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.