STI closed at 3167. US stocks, star of the year. What about 2014?

We see another roller coaster ride by STI before the end of 2013.  Today STI closed at 3167.  Remember I said that “Down, down, down….I like it” and I highlighted a few trending pattern on the charting on 12 December (http://achua138.blogspot.sg/2013/12/down-down-downi-like-it.html).  I also posted a STI chart showing only one indicator which was the 2012 YEC and I mentioned to watch out for this number together with the December window dressing (http://achua138.blogspot.sg/2013/11/sti-watch-out-yec-and-window-dressing.html).  知己知彼。  This is how the game been played by those fund managers.    

Finally we come to the end of 2013.  We see a great performance on the US equities markets.  However for ASIA, beside Japan, countries like China, Hong Kong, Singapore…..were under performance.  Especially STI, it was one of the worst performance index amongst the ASIA indices.  What happened to STI? 

Over the past two years, we have seen numbers of “first time” incidents in 40 years that happened in Singapore.  Like the result for the two bi-elections, strike that happened earlier this year which involved bus drivers from China ……to the recent riot at Little India.  Our government acknowledged all these and take it very seriously.  We saw couples of actions being taken by the government.  Whether it is reforming or restructuring, the beginning is always tough and painful.  But if they do it right, in long term it will benefit the country as a whole.  China is also going through a crucial stage of restructing.  And that was why we see a similar situation happen to China equities markets too.    

So what about 2014?  Why I keep saying next year小心， 小心再小心。 Majority of the economists and analysts think that it will be a great year to both economic and stock market for 2014.  Half of the traders and investor see it differently.  So what about myself?  How I look at it?

When talk about stock market, I like to look at our “Big Brother” US DOW.  When it up, some might follow, some might not.  But when it sneeze, everyone feels the chill. 

Because of the tapering, we used to see good economic numbers as bad news and bad economic numbers as a piece of good news.  But today, we already know that the tapering will be kick off in January 2014.  So how do traders, investors, fund managers…….going to response to the December economic numbers which will be released over the next two weeks?  Look out on that. 

Next, watch out for March.   In history, US market from its lowest to its highest peak, the time frame were 5 years.  Global markets crashed in December 2007.  DOW free fall all the way down to 6400 in March 2009.  From March 2009 to March 2014, it is exactly 5 years.  To understand more, you may visit (http://achua138.blogspot.sg/2013/08/dow-close-to-5-years-bull.html).

If nothing happen to March, look out for May.  There is a curse “Sell in May and go away”.  Over the past 3 years, there wasn’t any exceptional case on this. 

What if nothing happen and the global equities markets blooming like sun flower…..all the way to June and everyone goes wild and crazy.  If that happen, you better put on your parachute before others do so.  We shall discuss about the second half when the day comes nearer. 

Today, DOW is trading at a PE ratio of 20 times.  It can be quite fragile.  Any bang on it could cause the glass to either crack or break.  Base on TA, whether I am looking at 6 months chart or 15 years charting, DOW has formed an Opera House pattern. 

January tapering is only the beginning of the game.  After this first round of tapering, what’s next?  This topic of tapering will be back again.  10 years US Treasury, now standing at 3%, commodities price will stay low for even, you think gold price has already bottom, you think properties price will stand firmly there with those governments cooling measures………….interest rate, inflation……. Game has just begun.   

Stock market move ahead of economic.  Stock, gold, currency, interest rate…….property, they are co-related with one and the other.  Today, the world is fill with “artificial sea of liquidity”.  With politics involvement, if the glass break, it can be worse than year 2008.  Major correction has not took place for quite sometimes.  So trade with care. 

Do not follow the crowd.  If you want to, make sure you get out earlier than anyone else.  And do not listen to others whether he is an economists, analysts ……or even Warren Buffett.  Do your own homework.  Lastly, monitor the fund movement.

 

Halcyon - remember I called for shooting star?

11 difference between dating and marriage

 

Finally FED annouced that it would start tapering in January

Remember on 8-Sep I said this:- “…….given the way on how Ben Bernanke handle the stock market, I believe the first round of tapering will kick off before Ben Bernanke step down/retire.  The questions is how much will be push out for the first round of tapering.  If the numbers is minor, lesser than economists predicted, market may move up instead of going down.  However, a major adjustment will cause the market to tumble.  Having say that, Bernanke wouldn’t want to become 历史罪人…….”

Economists, analysts………made use of this tapering, pushing the market high and low.  That’s the reason why I kept saying “prepare to ride on roller coaster”. 

I kept saying to watch out 17 to 18 December, the last FOMC meeting under the leadership of Ben Bernanke.  And finally Wednesday18-Dec, we saw the announced by Federal Reserve that it would start to taper its aggressive bond-buying program to $75 billion a month beginning January. 

Treasury bond purchases to $40 billion and mortgage-backed securities to $35 billion a month, both reductions of $5 billion.  Fed also stressed that this doesn’t mean interest rates will rise.  Ben Bernanke even said that he consulted closely on the decision with incoming Fed chief’s Janet Yellen.”  And “She fully supports what we did today.”

Immediately after the announcement, gold dropped by $20 and went below $1,200.  US 10 years Treasury went above 2.9%.  DOW and S&P broke another record high.  So what next?  Will DOW reaches 20,000 as some of the economists and analysts predicted?

Remember I mentioned about gold when it fluctuated between the ranges of 1300 to 1400.  I said that gold has not bottom yet.  What about now at 1196, already bottom?  My answer is still the same “no”, there is room for gold price to go down further.    

Those who are buying/holding REITs, watch closely on this 10 years US Treasury.  These two are like a see saw.  One sitting on this end and the other sitting on the other end.  If Treasury broke 3.5%, it won’t be good for stock market as well. 

DOW to reach 20,000.  As I mentioned previously, I am not convince with this number.  Bases on my calculation, the resistant level for DOW is 16,400.  If it break 16,400 the next level that I will be looking at is 16,800.  Base on TA, DOW has formed an Opera House.   

6.5-percent unemployment and 2.5 percent inflation rate before implementing a hundred percent exit for its $85-billion-a-month bond-buying program.  How will Janet Yellen going to handle the tapering. Will she follows this guideline which was previously set by FED. 

Tapering kicks off with only $10B and we see Gold drop, Treasury up, USD up, numbers of ASIA countries encounter a significant drop in their currencies, fund started to move………….the game has just started.  It is going to be interesting.  Once again, today equities market is mend for trade.  And next year 小心，小心，再小心。

Halcyon - Shooting star at level

Tiger Flying

 

SembCorp extended its wastewater treatment business to Caofeidian Chemical Industrial Park in Hebei province, China.

SembCorp will be developing a new industrial wastewater treatment plant in the Caofeidian Chemical Industrial Park in Hebei province, China. 

Through its wholly-owned subsidiary, Sembcorp (China) Holding Co, the company has entered into an agreement to set up an 80-20 joint venture with Tangshan Caofeidian Yongtai Industry Co, a wholly-owned entity of the Caofeidian Industrial Zone Administrative Committee. The joint venture company, Sembcorp Caofeidian Water Co, will build, own and operate an industrial wastewater treatment plant to serve customers in the chemical industrial park. Targeted to begin operations in late 2015, this wastewater treatment facility will have an initial capacity of 10,000 cubic metres per day and have advanced capabilities to treat high concentration industrial wastewater and high oil content industrial wastewater. 

The Caofeidian Chemical Industrial Park is a petrochemical and coal-to-chemicals industrial park that is part of an industrial zone enjoying strong support from the central government. Strategically located along the coast of Hebei province, it is also at the centre of the Bohai Bay Economic Rim, widely considered one of China’s three centres of economic growth alongside the Pearl River and Yangtze River Deltas. The chemical industrial park has close proximity to Tangshan City, which is rich in coal and oil, as well as to a deep water port for the transport of crude oil, coal, iron ore and bulk cargo.

很多穷人都有过梦想，甚至有过机遇，有过行动，但要坚持到底却很难。 面对生活中偶尔的不如意，要学会坚强的微笑。

有个穷人，很穷，一个富人见他可怜，就起了善心，想帮他致富。富人送给他一头牛，嘱他好好开荒，等春天来了撒上种子，秋天就可以远离那个“穷”字了。

 

 穷人满怀希望开始奋斗。可是没过几天， 牛要吃草，人要吃饭，日子比过去还难。穷人就想，不如把牛卖了，买几只羊，先杀一只吃，剩下的还可以生小羊，长大了拿去卖，可以赚更多的钱。

 

穷人的计划如愿以偿，只是吃了一只羊之后，小羊迟迟没有生下来，日子又艰难了，忍不住又吃了一只……。穷人想：这样下去不得了，不如把羊卖了，买成鸡，鸡生蛋的速度要快一些，鸡蛋立刻可以赚钱，日子立刻可以好转。...

穷人的计划又如愿以偿了，但是日子并没有改变，又艰难了，又忍不住杀鸡，终于杀到只剩一只鸡时，穷人的理想彻底崩溃。
 

他想：致富是无望了，还不如把鸡卖了， 打上一壶酒，三杯下肚，万事不愁。
很快春天来了，发善心的富人兴致勃勃送种子来，竟然发现穷人正就着咸菜喝酒， 牛早就没有了，房子里依然一贫如洗。 富人转身走了。穷人仍然一直穷著。
 

很多穷人都有过梦想，甚至有过机遇，有过行动，但要坚持到底却很难。
 

据一个投资家说，他的成功秘诀就是：没钱时，不管再困难，也不要动用投资和积蓄，压力会使你找到赚钱的新方法，帮你还清账单。这是个好习惯。性格形成习惯，习惯决定成功。
越是有故事的人，越沉静简单； 越肤浅单薄的人，越浮躁不安。
＂强者＂不是没有眼泪，而是含着眼泪依然奔跑。
 

人最先衰老的不是容貌，而是那份不顾一切的闯劲。
 

有时候：要敢于背上，超出自己预料的包袱，经历一段努力后，发现自己比想象的优秀很多。 

 

成功的人：一般不是才华横溢的人，而是，最能以亲切和蔼的态度给人以好感的人。
一个人，不能改变自己的形象：却能改变自己的气质； 一个人，不能达到理想的高度：却能提高自己的水平。
人际交往中：善良、热情、诚信更容易给人以好感。
微笑，比礼貌更亲切：会给人阳光般的温暖。
不是眼泪就能挽回失去； 不是所有人都值得付出；
不是伤心就一定要哭泣； 不是表情都要写在脸上；
不是任何人都能理解你。

所以：面对生活中偶尔的不如意，要学会坚强的微笑。有一句话：一切都有最好的安排一一只要你坚持！

Mexico to open the state-run oil fields to foreign investment for the first time in 75 years

Mexico's Congress has approved a measure to open the state-run oil fields to foreign investment for the first time in 75 years.  

The programme would let private firms explore and extract oil and gas with state-run firm Pemex, and take a share of the profits.

The measure must now be approved by 17 of the country's 32 federal entities.

Mexico nationalised its energy industry in 1938.

Thursday's vote to approve the measure lasted hours and was reported to be heated.

Mexico's President President Enrique Pena Nieto has said the move is necessary to modernise Mexico's energy sector and increase oil production, which has dropped from 3.4 million barrels per day in 2004 to the current rate of 2.5 million barrels per day.

Most observers expected that the signature reform of Mr Pena Nieto's presidency would pass.

However, the left-wing Democratic Revolution Party said it was a submission to US oil companies, and protest camps were set up outside the Senate.

CapMallsAsia

Keppel to build new CAN DO drillship by 2016

Keppel FELS Ltd (Keppel FELS), a wholly-owned subsidiary of Keppel Offshore & Marine Ltd (Keppel O&M), is proceeding with the building of its new CAN DO drillship. This drillship was designed base on positive feedback and strong enquiries from the market. 

 

When completed in 2016, the drillship is expected to be a state-of-the-art deepwater exploration, development and completion drilling vessel. The newly developed design is capable of handling next generation 20K psi blowout preventers. 

Most modern drillships currently in operation were designed and built for exploration drilling. CAN DO drillship is designed to overcome the constraints of limited deck space found in most modern day drillships.

Apart from incorporating exploration drilling requirements, the design allows for the installation of third party equipment invariably required for development and completion drilling through the incorporation of a large functional deck space. In addition, the drillship has a double blowout preventer stack integrated into the design, and has a riser hold capacity meeting 12,000 feet water depth with the flexibility of storing either 75-foot or 90-foot long risers.

 

CapitaComm

STI broke traingle, boxing and 3120

As I mentioned before, once STI broke 3120, the reversed head and shoulder will be no longer valid. 

Last Friday, STI broke 3120.  Not only that, it broke the boxing, closed at 3114 and with all day low at 3098.  Let’s re-analyse the whole STI trending.

Let see the 3 decline lines that I drew.  Base on charting, STI is on the down trend.  Having said that, 8 weeks and first time we see a white hammer appeared between the 2 support lines (3120 and the middle decline line).  STI could have a retracement.  And how far can it goes? 

STI has lots of resistant levels – 3200, 3230, 3250, 3280 and now with another decline line that also serve as a resistant for STI.

Support level – the middle decline line, 3050, 3000 and the bottom decline line. 

Base on trading and investment psychology, those resistant points that I mentioned above, do not take it lightly.  Window dressing, the white hammer and recent Christmas rally, hopefully could give a push to STI.   In order for the STI to really turn bull, it needs to break 3300.

US market, I mentioned that many times, as long as tapering date is not fix, the roller coaster ride will always be there.  Remember the 10 years Treasury Yield?  Today, it is standing at 2.86 %.  Watch closely on this.  The US is selling $64B of notes and bonds next week, and FED policy maker will be meet on December 17 and 18.  Index Future is going to slow down soon.  There we come the end of 2013. 

2014, there are many things to watch out for.  As someone that I highly respect 胡立阳老师 said "小心，小心再小心".  Keep reminding myself, the market today is mend for trade.  Whether is gold, property…..or the equity market, next year 小心，小心再小心.  

3 counters that I mentioned early last week - KepCorp, Noble and Wilmar, take profit.

Important strategy that every investor and trader should know - "Why Cut Loss / 背水一战"

Thanks Joseleen for sharing this. 

KepCorp - Profit taking

Noble and Wilmar - 上有埋伏, 下有追兵

These 2 counters are very interesting. Their incline trending got stuck over the past few days. 

Noble:-
Resistant at 1.115 and support at 1.08 base on incline.  Divergence formed.  Yesterday one long black candle stick.  Traders selling, investor still holding on.

Wilmar:-
Resistant at 3.64 and support 3.53 base on incline.  Divergence formed.  Shooting star appeared.  Traders took profit.  However, investors were still holding on, therefore some traders went in and tried to push the price up. 

These 2 counters are now at a tight range.  Would it fall into box trending, break up or break down? Look out for the next few days candle stick/price movement. 

 

China markets fell after regulators issued new rules for reforming the country's share sales market

Shenzen stock index fell 4% and Shanghai stock index dropped 1%.  China stock markets fell on Monday after the regulators issued new rules for reforming the country's share sale market over the weekend. 

 

People fears that the new listings might not leave enough cash in the market.  The rules are likely to see listings resume next year, ending a freeze that has lasted more than a year.

I look at it, the rules should be positive to the market especially in the long run.  An example of the key issues addressed by the new rules are "limiting the government's influence over the pricing of share offers and boosting transparency".  The securities regulator "would only be responsible to decide whether companies fulfil the rules". The "values and risks would be for investors and the market to judge".

 

US and Europe economics have lot of problems over the past few years.  Where else China GDP has been above 7% and it even overtake Japan to become the second larger economically country.  But if we look at the China stock market as compare to the US, German, France, London and Japan, they are far apart. 

 

The freeze on China IPO over the past one and the year has affected the market from advancing.  The investment fund in China has gone into property.  That's the reason why, no matter what cooling measured the China government implemented, the property price still continue to rise.  Thirdly, China stock market maturity.  Outsider is not allow to buy China share in the China stock market.  If it does, thing will be different. 

 

There are so many companies in China on queue, waiting for listing.  It is important on how China Securities Regulatory Commission (CSRC) control, carry out, review, conduct checks to ensure that information provided by the firms looking to list was full and accurate, transparent.....to approved as part of reforming the country's stock market listing system.supervision to the issuance process.  This is something that we need to watch out. 

STI - Watch out the YEC and window dressing

STI was weak as compare to the others

US market:-

Since Monday, DOW has been kept trying to break 16,000. 

 

Thursday, we heard the news on Janet Yellen is closer to become the next head of the US Federal Reserve after her nomination was approved by US Senate banking committee.  And her appointment is likely to be approved by the full Senate, which is Democrat-controlled.  The news sent DOW broke 16,000 and closed at 16,064 on Friday.  S&P also broke 1800 and closed at 1804 on Friday. 

 

Some economists and analysts are saying that DOW could go to 20,000.  I am not convince with the number.  August, I predicted DOW will hit 16,000 by end of this year.  This time, base on my calculation, I am more likely to look at 16400 as the next resistant level. 

 

Base on TA, I see a divergence on DOW and S&P.  MACD and Stochastic showing over bought.  Can DOW and S&P stand above 16000 and 1800 for 5 to 10 days?  Let’s see.  Take note that this week US has only 3.5 trading days. 

 

ASIA:-
I see 1 plus 2 long white bars and then follow by a 4 days consolidation for the Shanghai index.  The next resistant for Shanghai index is 2240 and 2270. 

Hang Seng had a double gap up and touched 23875 resistant with a retracement.  Hang Seng needs to break this resistant before we look at the next resistant at 24400. 

Nikkei 225.  It is a very unit index.  We need to monitor closely on "yen" to trade the Nikkei.  It gap up, broke the triangle, followed by a retracement and advance further.  15950 to 16000, that is like a high voltage electrical wire.  Watch out on that.

 

 

STI:-
There are numbers of STI stock which fall in box trending, triangle, support level and divergence.  Like Wilmar and Golden Agri, we see great movement on these 2 counter, but I am a bit concern as it has a divergence.  

The trading value for STI is pretty low.  Recent Asiasons, Blumont and LionGold hurt quite a number of traders/investors.  December holiday plus recent internet trading value control, traders were not so willing to pump in more fund into Singapore equity market. 

Therefore, STI is rather weak as compare to the others.  3200 has become a resistant for STI.  On Thursday, it gap down and broke the triangle.  Luckily, 3160 had shown a strong support for the STI. Now, I see 2 similar length hammers formed at the 3160 support level.  Can these 2 hammers revert the trending?  We need a CS confirmation.  Watch out on that.  

 

M1

Noble

Noble dropped from 1.08 to 1.015 (6%) after the released on its poor third quarter report.  However, an hour before the market close, we saw a huge buying, pushing the price up and closed at 1.05.  The next 2 days, we saw low selling volume.  In other word, big fishes are supporting this counter.  Now is near to its 1.025 support. 

Recently commodity stocks are moving.  Just like Golden and Indo Agri, went up even with a poor third quarter reports 

 

Stock Market is directionless?

A lots of traders, economists and analysts warned everyone to stay out, the stock market was directionless.  To me, I see some great movements over the past 2 weeks.  Just look at STI, broke 3200, came down and touched 3160 support and last Friday closed just above 3200. 

 

STI

Second week of October to end October, STI went up from 3120 to 3230 resistant.  Although index were up but if we look at TA, volume was low, 85% of CS were black candle sticks over that past 3 weeks.  That worried everyone.  Because of that, I kept saying market needs a pull back/retracement.  Finally, it happened.  Beginning of November, STI came down from 3230 to 3160 support.  Although STI came down, but again I looked at the volume, it was low.  In other word, it tells me that the big fishes were not getting out.  Since they were not getting out, why must I.  Just be alert and trade with care.  Last Thursday and Friday something happened to US and STI went back above 3200.

 

Today, if we look at the charting, STI formed a triangle.  Second week of October, STI formed an inverted head and shoulder.  As long as STI doesn't fall below 3120, the inverted head and shoulder is still valid.  But then on the other hand, STI recently also formed a head and shoulder.

 

US market

I see some retracement plus little consolidation in DOW.  Its broke record high one after the other.  Especially after Janet Yellen, the nominee chairmen of the next Federal Reserve, said that the central bank should take care not to withdraw stimulus too early.  It's important not to remove support, especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited given that short interest rates are zero.  Her statement shake the global equities market.  It seem like this lady works like Ben Bernanke. 

 

The charting now, show a step ladder on the recently up trend.  Last Friday, Marubouzu white showed up.  This Marubouzu white can be a double headed sword especially it appeared at that high level.   

 

China

Third Plenary Session had ended.  Immediately next day after the session end, China market plunged close to 2%.  Economists and analysts said that they were disappointed with the Third Plenary Session meeting outcome.  The detail has not out yet, but all these economists and analysts started to condemn the whole things.  Gentlemen, as a trader, I need to know how all these institutions, big fishes......how they trade.  Push down the price, hit the support, go in and buy.  Buy low sell high!

 

Analysis / Things to watch out

Dow - watch out for the next 2 days candle sticks plus 5 to 10 days movement/price action.

China -  more detail on the Third Plenary Session will be out soon.

STI - The next 2 week is a critical week for STI.  I would like to see STI broke 3230 to get away from the recent head and shoulder.  

Nothing goes wrong, DOW should be heading 16000 as I mentioned on 15-August.  China and Hang Seng should be interesting.  STI should break 3230 and toward it next resistant at 3250 and the next one 3280. 

Whatever it is, trade with care.  Today market is mend for trade.  Before you buy any counter, make sure you know and have a stop loss with you at all time. 

   

 

DOW Wednesday broke record high, Thursday down 153 point, then Friday up 168 point, can your heart take it?

DOW broke history high on Wednesday.  Down 153 point on Thursday.  Then up 168 point on Friday, crossed the previous (Wed) high.   How about it?  Can your heart take it? 

Since I started this blog in August, I mentioned that today equities market is mend for trade rather than invest, put on your belt and be prepare to ride on roller coaster.  June, the first correction for the DOW.  Then followed by August and then mid September.  Rewind back the past 5 months trending for DOW.  Do you realise something similar?  The pattern on how it went up and came down.  Yes, DOW 怎么样上 就怎么样下。That's why I said that last week "The pattern that DOW moved up plus its trading volume is not in favour.  It needs a retracement with consolidation.

This few days, traders are watching closely on China Third Plenary Session.  The outcome will affect the China and Hang Seng markets.  While we are waiting for the outcome, let's look at some of the economic data and politics action over the past one week. 

China:-

• Third quarter GDP 7.8% versus 7.5% in second quarter.
• Manufacturing PMI rose to 51.4 in October from 51.1 in September.
• Non-manufacturing PMI rose to 56.3 in October from 55.4 in September.
• Industrial output rose 10.3% in October from a year earlier, beating market expectation.
• Retail sales up 13.3% in October.
• Exports rose 5.6% from a year earlier, while imports jumped 7.6%
• Real estate investment rose 19.2% in the first ten months of 2013 from the same period a year earlier.
• CPI accelerated slightly to 3.2% in October which led by higher food prices.
• China needs o sustain an economic growth of 7.2% to ensure a stable job market, Premier Li Keqiang made this remarks on last Tuesday "We want to stabilize economic growth because we need to guarantee employment essentially." 

US:-

• Third quarter GDP 2.8% versus 2.5% in second quarter.
• ISM Manufacturing PMI rose to 56.4 in October from 56.2 in September.
• ISM Non Manufacturing PMI rose to 55.4 in October from 54.4 in September.
• Unemployment claims last week 336K versus 345K in previous week.
• Unemployment rate up by 0.1% to 7.3% in October.
• Non Farm employment change 204K versus 163K in September.
• FED Chairman Ben Bernanke said on Friday that there was still an "awful lot of slack" in the US labour market, but cautioned that economic data did not do a good job of providing an accurate measure.

Europe:-

• Eurozone factory order rose for a fourth consecutive in October with a Manufacturing PMI of 51.3 in October, up from 51.1 in Spetember.  Only France and Greece, out of the 17 countries that use the euro, failed to enjoy improved condition. 
• S&P down grades France rating from AA+ to AA

Analysis:

• China will not go back to double digit growth.  The Third Plenary Session meeting should be on economic reform, rather than economic planning.  Therefore, I am expecting to see some announcement from the central government exercise about price control and policy on banking sector.  Chinese parents are concern about the housing price in China.  Their worry and concern are similar to us.  Can their children afford to purchase a housing if estate price keeps going up. 
• As long as tapering date is not confirm, the roller coaster ride will always be there.  Traders will make use on whatever possible news and data to push the index high and low.   Therefore trade with care.  Know the S/R lines before you get in to the market.
• Europe is improving but all those outstanding issues are still there.  Watch them closely. 
• Last but not least, Middle East which has been quiet for quite a while.  Watch out for them as well. 

Happy trading.  As what I keep reminding myself  - do not be a goal keeper, catching stocks/counters that the professional traders and investors release.  Also trade with care.
 

DOW, Hang Seng, China Market and STI

On 10-October, I mentioned that DOW is a side way market.  Ranging from 15700 to 14760 / 14650.  18 to 20-October, I said to watch out for Shanghai and Hang Seng index which were approaching its resistant level of 2270 and 23650 respectively.  I also mentioned that STI shouldn't have a problem to cross 3200.  But 3230 will be a resistant to STI.  My warning and analysis turned out to be correct. 

See how powerful is the support and resistant.  When I was working, my colleagues used to ask me "can I buy this stock?"  Instead of telling them the answer, I asked them back "what is the S/R lines for this counter?"  A lot of retailer buy that particular stock because they heard someone telling them this is a good stock and that it can go up to certain price range.  And a lot time retailer buy at near its resistant level.  This is very dangerous.  Do not be a goal keeper, catching stocks/counters that the professional traders and investors release.  I mentioned this many times. 

Knowing the S/R lines is the first basic thing that a trader needs to know before he buy any particular stock/counter.  And it is also the first basic TA that he needs to learn before he goes into trend, triangle, hammer......and so on. 

The pattern that DOW moved up plus its trading volume is not in favour.  Its needs a retracement with consolidation.  Hang Seng, is going to test it 23650 again.  When?  Let's look at the other index/market.  Shanghai or I so called China market is waiting for its Third Plenary Session which will be held on 9 to 12 of November.  Economists and analysts have high hope on this.  Hopefully Chinese Communist Party and the People's Central Bank won't upset anyone, otherwise the market may...........so watch out on how its market move on this coming week.  If nothing goes wrong and things will smooth, STI should break 3230. 

Back to US.  US Fed will be having another meeting in somewhere mid of December.  This meeting may be the last meeting for Ben Bernanke.  Watch out for this as well.  Will there be any announcement by him regarding tapering since he was the one who initiated QE. 

Happy Trading. 

 

CapitaComm

HDB resales price drop for the first time over 4 years

Read this article:-
"According to HDB's results released today, the resale price index dropped 0.9%, the first time that the index declined since 1Q 2009 when deep recession hit. 

Transaction volume was also lower, falling 13% from the previous quarter to 4529 cases.  Comparatively, there were 6560 deals done in the 3Q of last year.  A dropped of one-third comparing YOY.

The overall median COV had dropped more than 45% to its current $17,000 in 3Q 2013 compared to $32,000 at the beginning of 2013. 

Economists and analysts claimed that the price trend is due to stricter controls on home loans.  Reduction of the mortgage servicing ration to 30% of borrower's gross monthly income.  Coupled with new BTO flats on offer.  HDB is on track to launch 25,000 new flats this year, with about 5,000 due to released next month.  PRs having to fulfil 3 years requirement before they can purchase a resale flat and so on."

Remember I talked about property on 1-September.  Think twice before you decide to purchase an unit.  This is just the beginning.  More will comes, in regardless HDB or private.  In fact some areas are selling with zero COV and some even to the extend of selling under valuation.   

My advise, think before you act.  As what I said in the 1-September posted, some people said the housing price in Singapore no matter what, 10 years, 20 years it will go up as Singapore has limited land space.  Make sense.  But, have they watch out and calculate the interest rate.  Have they forgotten what happened during the Asia crisis?   Am I hurry to get a house now?  If not, why rush?  Wait, and if I can buy an unit with 20% to 30% lower, why not?


 

STI should not have a problem to cross 3200 and probably 3230 which may give some resistant

Finally, House of Representative passed legislation to increase debt ceiling and re-open the government after 16 days of shutdown.  The bill will finance the federal until 15-Jan'14 and borrowing limit would be raised until 17-Feb'14.

China third quarter GDP matched analyst forecasted number 7.8%.  With these 2 good news we see S&P hit another record high 1745 on last Friday.  NASDAQ crossed previous 3817 high, closing at 3914 on last Friday.  Analyst and economist think that because of the earlier debt ceiling issued, tapering will only be kick off on 2014.  December Christmas is coming.  With these few reasons, I see the possibility of DOW hitting another record high of around 16,000 by this year. 

STI should not have a problem to cross 3200 and probably 3230 which may give some resistant to STI.  Nevertheless 3280 to 3300 will be a challenge to STI.

Now to December should be a good months for equities market.  By having said that, a few things that require us to take note, recent companies reports (index up but your counter flat, remember to select the correct stock) and the monthly US economic reports.  Analyst and economists think that tapering will only be kick off in 2014.  What happen if say Bernanke next month announce tapering to be kick off in December?  Something I need to watch out for.  Lastly, any unforeseen things happen. 

Happy trading.  For STI to move, blue chip and STI counters need to move.  Then follow by mid cap and lastly penny counters.  Lately, Asiasons, Blumont and LionGold shocked everybody.  Big boys, fund managers and retailers, all got burned.  Avoid penny stock for the time been.  Nevertheless, penny stock will be back again.  (STI chart refer to my last Friday posted)

 

 

 

Vard one day >6% profit

Vard - Inverted Hammer

Trading Rules (LionGold)

Mid August I mentioned that LionGold was reaching its 25% centre of gravity.  Any counter when it exit 20% CG, it need to pull back.  However LionGold exited its max 30% CG.  And there was no ticket for shortening inside the CFD.  Therefore, it has only one direction - up.  Nevertheless, if we analyst its financial statement, looking at its PE, ROE........that time the price was too far way out. 

Small fish like me, should not chase after the price.  We never know when the big fishes going to let go.  We need to understand in the market, there are these 2 groups for traders.  One group wants the price the go up, the other group look for opportunity to short.  Penny stock can move so fast and so far is because of these 2 groups of traders  When I trade penny stock, I always tell myself - don't be greed.   And never chase after the price.  I may win today but I may loss everything in just one trade if I do not follow the trading rule.  Remember - All rules are laid down by investment and trading guru because they have lost enough.  We should follow instead of thinking that we are always right.  

 

Vard

Sembcorp

22-September, I posted that SembCorp will be launching an IPO on Muscat Securities Market (Oman) on August 28, 2013.  And I highlighted the listing price (bolded) at approximately $5.17.  Thing like this, if that counter price is too low, there will always be someone out there pushing up the price close to its listing value or even higher.  We see that on SembCorp.  Its price went above $5.17 as its IPO closed on 26-September which was oversubscribed with strong levels demand from investors across the Sultanate, the GCC and Europe, raised around OMR53 million (approximately S$173 million), making it the biggest share offer in Oman so far in 2013. It is expected to commence trading of its shares on or around 10-October 2013.

 Prior to the listing, Sembcorp Salalah was 60% owned by Sembcorp’s wholly-owned subsidiary Sembcorp Utilities, 35% owned by Oman Investment Corporation (OIC) and 5% owned by Bahrain- based BDCC Investment Company. Post-listing, Sembcorp Utilities now holds a 40% stake in Sembcorp Salalah, while OIC and BDCC hold 21.9% and 3.1% respectively. Following the IPO, Sembcorp will recognise a total gain of approximately S$117 million, comprising a S$37 million gain on its 20% equity interest sold through the IPO and a fair value gain of S$80 million on re-measurement of its remaining 40% equity interest in the company.  We should be seeing an increase on their EPS for their full year financial report.

Now, let's look at their price.  They have couples of resistant out there.  The first resistant is at 5.42.  Can they break?  Couples of things to watch out.  Commencing trading on 10-October, STI and their third quarter performance.  Watch out Sembmarine too.  As it contribute a huge amount inside the SembCorp financial report. 

 

Delay Tapering

A lot of people asked me, FED had delay the tapering but why is it that on Friday, DOW dropped by 185 points. 

5-August to 27-August (in 3 weeks time) DOW dropped more than nine hundred of points.  Then it started to turn and went up nine hundred of points.  Covering what DOW lost in August and even breaking its history record, hitting 15,676.  This was what I said and meant about riding on roller coaster. 

Investing in stock market, we need to understand this "buy on rumour and sell on news".  Remember I said that Bernanke wouldn't want to become the  历史罪人.Economists, traders and investors knew that as well.  Because of the "buy on rumour and sell on news" and "历史罪人"  big fishes went in, moved the market before the small fishes act.  And they sold after the announcement/news released.   Look at the Friday volume was 2.5 times greater than what we see over the normal trading days.  So small fishes, whom are you actually buying these stocks from?  Yes, those professional investors and traders. Just rewind back when Bernanke announced QE3, that few days and weeks, market went up or down. 

The pulled back is good.  We need consolidation.  Base on TA, market is an up trend.  However, as I said we are riding on a roller coaster, German Election result which will be releasing soon, debt ceiling, which we may see drama going on.  And after this what next?  Tapering is being delayed and not cancelled.  Trade with care. 

What about STI?  It hit 3260 resistant.  Therefore, we see a pull back.  How will the  market move over the next 4 months?  Three possibility.  I shall not make any guesses, instead, letting the market tell me everything.  TA shows up trend today doesn't means a week later still showing up trend.  Just trade with care.  Don't be a goalkeeper.  Do not buy from the traders and investors who are selling. 

Tapering

See how stock market moved last week, just like riding on roller coaster.  One day STI down by 39 point and the next day up by 24 point.  Syria war, tapering and numbers of important reports released from the US moved the index high and low.  Lots of investors and traders just confused and did not know what to do.    

How I looked at Syria war was posted earlier.  Today, let’s look at some of the US reports numbers.

	Actual	Forecast	Previous
ISM Manufacturing PMI	55.7	54.2	55.4
Unemployment Claim	323K	332K	332K
ISM Non-Manufacturing PMI	58.6	55.2	56
Non-Farm Employment Change	169K	178K	104K (162K)
Unemployment Rate	7.3%	7.4%	7.4%

July non-farm employment change was revised down from 162,000 to just 104,000.  This number was the lowest in more than a year.  August number was 169,000, versus forecast 178,000.  This brings the average monthly job growth for 2013 to 160,000, which is just barely enough to keep up with the US population growth.  Friday, DOW came down hundred over point to 14,789 before the release of employment data.  After number was released, DOW went up and closed at 14,922.  Economists, analyst and investors used this opportunity to push the index back to track as they anticipated that the US economic recovery is not yet robust enough to sustain itself without the additional help of the FED.  Probably tapering may not kick off so soon. 

Let’s rewind back.  Back in late May, global markets fall after Ben Bernanke announced its QE tapering.  The markets rebounded in July but started falling again in August with stock market and Asia currencies like the India, Indonesia…. which was badly hit.  Some economists believe that tapering will kick off in September, while others think that it should be October.  With so much speculating plus the uncertainty from Syria war, the market is just moving high and low like the roller coaster. 

If we look how the stock market, currencies…..moved over the past 3 months, in fact FED officials have already been preparing investors for the inevitable, which is why stock markets are falling and money was leaving the emerging markets.  In other words, market is catering in those bad news.  And given the way on how Ben Bernanke handle the stock market, I believe the first round of tapering will kick off before Ben Bernanke step down/retire.  The questions is how much will be push out for the first round of tapering.  If the numbers is minor, lesser than economists predicted, market may move up instead of going down.  However, a major adjustment will cause the market to tumble.  Having say that, Bernanke wouldn’t want to become  历史罪人 .   As what I said, let’s see how the politicians and big fishes move the market up and down.