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.