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. 

Count down last FOMC for Y2015

Count down, the last FOMC for Y2015.  Will US raise their interest rate? 

Base on psychology approach (as I kept mentioning over the past few months), recent ECB approached on their QE, Japan........there is a high chance that FED will announce their plan and timeframe on their first rate hike since 2009.  When this happen, how will market respond?

As I mentioned on 11-Dec (http://achua138.blogspot.sg/2015/11/once-again-taiwan-market-took-lead.html) once again Taiwan took the lead.  Repeat what happened in Apr'15 - gap up, gap up then followed by a black candle and then trend started to turn.  Weeks later, we saw other ASIA markets followed - STI, SETI, Hang Seng...........  Except for Nikkei and China. 

Japan is printing money, therefore she is able to hold up.  However, last Thursday, we saw Nikkei broke its higher low and Friday with a retest.  So watch out, it could retest and go.  For Nikkei to continue its up trend, it needs to trade above 19500. 

 

China government kept trimming their interest rate in order to boost its economic/GDP.  After the big dropped in Jun and Aug'15, China SSE was able to trade inside s sideway range even though how much other ASIA market has drilled.  How long can it hold?  Same as usually I like to look at their Future China A50 before I look at SSE.  A50, same as SSE - sideway.  Sideway range support 9800 and its major support at 8377.

Last 2 weeks, we saw Europe market followed.  DAX, FTSE and CAC.  Breaking their higher low.  Example of CAC, from the chart I see fear. 

What about the US?  Yesterday, we have some experts guru said that "forget about the bear, we are still in the bull......short seller will find themselves scrambling for their lives........."  Well......???  On big picture, yes 2the US market is still on bull but it is very fragile.  Look at the chart of DOW, S&P and NASDAQ.  They have double top and last Friday, it closed at its first importance support level.

Volatile is back.  Market shake each time when it come to the decision (FED) of rate hike.  Raising of interest rate is non-favourable to ASIA and emerging markets as fund will flow back to US.  Artificial everywhere.  温水煮青蛙 next crisis surface is going to be worst than what we saw in Y2008/Y2009.  Today market is mend for trade.  Learn to short the market instead of just long/buy. 

Taiwan took the lead and now.........

China Shanghai index broke the short term upside by breaking the inclined parallel line.  Its future China A50 broke the inclined parallel lines on the same day.  Watch for supports for the time mean.  What if it continue to broke one support after the other?  For SSE 2850 is a major, strong and important support.  China A50 is at 8377.

Hang Seng filled gap and currently is at the important support level. 

What about STI?  This market is definitely on down trend. 

 Important ASIA indices, beside Japan Nikkei, most of the markets are in bad shape.  Next 3 months, we are going to see some interesting move not only from the ASIA.  Enjoy. 

Once again Taiwan market took the lead

Taiwan Future repeated what happened on April - gap up, gap up then followed by a black candle and then trend started to turn.  Yesterday, it broke disagreeing trend.  Today it broke higher low and closed inside the major trend line. 

Taiwan index, same as Future except it has not closed below the major trend line.  It is challenging this major trend line.  Confirmation, look out over next two days. 

 

Christmas rally?

Some said it is time to buy....some said long term down trend and short up trend.......some said correction is over don't miss this opportunity........Christmas rally..........Singapore property has already bottom.........

In general, markets came down between 16% to 44%.  Not surprising, mature markets came down lesser than the emerging market.  Difference on the down side in term of percent, happen not only today, ten, twenty years back was this way, 10 years from now will still the same.  http://achua138.blogspot.sg/2015/08/why-asia-market-tumbled.html

As I said - first time in history, bull charge for more than 5 years.  He was tired and the mama bear took the opportunity to pound on him.  Nevertheless, the bull still has the last breath and he will fight back.  And that was what we were seeing over the past few weeks.  How far can he goes? 

I mentioned that - with politician involvement, the market is not easy to foresee and predict.  Past one to two months, I saw lots of retail investors/traders chose to stay out.  We saw market went down and the up like coasters.  Experts said that it was because of the US, FED will not raise their interest rate in October, in Y2015.  Why?  Because of the poor monthly data numbers.....

Those were only an excuses and 骗人的借口.  The person who really moved the current going around were the fund, institution.......Lousy PMI numbers, lousy non-farm numbers........if someone is going to tell me those numbers are great as it means that interest rate is not going to raise.  You know what I am going to ask him/her?  Continue to have those poor numbers for 3 months, then you continue to tell me oh good........  Common sense tells us whether those lousy numbers are from the US, Europe, China.....or anywhere, what does that means?  Something wrong is with their economic, isn't it.  Then what the expert going to say next?  Oh another QE?  You will come to a day where people is going to be sick of that QE.

First time in history, country after country are printing money.  Interest rate close to zero.  The next crisis going to come, won't be that easy as what we think.  Now, those people who save their money inside the bank is stupid, right?  Why?  Because of depreciation, inflation........  Inflation really at 0.1%, 0% -0.1%.......you better know how this number was calculated.  Your daily expense, a plate of chicken or a can of baby milk powder, how much it cost in 5 to 10 years back compare to now?

Concern and worry about China economic growth.  That's only one part of the story.  As I said knowing and respect the big brother.  Janet Yellen knows the consequence of raising interest rate when everyone is printing money.  What she was doing was to buy time and doing something which called psychology approach.

Today market is mend for trade.  You will continue to see the coaster ride.  Whether the bull will bring us to another peak or papa bear will pound on him before he exited the peak, I know only one thing, the market is at current situation - refer to the chart.  The Y2007 scenario. 

As for Singapore property bottoming up, is time to buy?  Refer to my past posted - http://achua138.blogspot.sg/2015/08/singapore-property-market-really-bottom.html.  You are going to see housing rental, office rental, industry rental coming down, private property................http://achua138.blogspot.sg/2014/01/hdb-resales-price-falls-for-first-time.html.

Careful on Taiwan Future - an exhausted gap has just took place

How fast and far interest rate moves is more important than the first raised

Another no outcome FOMC.  Like what I said - Janet Yellen knows the consequence of raising interest rate when everyone is printing money.

Is really no good when we have too much of "The boy who cried for the wolf"  Interest rate definitely needs to raise.  What Janet did now was to buy time.  Timing of raising the interest is one thing.  Most important is how fast and how far the interest rate moves after the first raised.

Traders and investors, we just need to be on guard and trade what you see.


************************  CONTINUE WRITING - PART 2   ***************************

I did some researched on the weekend.  Instead of opening a new file, I decided to continue writing it inside this "How fast and far interest rate moves is more important than the first raised".

As I mentioned, Janet knows the consequence of raising the interest rate.  She not only buy time but she was doing something which I called "psychology game/approach". 

When Yellen announced FED is not going to increase the interest rate, US market gone up higher.  However, an hour later before closing, the indices slide down with an approximate angle of 75 degree.  Next day (last Friday), Europe and the US continued to fall.  Europe 3 major indices came down around 1.4 to 3%.  US declined with an average of 1.45%. 

Past one months, global market falls because of fear.  Fear on US may raise the interest on September.  But last 2 days, market fall was because of uncertainty. 

Investors, traders, fund.........hate uncertainty.  Watch how global market react over the next few days/weeks.  If market continues to fall, this is where the so called psychology approach comes in.  At that time, when US starts to raise their interest rate, even there is an impact on the equities market, it won't be that great.  And don't be surprise, market may welcome the approached as a clear signal that people has been waiting for has finally surface.

Next question is - how fast and how far the interest moves after the first raised.  The is very important as it is going to affect not only the equity market but also the future and property market.......