Entertainment - Father vs Mother

Gaps are trend enemy

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

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

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

Simple introduction on 沪港通

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

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

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

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

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

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

FirstRes shows divergence

Last Friday US and Europe markets triggered the TA set up

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

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

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

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

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

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

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

US and Europe markets, buyers come in

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

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

Trade what you see and not what you think

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

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

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

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

Strong USD?

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

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

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

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