Democratic?  Hillary Clinton belongs to Republican or Democratic?  So what about Janet Yellen?  So while you are guessing about when the US is going to raise their interest rate, take this into consideration.

Dispute on South China Sea.  Former president of Philippines, Benigno Aquino III, a keen supporter for the return of the US back to Asia.  Thinking that Philippines could tap on the US to seize control of the disputed territory and exclusive rights to the highly valuable economic zone, he brought the case to Permanent Court of Arbitration in Hague.  Nevertheless, in the very beginning China has mentioned that neither they agree nor accept the verdict. 

China is very clear, they highlighted so many things like welcome dialogues with its neighbour countries over the disputed of South China Sea.  However, US keeps sending naval ship to that area.  Is it part of the US strategy to ease tension and weave a precarious path between provoking China and ensure Beijing abides by international norms or the US also has interest in the region, not only because of its complex relationship with China, but also because the waters represent a key trade routes ............or.........  ?  You judge yourself. 

Before Rodridgo Duterte could sit down as Philippine’s 16th President on July 1, there was already a war of words going on between the United Nations Secretary-General Ban Ki-moon and Duterte’s camp.  Will Philippine new president Rodrigo Duterte work with the US like what the former president Benigno Aquino III did?  We shall wait and see. 

When we look at the economic of US, ask yourself if it is really that good?  If no then why do US markets keep breaking new high.  You should have known the reason by now.  And look at other regions, how their economic progress over the past few years?  There were lots of uncertainly yet we kept seeing this - whenever you feel/think that the market 完蛋了, the hope and greed return?  One after another, the market survive. 

Yes, the answer is knowing and respecting the big brother.  Today market, no longer so much about fundamental.  You won't know how is UK going to be in 6 months from now, 9 months from now,...........  You won't know who is going to be the next US president?  You won't know............  What we are seeing right now, they are all artificial.  They were all because of all those stimulus, printing tons of money.  Flowing everywhere. 

People are now expecting more stimulus to come.  From the UK, Japan Australia......  It is very sad and shameful to say that nowadays whenever there is an economic uncertainly, central bank will start to print more money.  This QE is like the drug of 伟哥.  You feel great, high, fantastic after taking it.  You love it and you continue taking this drug.  You can't perform without this medicine.  One day, you find that this 伟哥 doesn't seem so powerful anymore.  So instead of taking one tablet, this time you consume 2 tablets and next time you consume.........  Sadly one day, you will reach to a point that this medicine is no longer effective to you anymore. 

My advise to all retail traders and investors out there - know what you are doing.  You trade what you see.  Do not listen to others.  Don't dance with news, articles, analysts advice.........  do not invest/trade blindly.  Do know when you surf and when you should put on your parachute.

Lastly, let's look at 2 charts:- 
Taiwan Future - you see a long red bar on June that penetrated through 307.  That is the day that Brexit took place.  Between 308 to 310, that was where the funds started to come in.  It supported the markets way up to 323 and then you can see a retracement took place.  Above 312.6, that was where the profesional got in and pushed the market to break the first major resistant as well the second resistant.  So for the mean time, whenever there is a retest or pull back, these two 307 and 312.6 have become the big psychology support for the Taiwan Future market. 

You may use this approach to analyse the market that you trading, whether DOW, FTSE, .............

Second chart, we look at DOW.  We look at Y1998 to Y2000.  Before Dotcom bubbled burst in somewhere end of Y2000.  One of half year before the crisis take place, market behaved like a 打不死的小强。That's what I mean by "do know when you surf and when you should put on your parachute".  Having the parachute on, you need to know when you should jump.  90% of the retail investor/traders do not know this. 

One good trade - when tthere is good set up with reasonable P&L, you enter

One good trade doesn't mean every trade is a winning trade. 
One good trade - when there is good set up with reasonable P&L, you enter. 
If you see opportunity soon after one good trade, immediately re-enter again.
Remember I mentioned those three in my 30-June posted? (http://achua138.blogspot.sg/2016/06/one-good-trade.html)

Once again, wheat has a hammers and triggered on Thursday.
Corn has an inverted hammer on Thursday.  Some people will enter the trade the next day when it trigger.  Some people will wait for next day confirmation candle plus the follow day trigger.  So depend on individual. 

亞洲投資教父 胡立陽 - 恐掀金融風暴序幕

Experts and anlysts called for bull?

Once again, we saw how the big boys U-turn the market.  So this time round, who was this big boy?  If you do not who were they, refer to my 26-June posted, read the last paragraph.
(http://achua138.blogspot.sg/2016/06/brexit-panic-wiped-2-trillions-off.html)

Just look at the past few years, how and when fund came in to the markets.  How markets had been supported.  So this time, once again we witness "whenever you feel/think that the market 完蛋了, the hope and greed return". 

And once again, you experience this thing called "trade what you see and not what you think".  Plus another important lesson - do not listen to others.  During the day of Brexit, at about 3pm after Europe market I received 2 messages from 2 of the well known remisers (they called themselves as trader and retailors called them as experts) warning me/his clients " to reduce our on hand stocks" and "Brexit, STI could tumble to...." respectively. 

For those who has been supporting my blog, reading my posts, hopefully with so many rounds of up and down, you and me, learned the above 4 points that I kept highlighting - big boys movement, how hope and greed return, trade what you see and do not listen to others. 

The country that people think going to have lots of problems has the strongest rebound.  UK100, not only rebounded but also broke the 6400 resistant.  The rest of the markets either at the resistant level or close to their resistant point when Friday closed.

Past 5 days, the volume was rather thin.  Politician has made the first moved.  Now is about time for the professional traders to make their move.  These people will definitely want to make back what they have loss.  I know a lot of the experts/analysts have changed their perspective in looking at the Brexit from bear to bull.  I received and saw  numerous of called from these people starting late last Thursday, is time to buy, there are still room for STI,.........

They may be right.  I don't know.  Remember what we learned.  Trade what......and don't............  Next time when you received such called from these experts, ask them these questions - where is my stop loss, what is my P&L ratio?

Trade what you see.  Do not listen to others.  Do my own homework.  Markets has gone up straight 4 to 5 days.  For a positive market, at most it go up another few more days and it should follow with a sound retracement / pull back.  On the other hand, if it shoot up like no body business, you better be worry.  Anyway, is about time for the professional big boys to perform.  

One good trade

Last night, wheat hit my stop loss while I was asleep.  Loss 52 ticks.  1 ticks = $12.50 

Although I loss the fight but I still consider this as "One Good Trade".  People may ask me - am I crazy?

Allow me to quote you this person, by a true professional trader Mike Bellafiore.  He is the co-founder of SMB Capital, a proprietary trading firm in New York City.  Few years back I met him in Singapore.  He wrote this great book called "One Good Trade".  Inside the book, he shared the stories of traders who have excelled and failed and why, many trained by Mike, with an essential trading principle wrapped inside. 

Let me quote some of the sentences that written inside his book.  

One good trade doesn't mean every trade is a winning trade.  Good set up with reasonable P&L, pull the trigger that consider as a good trade.  If you see opportunity soon after one good trade, immediately re-enter again.  So there is no such thing/words such as "Damn, I cut too early", "I was scared to re-enter as I taught it would trade even lower"......... What in fact a traders look at is good set up with excellent risk and rewards, then he execute. 

I quote: Losses is something which you cannot avoid in trading/investing.  The question is here how much each time you win versus how much each time you loss.  Whenever someone ask me can I buy this XYZ counter, my first question to him/her is "What is the reason for you buying that XYZ stock?"  Secondly - "Where is your stop loss?"  and thirdly "What is the ratio of risk and reward?" 

Nigel Farage EuroParl on Brexit

Listen to Nigel Farage speech.  Those words were what I mean on my 26 June posted , eighth to tenth paragraph.  ......Will Scotland fight for independent?  Will other EU members follow what UK did?What have been done over the past few years, was to save the market instead of really saving the economic.  Lower income and sandwich class struggle to.............people became frustrated............

Hammer on wheat and corn

Hammer on wheat and corn, triggered. 

After I entered, price went against me.  Am I worry?  The answer is "no".  As I know what I am doing.  I follow my rule. 

1) I trade what I see.
2) I already preset my stop loss inside the trading platform.

This is exactly what I always said -

• Trade what you see and not what you think   
• Before you enter an order, you need to have a specific reason.  Listen to someone or because others are buying...then forget it
• Before you enter that trade ask yourself another question - where is my stop loss.  And make sure you follow this rule.  When it hit your stop loss, cut without hesitation. 

Some people may ask me, what about the profit portion.  Why I did not mention anything about this?  My answer is depend on your personal appetite.  For me, I shall let profit run.  I will only take profit when there is a sell signal for this case.  This is what I called "your stop loss is controllable but your profit is unlimited".     

Brexit panic wiped $2 trillions off world market

Last Friday, we saw a typical roller coaster ride in the global market.  Asia investors/traders were the first one to take the ride. 

Asia market plunged around 2% after market opened when result showed that Brexit's voters was leading.  Around 10am, market turned around when result showed Bremain voters leaded.  Market shoot up, broke Thursday closing price and some markets even crossed their resistant level. Unfortunately this cheer did not last long.  An hour later, once again Brexit turned around to lead.  This time, market took the second plunge, all the way down to negative 3%, 4%, 5%.......  US future even at one time triggered the 5% cooling alarm.  FTSE future down by 9.5%....... 

The ride did not stop here. At 3pm, Europe stock market opened.  CAC, DAX.......plunged seem unstoppable.  However, hours later, we started to see FTSE recovered from its -9.5% loss to -7.5% to -6.5%......  By then, Asia market went into T+1.  By 9.30pm, US stock markets opened.  Global market started to follow the US, recovered from losses.  Unfortunately, this gained did not last long either.  Hours later, markets started to plunge once again al the way to closing.

This Brexit panic wiped $2 trillions off world market.  Sterling pound slumped to 31 years low.  In Singapore, several people rushed to the money changer, hoping to cash in on the sliding pound.  However, these people were disappointed after being turned away by money changers who either refused to sell or claimed they had no more stock.

More than seventy-five percent of the people did not expect Brexit to happen.  If you are one of them who tap on to a lot of the so called expert called, you should know most of them has little worried about the result of the Brexit to happen.  When labour MP Jo Cox was shot on 16-Jun, market shoot up.  We saw UK market continuously up for seven days ranging between 1% to 3.5%.  I received message, email, called from my those well known remiser (retail investors/traders called them expert) advice me to buy.  And so once again, I learned what I had been always been sharing in my blog - Do not trust anyone, do your own homework.  And trade what you see and not what you think.

The Brexit result is out, so what next? 

How much more the market is going to sell down?  That very much depend on the result aftermath.  PM David Cameron announced resign.  Scotland first minister Nicola Sturgeon pledges to protect Scottish EU interests.  More than two million have signed a petition calling for a second EU votes.........Will Scotland fight for independent?  Will other EU members follow what UK did?  This is something that worry the EU most. 

Over the past few years, we saw country after country printing money, lower their interest rate.........   All those artificial things been done did not really help the economic.  Instead, it went into the market.

People, the lowest income together with the sandwich class struggled to survive.  They don't live much happier than yesterday, the day before, the month before, the year before......... We saw inflation number with only 0.5%, some countries even having 0%, -0.5%, ........  But ask ourselves the daily food, groceries....that we purchase, got more expensive or cheaper?  And by how much?  Oil came down from hundred over dollars to forty over dollars.  You drive your car to the petrol station.  How much you are paying per litres?   

These people became frustrated.  They started to vote for someone who really speak for them.  Beside the Brexit, we look at the recent selected Philippine president Rordrigo Duterte, US Donald Trump........  Of course, how capable those guys are, that is another side of the story.  However, if they are able to prove their capabilities after been elected and got into the parliament, by then we will start to see politician starts to go into the another direction. 

The next few days or even weeks, market can be very volatile.  It may not be that easy and straight forward.  How panicked the market can be, depends on what I mentioned earlier- the aftermath.  Government funds will come in to support the equities market.  Short term and intraday traders will do the ride.  This group of traders can go either way.  One thing for sure, they will surf with wind direction.  So trade with care.

My new website: http://achua138.wix.com/mysite

Friday, number of markets end with a sell signal

Big boys think, see and act differently from the majority.  End of April, we saw the panic sell down by the retail traders / investors.  These people were worried about the curse of "Sell in May and go away".  But then what the big boys did?  Have you ask yourself, you, yourself, coffee shop uncles and aunties were selling, then where the buyers come from?  Who are they?

Whenever you feel/think that the market 完蛋了, the hope and greed return.  The market turned around in mid May.  The big boys created hope.  And there we were, the greed returned.  People started to buy.

温水煮青蛙.  Europe and Asia market are inside the bear territory.  I said that many times, the market will not crash like what we saw in Y2009.  The US market is still on bull.  So beside the Bexit,, watch the US market closely. 

The roller coaster ride will continue.  Friday end with number of indictors like STI bearish engulfing triggered, Taiwan IB, Hang Seng shooting star, FTSE and CAC IB triggered, DOW and S&P IB triggered.............  So be very careful this week.  Volatility is back again. 


Past few weeks, I worked on one new website.  Here is the link:  http://achua138.wix.com/mysite

New website

Once again Taiwan took the lead.  16-May, we saw a hammer and next day triggered.  Following 3 weeks, it went up significantly (you can see from the below chart).  Thursday and Friday, Taiwan market closed for the dumpling festival.  Nevertheless, Wednesday it closed with an IB.  Look out on next Monday if it trigger. 

These few weeks, I worked on one new website.  Here is the link:  http://achua138.wix.com/mysite

Appreciate your support.

Tawian Future hammer triggered

Taiwan future hammer triggered.  Politician likely to support this week 520 hand-over.

Combat engineer failed to lay the bridge across

It has been an interesting Y2016, wasn't it?  The coaster ride was more wild than Y2015. 

Before we take a look at what happened over the past 4 weeks, let me recap some of the important points that I highlighted in my past Y2016 posted.  

1-Jan :

1) I posted 2 charts - Taiwan index and DAX (http://achua138.blogspot.sg/2016/01/prepare-for-much-more-interesting-2016.html).  I mentioned this - Elliott Wave

2) US election, a similar approach (how Taiwan supported their market during their president election) but different version on the US market. 

3) 温水煮青蛙, and I warned a much more interesting Y2016 drama is on the way.

9-Jan:

1) Once again I mentioned the 温水煮青蛙 and

2) I highlighted the "ba ku teh" soup story

3) Many things that happened over the past few years were artificial.

4) Any retracement/pull back is an opportunity for you to sell if you are holding any long position.  In Chinese, I called it 逃命反弹.

18-Jan :

1) Once again I highlighted the 逃命反弹 (I mentioned again and again)

2) Those who want to buy on rebound, make sure you know when to sell as you

3) Trade what you see and not what you think (I mentioned this so many times)

4) Furthermore, today market is mend for trade (I mentioned this many times too)
5) Do not listen to others

22-Mar & 11-April :

1) Market needs a "change hand" 洗盘. 

2) The first 2 batches big boys were alighting

3) I illustrated by using commando, guards, combat engineer and infantry.

4) Careful, if this 洗盘 failed, then game over.

And yes, the commando and guards have alighted.  The combat engineer took over the task to build the bridge across so that the infantry can cross over.  But they failed.   

Let's look at the recent market leader - Taiwan market which was one the hardest hit on this sell down.  The second leader and also one of the hardest hit market - STI. 

Taiwan charting.  The chart tells me that the recent free fall came not only from the combat engineer but also the infantry which was the retail traders.  And not only fear, they were panic too.  When they saw the sell down, they were probably worried and panic about the curse of "sell in May and go away". 

What I will be watching right now is the blue wave which represent investors.  If this group starts to sell and go into fear or worst panic mood, this is where the market is going to be ........  Secondly, I will be watching closely on the US market.  On the other hand, I will be watching for any potential turning signal whenever it come to support level.

STI, same the Taiwan market.  Combat engineer failed to lay the bridge across.....panic sell down by the retail traders.  Things to look out for - action from investors and the US market.  Flip side, look for signal at the support level.   

Now, let's look at the Europe market - DAX.  It filled the important magnet 9700 gap.   It halted for the time mean.  If it continue to fall, I will be watching at 9500, 8967 to 9125 gap and 8700 support for any potential rebound signal.  On the down fall, I will be watching closely on the US market.

Now, our big brother US market.  Let's pull out the DOW charting.  DOW faced pressure whenever it come close to 18350 peak.  The rainbow wave is squeezing.  How long it can stay inside there?  Will it rebound or will it break through the last section, blue wave.  We may have a answer soon.

Top side, we know pressure.  What about if it break down?  US election year, will FED save the market?  They will not.  FED will only save the market when.......  Look at the chart and see yourself, when the market came down fiercely, where it hit and rebounded?  How many times that happened?  That area is a super important support level.  Remember that.

Knowing and respecting the big brother.  When they sneeze everyone feels the chill.  Boiling the "ba ku teh" soup continues.  How the soup and "ba ku" are going taste and look like, you figure out.  温水煮青蛙, market is squeezing you piece by piece. 

You trade what you see and not what you think.  Don't listen to others.  Don't listen to what others said oh today down because of Japan, tomorrow market down because of China......next day up because the non-farm number was........down because China import number........ Don't follow to swing with all those stupid news and rumours.  Don't follow and dance too much with those numbers. 

Today market is mend for trade.  Do your own homework.  Learn how to see market differently from the majority.  Learn to understand and recognise when and which piece of info and economic data really come into play. 

Shooting star at level on EUR/USD triggered

Markets are either at support level or the resistant level

Some experts and analysts called for short/sell, some called for long/buy.  So should I sell or should I buy?  Market itself, one moment up 30 tics, another moment down 30 tics or today up more than 1%, tomorrow down 1.5%.  Retail investors/traders became so confused.  They were lost.  They didn't know what to do?

Let me show an example - DAX, that happened just a moment ago.  Morning gap down, down 97 points, Half an hour later, market turned around, up 89 points.  This market has been behaving this way for weeks.  And this was what I hinted to everyone on 22-March, watch and enjoy how the game plays, the earlier big boys are alighting. 

Let's look at where the 3 major markets are right now.  DAX is currently at the big boys first important support level.  Asia Taiwan is currently challenging the 200MA.  Where else US DOW was halted by the 17800 resistant level. It is not too far away from the 18350 Everest peak.

So you can see, the market is at either at the major support level or the resistant level.  In order for the market to continue north, we need the third batches of the big boys to come in, to take over the baton.  Commando and Guards had done their jobs.  We need the Combat Engineer to lay the bridges for the infantry to cross over.  If they don't or it failed, that's, game over. 

Once again, do not listen anyone.  Those who tells you either buy or sell, they are juts guessing, predicting.  By all means, nobody know where the market is heading, provided they are the combat engineer.  Good luck and continue with the game.  Do your homework and trade what you see and not what you think.

Taiwan market needs a "Change Hand / 洗盘"

Remember on 2-Mar, I mentioned that Taiwan index will test 8800 YMA ?

We saw that on last Thursday.  It broke 8800 but closed below 8800.  Finally on Friday, it closed above 8800.  Yesterday, second day closed above 8800 but then this was something we need to take note off - market ended with a black hanging man at 8800 YMA and the major 8860 resistant level.

In order for Taiwan market to move further north, it needs a successful so called "change hand" to take place.  Chinese, we called it 洗盘。What does that mean and how does it work?  Let me give an example of a bus loaded with passengers reached interchange.  What we expect/hope to see is this - passengers alight and boarding.  And for the bus company to be profitable, they need enough boarding  passengers to cover the alighting passengers. 

So YMA is the interchange.  The earlier big boys are alighting.  And for Taiwan market to move further north, they need another batch of big boys to step in to take over this baton.  If it don't, I believe everyone knows, what will happen.  Watch and enjoy how the game play.   

ECB cut interest rate, expand QE

Once again, the "ba ku teh" story.  Not salty, add salt, not spicy, put more chilli powder and pepper, not enough water, add more water.......this is what exactly happening now, adding ingredient after water, water after ingredient.   

Yesterday, ECB showed hand.  They cut its main interest rate from 0.05% to 0% and cut its bank deposit rate, from minus 0.3% to minus 0.4%.  The bank will also expand its quantitative easing programme from €60bn to €80bn a month.  And the bond-buying programme will continue at least until the end of March 2017.

During Draghi speech, euro dollar fell, stock and future market spike.  An hour later, they went the other way round.  Example of DAX which gained around 3% became negative 3%  We saw analysts came out to say.......oh because of this because of that......... 

Let's take a look at past history.  The last time Japan reduced their rate, market responded negatively.  The last three times that China reduced their interest rate, market responded negatively as well.  It seem like market (investors and traders) is sick of all the interest rate game. 
 
What about QE?  Whether was US, Europe or Japan, as long as QE, their respective market took new height/high.  What about this time round?  Like the past, positive and take new height?  Or market is becoming sick of all this game?

What we saw yesterday, the spike and then turned around, euro dollars fell and then U-turned up, those were just how the big boys moved the market around.  Big boys wanted to buy and they need seller, wasn't it?  When you know another set of money is coming into the market what will you do?  Buy or sell?  If everyone buy, where the seller come from?

Next question, how long the possible rally may last?  Will the respective market take new height?  Not forgetting our big brother, 15 and 16-Mar FOMC.  I don't think Janet Yellen is going to say US is going to raise another 0.5% interest rate on end Mar or so......nevertheless I still want to be on guard, in...case..... And of course, the other one, 20-Mar oil producers in and outside the OPEC exporting countries plan to meet in Moscow to discuss an output freeze. 

Most important, monitor the big boys closely.  The coaster ride will continue.  Anytime, anything can happen.  Know what you are doing. Do not listen to other.  Enter a trade with good reason.  Define your cut loss and of course knowing when to take profit.  A lot of investors know how to buy but do not know how and when to sell.  Profitable trade become.......buy at $10, sell at $3.  So not forgetting this - knowing when to sell is more important than knowing when to buy.   

ECB, FOMC and Oil Producers meeting in Moscow

Markets fill with "GREED".  Everyone is looking forward, the politician will save the markets. 

Couples of important meeting over the next 2 weeks.
1) Tomorrow 10-Mar, ECB meeting.  Expect more stimulus and lower interest rate...
2) 15 & 16-Mar - FOMC. Expecting FED will not raise interest rate.......
3) 20-Mar - Oil producers in and outside the OPEC exporting countries plan to meet in Moscow to discuss an output freeze.

The big boys already stand by.  The outcome from ECB, FOMC and the oil producers meeting n Moscow will affect the markets direction.  Anything can happen, please trade with care.  Know what you are doing.  Define your cut loss.  When market goes against you, make sure you act without hesitate. Never challenge the market.  Trade what you see and not what you think.  And enjoy the show / ride. 

One of the TA tactics

Recently, numbers of mine friends, neighbours......asked me these - can I buy.....this stock, that stock at......, should I sell .........at ............   Well I trade what I see.  Whether I long or short, I have a specific reason of entering a trade.  I don't follow the crowd. I don't listen to others. 

Let me share with everyone how I catch the recent turned.  Since Taiwan had been leading the market movement over the past few months, I shall use them as an example.  And same as usual before I look the actual index, I always study their Future movement.  Therefore, the chart that I am going to show you is "Tawan Index Future".

1. The market started coming down in early November.  The downside trend was - down, consolidated, down again, then rebounded and finally third wave down all the way to point number 2.

2. A white long candle which we have not seen for months.  Market opened - a scary and panic gap down.  But end of the day market closed high with volume.  This was what I called a typical buyer commitment.  Who were the buyers?  You and me?  No way.  It was the big boys who came in. 

3. Few day later, we saw another long white candle.  And again with volume.  Buyers - you and me?  No!.  Once again the big boys.

4.  Next day, market gap up and closed high.  Unfortunately, next 3 days, market end lower.  The trick was here.  Yes, all the 3 days opened with panic gap down, but when you take a closer look at the candles,  they were all white spin top candles.  It told me that someone was supporting the market. 

5. Came back from CNY.  Taiwan closed 10 days for CNY.  Remember what happened to that 10 days.  Market opened with a panic gap down.  But end of the day what happened?  Market closed positive 3 point.  Who were buyers?  Retail?  Ask ourselves, how many of them dare to buy at that moment / on that day?

I hope my sharing benefit everyone.  Next time when you encounter the similar situation, you know what to do.

Whenever you feel/think that the market 完蛋了, the hope and greed return.

So far how's the rebound?  Did you make money from the recent rebound? 

Let's pull out some charts to look at how the rebound went on different regions and markets.

Taiwan was the strong market amongst all.  Natural disaster, Taiwan earthquake.  They closed 10 days for Chinese New Year.  US and Europe markets tumbled during that 10 days.  Back from CNY, first day market opened - wide gap down but end of the day it closed 3 point positive.  Moving forward, Taiwan market crossed 50MA, 100MA and YEC.  High chance that the Taiwan market will test YMA which is around 8800 point. 

Shanghai market, rebounded like a tortoise.  Crawling up slowly, small step one after the other.  However on 25-Feb, with only 3 days, it wiped out all the steps, back to the base camp and formed a double bottom.

STI, a different set of rebound pattern.  Trading sideway for almost 3 weeks before it rebounded 50% of its bae camp.

Europe market like DAX and CAC, it rebounded, then came down again broke down, formed a typical lower high lower low and now it rebounded again and about to test the first lower high resistant.

US market DOW, rebounded then came down to form a double bottom.  Last Thursday it broke up.  Already 4 days stayed above the resistant level. 

Recap, analyse and prepare:-
When market started to plunge on Y2016 opening, we saw the so called experts, analysts.....telling investors not to worry..........  However when markets continued to trade further south on second and third weeks, all these analysts and experts started to tell people sell, sell.....and there was where I saw the sign of market was about to rebound. 

Some bullish experts went missing when market continued to pour down.  However, last week I started to see couples of them came back and their called was don't worry buy on dip.  Today, we have a mix group of analysts and experts called.  So who should or you want to listen to? 

Recently I have someone asking me, recently they bought OCBC at $7.40 because of ....... and they planned to keep the stock for 2 to 3 years.  By then the price go up .......  They asked for my opinion.  And also asked me did I buy?  Well......... experts had given them the advice.......what else can I say?  People just want to hear something that they like to hear, so I wished them good luck. 

As I have been always said this - don't listen to others, do your own analysis and homework.  There is no such thing as easy money.

Today market unlike 2009 crisis which came fast and fierce.  I mentioned this since early 2015 today market is like 温水煮青蛙 (I even gave example of boiling a "ba ku teh" soup).  The market will tear you piece by piece.  Ask yourself, since 2015 how many times you seen this - whenever you feel/think that the market 完蛋了, the hope and greed return.

Low interest rate.  Countries like the Europe, Japan.....are printing money.  So where do all these funds go?  Yes, the investing market.  The funds move from one product to the other product, one region to the other region. 

I also keep saying this - today market is mend for trade and you trade what you see and not what you think.  Big picture, the Europe and ASIA markets are inside the bear territory.  What I am seeing now is a rebound.  As you can see, there are many different ways/patterns of rebound.  Basically a rebound plus consolidation can take 2 to 3 months or even longer.  I am watching the US market.  She has not fall inside the bear territory yet.  When she does, there is where the second game begin.

Beside that I am watching how the analysts and so called experts.......retail investors/traders call/react to the market.  Big boys are going to use the whatever economic numbers, politician involvement like the interest rate, QE, policy........to move the market around.  So trade what you see and not what you think.  Never think that you are smarter than the market. 

Did you see the rebound? Did you see how fear and panic........?

Did you see how the big boys create fear and panic?
Did you see how rebound take place especially on Friday?
Who lead this rebound?

Once again Taiwan market took the lead.  The rebound took place on Monday.   Fear and panic also took place on the same day. 

Monday Taiwan opened with a gap down of almost -2%.  Then it continue dive south.  Around noon hour, it turned and went straight up, closed high with a whole day range of 207 points.  Next few days, roller coaster ride continued but it did not go lower than its Monday low which was 7627.  And Friday it followed other indices, closed 2% higher.

US DOW has a hammer on Wednesday.  Thursday confirmed and triggered.  However, on Wednesday before that hammer was formed, at one point, DOW dropped by 500 points.  This was how fear and panic was created by the big boys. 

Japan Nikkei, the champion on Friday rebound.  Up 5.88%.  Hang Seng, Friday up 2.9%.  DAX up 3.1%, FTSE up 2.19%......

How I know rebound is going to take place?  And how I know before any rebound take place, the big boys will create fear and panic to scare off the retail investors/traders?  Two weeks of dipped, I started to see analysts, expert, articles everywhere........even Chinatown, coffee shops uncles and aunties......everyone shouting to "SELL" ..........  So everyone sell then where the buyers come from? 

This is the trick - people use to listen to others and follow the majority.  Investors/traders - 90% losing money and only 10% make money.  So now you know why?

How long and how far this rebound will last/will? 

As I mentioned in by last 2 posts:
Now, people start asking - rebound, that is the case can we start buying now?

It is a bear market right now.  Papa bear is pounding on the tire bull.  As I mentioned twice in my blog, any rebound is a  逃命反弹.(http://achua138.blogspot.sg/2016/01/here-comes-papa-bear.html).  Any pull back is an opportunity for you to sell if you are holding any long position.  Until now, I don't see a way that the markets has a chance to go back to its peak.   

Then another group of people ask me - they know only the usual way - buy first then sell.  So they are waiting to buy on rebound 反弹.  And of course, some of them,  do not has any position right now and they are looking to make some money on the rebound. 

I have a piece advise to this group of traders/investors.  Rebound, can be a pull back or retracement.  We won't know the distance/length of any rebound.  The pull back can be 23%, 38% or 50% or 61.8%.  Shorter than 23%, it could be a retracement instead of pull back.  

Therefore before you enter a trade, make sure you know where is your cut loss.  And make sure you discipline enough to follow the rules.     

It could be a short rebound........fierce rebound....... it could be a rebound plus consolidation.......  No body know.  Watch for signal and indicator at any resistant level.  Beside that, watch out for any political involvement or any surprise thing happen. 



One advertisement:- Our family teamwork has allowed our first Amazon Kindle E-Book launched.
Title: Memory Improvement

Those who have an amazon account, I/we would really appreciate your support if you could help to buy one book from us. After reading it, posting a good review on our book will also be much appreciated.

Appreciated your kindness support.

http://www.amazon.com/dp/B01AHOG29G/ref=tsm_1_fb_lk

Rebound

Last Thursday, we saw buyers commitment.  Major markets, opened with a gap down, dived further south but then closed high.  Next day, signal did not receive confirmation.  Global markets dived further to south.  US markets broke and closed at their first support level.  Now approaching its major second support.

How tire the bull is, he still have some breaths to give papa bear some punches.   Markets had gone down straight two weeks.  In some way, it need/will have a consolidation/rebound.  When?  I believe we are going to have the answer soon. 

Any done trade, there is a buyer and seller.  Both agreed with XXX pricing and the deal seal/wet through.  Now, everyone is calling to sell.  So if everyone sell then where the buyers come from? 

Before any rebound take place, big boys are going to created some fear to the retail investors.  And when they sell, the big boys will buy those tickets/contracts from them. 

This is how the game play.  So sit tight and watch the show.

Now, people start asking - rebound, that is the case can we start buying now?

It is a bear market right now.  Papa bear is pounding on the tire bull.  As I mentioned twice in my blog, any rebound is a  逃命反弹.(http://achua138.blogspot.sg/2016/01/here-comes-papa-bear.html).  Any pull back is an opportunity for you to sell if you are holding any long position.  Until now, I don't see a way that the markets has a chance to go back to its peak.   

Then another group of people ask me - they know only the usual way - buy first then sell.  So they are waiting to buy on rebound 反弹.  And of course, some of them,  do not any position right now and they are looking to make some money on the rebound. 

I have a piece advise to this group of traders/investors.  Rebound, can be a pull back or retracement.  We won't know the distance/length of any rebound.  The pull back can be 23%, 38% or 50% or 61.8%.  Shorter than 23%, it could be a retracement instead of pull back. 

Therefore before you enter a trade, make sure you know where is your cut loss.  And make sure you discipline enough to follow the rules.     

Market is always right.  Never challenge the market.  Today market is very volatile, just like the roller coaster.  Today up 2%, tomorrow down 2%.  Day, morning up 100 points, later down 100 points...............So trade what you see and not what you think.

One advertisement:-
Our family teamwork has allowed our first Amazon Kindle E-Book to be launched.
Title: Memory Improvement

Those who have an amazon account, I/we would really appreciate your support if you could help to buy one book from us. After reading it, posting a good review on our book will also be much appreciated.

Appreciated your kindness support.

http://www.amazon.com/dp/B01AHOG29G/ref=tsm_1_fb_lk

Here comes the Papa bear

Here it comes, the long waiting Papa bear.  Pouncing on the tire bull hard and fierce.  

Asia market majority down for the first four days.  On the fifth day it retraced.  Where else for US and Europe markets, for five days straight they closed in red.

Analysts, fund managers.........put the blame on China, because of their circuit breaker.  The circuit breaker caused panic to the sell down.  Policy shift by China regulators late on Thursday night helped to cool down Friday China market which has caused the global market to tumble?  Again was that true?  Absolutely nonsense.

Tuesday and Wednesday China market closed positive but all other markets closed in red.  Friday, China and other ASIA (except Nikkei) markets closed positive, where else the Europe and US markets closed in red.  So ask yourself, was it true that China was the spark that caused the fire.  Was it true that circuit breaker caused panic to investors and traders that lead to the sell down?

Have you seem index dropped by 15%, 20% and even as much as 27.5% in hours?  Have you seem a stock dropped by 70%, 80% and even 90% in a day?  Why the China market on Monday dropped so much as compare to the others and especially Thursday, just half an hour after the market has opened, the circuit breaker alarm was triggered?

Somewhere 3Q 2015, China yuan devalued.  It lead to the sell down on the China and global markets.  Starting from 8-Jan'16 major shareholders are not allows to sell their stock for six months.  The later policy caused the big crocodile to panic and they started to sell as many as their stocks as possible on Thursday, before 8-Jan.

Tension on Saudi and Iran was another reason that caused panic to the stock market as well as oil.  Nevertheless, these two areas, China and the tension between the Saudi and Iran were not the root caused of this crisis. 

As I mentioned, artificial everywhere.  Every countries were/are printing money.  Remember I gave this example:  (http://achua138.blogspot.sg/2014/12/y2015-is-going-to-be-volatile.html)  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?  Another word I used recently in Chinese 温水煮青蛙. 

And yes, this is the root caused.  Many things that happened over the past few years were artificial.  Money, bull charge........ we are going to pay a price on this.

Last Friday, I saw a lot of analysts came out trying to comfort everyone - don't worry, this is only the first week of Y2016...........this year the market is going to be better than 2015.....some even suggested to buy on dipped........recommended numerous stocks....saying how much undervalued on those counters......

As I mentioned in my last posted (http://achua138.blogspot.sg/2016/01/prepare-for-much-more-interesting-2016.html)  any retracement/pull back is an opportunity for you to sell if you are holding any long position.  In Chinese, I called it 逃命反弹.

I knew some of retail investors/traders listened to those analysts and trading representatives advice, they entered on Friday to long some of the recommended counters.  My advise to them is please know where is your cut loss.  When market turned against you and hit CL, make sure you cut and don't wait until it drop another 50 tics, 100 tics.......by the time you sell, the market is about to turn.

Sit tight, tighten your sit belt and enjoy the ride. 

Prepare for a much more interesting 2016

We come to the end of Y2015.  Beside Japan Nikkei and China Shanghai and Shenzhen, other major ASIA markets closed below Y2014 YEC.  Recently I mentioned couple of times that "Once again Taiwan took the lead........" I shall pull out Taiwan's charting, study their up coming election to analyse how their market may progress.

Taiwan introduced their first direct election in May 1996.  Lee Teng Hui (party: Kumintang) was elected.  He continued his president journey back since Y1988 to Y2000.  KMT (Kumintang) lost the election in Y2000.  Chen Shui Bian from Democratic Progressive Party (DPP) held the president helmet from Y2000 to Y2008.  Then in Y2008 election, KMT candidate Ma Ying Jeou won back the battle to became the third elected president for Taiwan.  He was also the first president for Taiwan meeting up China President Xi JinPing in Singapore since Y1949.

Now, we go to the chart and look at how the election result affected Taiwan market.  Y2000 election, KMT lost to DPP.  Market crashed.  And Y2008 election, DPP lost to KMT.  Once again, market crashed.  So what about Y2016 election?  Who will win the battle, KMT or DPP?  Will market crash, repeat on what had happened in Y2000 and Y2008?  

According to survey, there is a chance that the DPP will win the battle.  Now we take a closer look (zoom in) at the charting in Y2000 and Y2008.  Infact, market started to tumble months before the actual election and hand over took place. 

Now, we look at how market respond to the up coming Taiwan January 2016 since survey result showed that DPP could win the battle over KMT.  We saw Taiwan market started to tumble in somewhere May 2015.  It came down right from the top of 10014 points to August 7203 points.  Losing 2811 points or 28% in 3 months.  Then it had a pulled back (some cd it upside - buy/long) to 8871.  Whether it was a pull back or somebody called it upside, buy/long opportunity I called this as an opportunity for you to sell if you were holding a long position.  In Chinese, I called this as 逃命反弹.  Why I said that?  Look at the thick blue lines that I drew on the chart.  Those who know about "Elliott Wave" what do you see?

Two more weeks into the Taiwan's president election.  There were/are two forces out there - one is the sell down and the other is fund from XXX to support the market from melting down so as not to let the market looks ugly before election take place.  Who will win the battle?  Sit tight and enjoy the battle. 

Let's us look at other ASIA markets.  US raised their interest rate.  The projection for the US interest rate is 1.375% by end 2016, 2.375% by end 2017 and 3.25% by end 2018.  If I will to use the 2016 number, every quarter, we are expected to see a 0.28% increase on the US interest rate.  As I said US rate hike is non-favourable to ASIA and emerging markets as fund will flow back to the US.  In other words, I am not favourable toward ASIA markets.

I knew that a lot of retail investors (me too) received messages whether from their trading representatives, fund mangers, analysts........asking them to buy/long, we started to see positive sign right now.  Well, until now, I don't see any reason STI could go to 3550 (Y2015 high) or even hit 3906 (Y2007/history peak). 

China, the only ASIA market that I was not shortening it.  SSE reached the height of 5176 in mid June 2015.  A 160% rise from its psychology support level in just 10 months.  Then it tumbled 45% to 2850 low in August 2015.  A lot of analysts, fund.....said that China market is gone, economic is weakening, stay out from the China market. 

I see those coaster ride and commends differently.  When SSE raised 120%, I mentioned in my blog - "Watch out.........as it has gone up too fast and too steep.  How it gone up, how it will come down."  When it came down to 2850, I mentioned that 3000 to 3500 will be an ideal range for SSE.  Over the past four months it has been trading inside this range. 

Where else for the China economic, I don't see it was that bad as what many analysts called out.  To me, today China economic numbers is more trustable than years back.  Where else on the flip, I am worry about China market.  He is not the big brother.  Fund managers, analysts.....believe that their economic is weakening.  Big players, big boys.....may sell down China market when.......    

Let's look at Europe market.  With the helped of ECB injecting €1.1 trillion (£834bn) into the ailing Eurozone economy / buying €60bn bonds each month from banks, DAX and CAC above Y2015 YEC.  According to initial planned, ECB buy €60bn bonds each month from banks until end of Sep 2016, or even longer.  So does that mean the European market will continue bullish until Sep'16 or even longer? 

Let's look the European big brother DAX index charting.  Look at the thick blue lines that I drew.  What do you see?  DAX reached the peak/history high of 12390 in mid April.  After that, she came down with a din-don path and reached 9325 in end September.  Later it pulled back up to 11430 with the hope of more QE to be announce by ECB.  However the announcement from ECB disappointed everyone.  Will ECB have more QE in term of expand, extend........?  US rate hike definitely put some pressure on the Europe.

Big brother US ended with mixed results.  DOW and S&P closed below Y2014 YEC where else NASDAQ closed above YEC.  58th quadrennial US presidential election scheduled to take place in 8-Nov'16.  The primary elections and caucuses are scheduled to take places between February and June 2016. 

Whoever step down for sure wish to retire with pride and respect.  Does that mean the US will continue bullish and hit 20000 points for the DOW?  I foresee a similar approach but different version to the US markets. 

Prepare for a rougher ride.  Sit back, sit tight, a much more interesting 2016 drama is on the way.  温水煮青蛙 - commodities down, gold down, oil down...........the follow by ......the game has began.