Thursday, 27 September 2007
Jual semula Patimas pada 0.11 dan Masuk Harnlen-Wa pada 0.15.
Info Patimas tak meyakinkan. Jual semula Patimas dan masuk Harnlen-wa sbb harga dijangka sampai 0.20 petang ini. Memang tak serik-serik.... Time will tell.
Antara Harnlen Wa dan Patimas. Masuk Patimas pada harga 0.11 sen dan Smrtech masih hold.
Ada sumber kata Harnlen dan Patimas akan goreng sdbelum hari raya. Beli melalui RHB Securitis dan tidak TA Securities. Sbb remisier kat TA tu kata Patimas tu lambat lagi nak goreng... ha ha. Memang tak serik lagi ni - tak nak dengar nasihat. Tapi tak pe, jika tak naik dalam 3 hari terus jual. Tak mahu jadi macam Silver, sumber suruh masuk tapi tak nak masuk... sekarang dah terbang tak boleh masuk nanti hangus... melepas la lagi.
Wednesday, 26 September 2007
Lessons from the Dutch tulipmania: Ooi Kok Hwa
PRESONAL INVESTING
OOI KOK HWA
Retailers suffered huge losses during the Dutch tulipmania from 1634 to 1637. We need to be extra careful in view of the excessive speculation in the China and Hong Kong markets as well as the subprime problems in the US housing market.
Q: What can we learn from the past market speculative manias, like tulipmania?
A: Lately, the Shanghai Index and Hang Seng Index touched new highs again. Besides, the Dow Jones Industrial Average was just about 2% shy of its recent peak of 14,000 points. Some analysts and fund managers have started to wonder when this excessive speculation would end, especially for the China market.
In this article, we will look into one of the past speculative manias, the Dutch tulipmania, which happened in the Netherlands from 1634 to 1637.
The tulip originated in Turkey but diffused into western Europe in the middle of the 16th century. The bulb can propagate either through seeds or buds that form on the mother bulb.
Due to slow propagation and popular demand, the tulip was viewed as an expensive, beautiful and rare flower. Hence, as the tulip was grown from bulb, the main object of this mania was the tulip bulb, not its flowers.
The market for bulbs was originally limited to professional growers. However, as a result of the inflow of large amounts of foreign funds and a rising demand for bulbs in France, the speculative buying interest started by end-1634. Many retailers liquidated their assets just to participate in tulip speculation.
Towards mid-1635, prices rose rapidly and people could buy it on credit. Many big merchants showed little interest while many lower middle and working classes were speculating in tulips.
At the latter stage of speculation just before the market crash, bulb prices surged 26 times within a month in January 1637. However, as the late buyers were unable to resell them at higher prices, they were forced to cut losses.
As a result of panic selling, the price tumbled to just 5% of its peak value in the first week of February 1637. Many middle-class people suffered huge losses.
Even though tulipmania happened more than 300 years ago, the recent speculative mania in the China and Hong Kong markets worry us.
According to Guillermo Calvo in his research titled, “Tulipmania”, he defined tulipmania as: “Situations in which some prices behave in a way that appears not to be fully explainable by economic fundamentals.”
Given that the China market jumped from the low of about 1,000 points to the present 5,400-level within a two-year period, it is hard to believe that its economic fundamentals can sustain such high market valuations.
Even though we are quite bullish on its long-term prospects, we are also concerned about the sudden surge in market value within such a short period of time.
Q: Given that the US Federal Reserve has lowered its Fed rate, can we say that we have seen the worst of the subprime woes?
A: Although the sub-prime issue has been outstanding for more than a year, it appears to be getting bigger rather than smaller. Nobody knows how serious the problem will be.
We like to use the Cockroach theory to explain the current phenomenon. Based on this theory, when you discover one cockroach in your cabinet, most likely there are more cockroaches there. This theory explains that one piece of bad news is an indication that there is more bad news to come.
Our view is as long as the US property prices continue to dip, we need to be extra careful as they can spread to other types of mortgages.
OOI KOK HWA
Retailers suffered huge losses during the Dutch tulipmania from 1634 to 1637. We need to be extra careful in view of the excessive speculation in the China and Hong Kong markets as well as the subprime problems in the US housing market.
Q: What can we learn from the past market speculative manias, like tulipmania?
A: Lately, the Shanghai Index and Hang Seng Index touched new highs again. Besides, the Dow Jones Industrial Average was just about 2% shy of its recent peak of 14,000 points. Some analysts and fund managers have started to wonder when this excessive speculation would end, especially for the China market.
In this article, we will look into one of the past speculative manias, the Dutch tulipmania, which happened in the Netherlands from 1634 to 1637.
The tulip originated in Turkey but diffused into western Europe in the middle of the 16th century. The bulb can propagate either through seeds or buds that form on the mother bulb.
Due to slow propagation and popular demand, the tulip was viewed as an expensive, beautiful and rare flower. Hence, as the tulip was grown from bulb, the main object of this mania was the tulip bulb, not its flowers.
The market for bulbs was originally limited to professional growers. However, as a result of the inflow of large amounts of foreign funds and a rising demand for bulbs in France, the speculative buying interest started by end-1634. Many retailers liquidated their assets just to participate in tulip speculation.
Towards mid-1635, prices rose rapidly and people could buy it on credit. Many big merchants showed little interest while many lower middle and working classes were speculating in tulips.
At the latter stage of speculation just before the market crash, bulb prices surged 26 times within a month in January 1637. However, as the late buyers were unable to resell them at higher prices, they were forced to cut losses.
As a result of panic selling, the price tumbled to just 5% of its peak value in the first week of February 1637. Many middle-class people suffered huge losses.
Even though tulipmania happened more than 300 years ago, the recent speculative mania in the China and Hong Kong markets worry us.
According to Guillermo Calvo in his research titled, “Tulipmania”, he defined tulipmania as: “Situations in which some prices behave in a way that appears not to be fully explainable by economic fundamentals.”
Given that the China market jumped from the low of about 1,000 points to the present 5,400-level within a two-year period, it is hard to believe that its economic fundamentals can sustain such high market valuations.
Even though we are quite bullish on its long-term prospects, we are also concerned about the sudden surge in market value within such a short period of time.
Q: Given that the US Federal Reserve has lowered its Fed rate, can we say that we have seen the worst of the subprime woes?
A: Although the sub-prime issue has been outstanding for more than a year, it appears to be getting bigger rather than smaller. Nobody knows how serious the problem will be.
We like to use the Cockroach theory to explain the current phenomenon. Based on this theory, when you discover one cockroach in your cabinet, most likely there are more cockroaches there. This theory explains that one piece of bad news is an indication that there is more bad news to come.
Our view is as long as the US property prices continue to dip, we need to be extra careful as they can spread to other types of mortgages.
Tuesday, 25 September 2007
Apa yang sebenarnya sedang berlaku?
Apa yang sebenarnya sedang berlaku?
Selepas Belanjawan 2008 dibentang CI tidak bermaya, CI naik tapi banyak kaunter turun. Malah CI lebih teruk jatuh apabila berlaku sesuatu keadaan diluar kawalan di luar negara. CI akan memberi reaksi jatuh berlebihan jika market luar negara jatuh. Tapi bila market luar negara naik tinggi, CI tidak naik tinggi. Adakah Bursa Malaysia tidak lagi kisah dengan pelabur runcit dalam market dan hanya memberi layanan istimewa kepada pelabur institusi.
Apa yang sebenarnya sedang berlaku?
Banyak projek koridor selatan, utara, Sabah dan pantai timur dilancarkan dengan nilai pelaburan berbilion-bilion ringgit. Tapi kenapa CI tidak memberi reaksi yang memberangsangkan. Bilakah dan adakah pelabur asing yakin dan akan datang untuk melabur dalam ekuiti market dan koridor ini.
Apa yang sebenarnya sedang berlaku?
Apakah tidak lama lagi akan diadakan PUU. Banyak kaunter akan terbang terutamanya berkaitan GLC dan sebagainya.
Apa yang sebenarnya sedang berlaku?
Apakah dunia sedang memasuki ambang zaman kemelsetan ekonomi. Harga minyak melebihi USD 80.00 per tong. US sedang bergelumang dengan masalah subprima. Inflasi bertambah tinggi. Jika ini berlaku akan dijangkakan keadaan tahun 1997 akan berulang dan banyak berlaku pengangguran serta banyak perniagaan akan bermasalah dan tutup kedai mulai tahun 2008!!!
Hanya Masa Akan Menentukan!!!
Selepas Belanjawan 2008 dibentang CI tidak bermaya, CI naik tapi banyak kaunter turun. Malah CI lebih teruk jatuh apabila berlaku sesuatu keadaan diluar kawalan di luar negara. CI akan memberi reaksi jatuh berlebihan jika market luar negara jatuh. Tapi bila market luar negara naik tinggi, CI tidak naik tinggi. Adakah Bursa Malaysia tidak lagi kisah dengan pelabur runcit dalam market dan hanya memberi layanan istimewa kepada pelabur institusi.
Apa yang sebenarnya sedang berlaku?
Banyak projek koridor selatan, utara, Sabah dan pantai timur dilancarkan dengan nilai pelaburan berbilion-bilion ringgit. Tapi kenapa CI tidak memberi reaksi yang memberangsangkan. Bilakah dan adakah pelabur asing yakin dan akan datang untuk melabur dalam ekuiti market dan koridor ini.
Apa yang sebenarnya sedang berlaku?
Apakah tidak lama lagi akan diadakan PUU. Banyak kaunter akan terbang terutamanya berkaitan GLC dan sebagainya.
Apa yang sebenarnya sedang berlaku?
Apakah dunia sedang memasuki ambang zaman kemelsetan ekonomi. Harga minyak melebihi USD 80.00 per tong. US sedang bergelumang dengan masalah subprima. Inflasi bertambah tinggi. Jika ini berlaku akan dijangkakan keadaan tahun 1997 akan berulang dan banyak berlaku pengangguran serta banyak perniagaan akan bermasalah dan tutup kedai mulai tahun 2008!!!
Hanya Masa Akan Menentukan!!!
Monday, 24 September 2007
Always Remember This
Always remember this :- when one currency down d other one must be UP ! hv u ever seen USD vs RMB or USD vs Ringgit up together ? USD DOWN RMB will definitely UP ! USD down, Ringgit will surely UP also, then u may come to me n ask what about rmb VS ringgit ? when both currency goes strong against USD, RMB vs ringgit will stay FLAT !
US 's inflation problem is still hovering FED, can US survive without China cheap products ? d answer is definitely : NO : ! Asia currency n stocks will still remains bullish from now till mid of 08, after that ??.. highly alert ! I will not wait till mid of 08 to dispose off my holding, Most likely, I will do it somewhere around CNY to March 08 ^V^
Posted by Samgoss
US 's inflation problem is still hovering FED, can US survive without China cheap products ? d answer is definitely : NO : ! Asia currency n stocks will still remains bullish from now till mid of 08, after that ??.. highly alert ! I will not wait till mid of 08 to dispose off my holding, Most likely, I will do it somewhere around CNY to March 08 ^V^
Posted by Samgoss
Wednesday, 19 September 2007
DJ Was Up By 335.97 Points. My Shares Will Fly? Time Will Tell....
I was bought share X, Y and Z since 1 month ago and during market down trend when the price at the bottom. Somebody said all that counter will fly like mad. Time will tell... I can't fill full name because it not fair to my remisier and his team. They doing homeworks and I just follow his advises.
Bernanke Gave Markets A Boost!
Fed cut both Fed Funds Rate and Discount Rate by 50 basis points. It was a very drastic move and very unexpected. What was Bernanke thinking before making this decision? Throw inflation out of the window for now and bail out the financials first? Is this a recognition of a bigger problem in the US economy? Time will tell... Nevertheless, traders certainly welcome the cuts and the Dow Jones Industrial Average was up by 335.97 points.
Posted by Boon at 9:49 PM
Posted by Boon at 9:49 PM
Stocks Soar After Fed's Bigger-Than-Expected Half-Point Cut in Interest Rates
AP
Stocks Soar After Half-Point Rate Cut
Tuesday September 18, 5:25 pm ET
By Madlen Read, AP Business Writer
Stocks Soar After Fed's Bigger-Than-Expected Half-Point Cut in Interest Rates
NEW YORK (AP) -- A jubilant Wall Street barreled higher Tuesday after the Federal Reserve cut its benchmark interest rate by a larger-than-expected half percentage point. The Dow Jones industrial average reacted by surging 335 points -- its biggest one-day point jump in nearly five years.
Although some investors hoped for a rate cut of that magnitude, most were betting on a smaller, quarter-point cut in the federal funds rate. The Fed responded to the spilling of credit market problems into the rest of the economy by saying, "the tightening of credit conditions has the potential to intensify the housing (market) correction and to restrain economic growth more generally."
The Fed lowered the benchmark fed funds rate to 4.75 percent after keeping it unchanged for more than a year and not lowering the rate since 2003. It also reduced the discount rate -- what it charges banks borrowing from its discount window -- by a half percentage point to 5.25 percent. On Aug. 17, the central bank lowered the discount rate by a half-point to help keep cash moving in the U.S. banking system
Stocks Soar After Half-Point Rate Cut
Tuesday September 18, 5:25 pm ET
By Madlen Read, AP Business Writer
Stocks Soar After Fed's Bigger-Than-Expected Half-Point Cut in Interest Rates
NEW YORK (AP) -- A jubilant Wall Street barreled higher Tuesday after the Federal Reserve cut its benchmark interest rate by a larger-than-expected half percentage point. The Dow Jones industrial average reacted by surging 335 points -- its biggest one-day point jump in nearly five years.
Although some investors hoped for a rate cut of that magnitude, most were betting on a smaller, quarter-point cut in the federal funds rate. The Fed responded to the spilling of credit market problems into the rest of the economy by saying, "the tightening of credit conditions has the potential to intensify the housing (market) correction and to restrain economic growth more generally."
The Fed lowered the benchmark fed funds rate to 4.75 percent after keeping it unchanged for more than a year and not lowering the rate since 2003. It also reduced the discount rate -- what it charges banks borrowing from its discount window -- by a half percentage point to 5.25 percent. On Aug. 17, the central bank lowered the discount rate by a half-point to help keep cash moving in the U.S. banking system
Tuesday, 18 September 2007
US Recession? Part VI
Foreign Investment in the US can be on the Decline
There are 6, if not more, existing conditions that can cause a major loss of confidence of foreign investment in the US:
The US markets experience a Long Term Capital Management style crisis or more hedge fund closures such as the 2 of Bear Sterns recently.
A faltering US economy led by the collapsing housing market and declining automotive market.
Rising trade barriers and protectionism. The latest negotiations to try to secure a new global trade deal collapsed without agreement.
Recovering of the Japanese economy. Japan is one of the top 3 holders of US treasuries.
The increasingly significance of the Chinese economy. China is also one of the top 3 holders of US treasuries.
Middle East conflicts.
Back in 1999, foreign purchases of US financial assets issued were only accounted for in the range of 50%. It has been growing to now nearly 80%. Given the above existing conditions, foreign investment in the US based on the belief that the US is the best place to achieve the highest returns at the lowest risk can be on the decline.
In August 2007, foreign central banks and governments dumped a whopping 3.8% of their holdings of US debt. China, Japan, and Taiwan have been leading the sell off, which has caused the steepest decline since 1992.
Private Equity
Like the once high flying venture capital during the dotcom boom, hundreds of private equity deals done over the past few years will fail. The rise and fall of investment in private equity by individuals and institutions, and investments by private equity firms in US corporations will mirror the rise and fall of the venture capital investment.
Conclusion
The combined recessionary pressures due to the collapsing US housing market, the decline of foreign investment in the US, and upcoming failures of private equity will be major. US recession is inevitable. Financial markets will come to that realisation in the next 3 to 6 months. US unemployment will rise, subprime contagion effect such as the recent Northern Rock event in the UK will be one of many to come, while words of comfort will continue to be spelled out by the politicians and regulators who are supposed to prevent it all from happening.
Related posts:
US Recession? Part V
US Recession? Part IV
US Recession? Part III
US Recession? Part II
US Recession? Part I
Posted by Boon at 1:25 PM
There are 6, if not more, existing conditions that can cause a major loss of confidence of foreign investment in the US:
The US markets experience a Long Term Capital Management style crisis or more hedge fund closures such as the 2 of Bear Sterns recently.
A faltering US economy led by the collapsing housing market and declining automotive market.
Rising trade barriers and protectionism. The latest negotiations to try to secure a new global trade deal collapsed without agreement.
Recovering of the Japanese economy. Japan is one of the top 3 holders of US treasuries.
The increasingly significance of the Chinese economy. China is also one of the top 3 holders of US treasuries.
Middle East conflicts.
Back in 1999, foreign purchases of US financial assets issued were only accounted for in the range of 50%. It has been growing to now nearly 80%. Given the above existing conditions, foreign investment in the US based on the belief that the US is the best place to achieve the highest returns at the lowest risk can be on the decline.
In August 2007, foreign central banks and governments dumped a whopping 3.8% of their holdings of US debt. China, Japan, and Taiwan have been leading the sell off, which has caused the steepest decline since 1992.
Private Equity
Like the once high flying venture capital during the dotcom boom, hundreds of private equity deals done over the past few years will fail. The rise and fall of investment in private equity by individuals and institutions, and investments by private equity firms in US corporations will mirror the rise and fall of the venture capital investment.
Conclusion
The combined recessionary pressures due to the collapsing US housing market, the decline of foreign investment in the US, and upcoming failures of private equity will be major. US recession is inevitable. Financial markets will come to that realisation in the next 3 to 6 months. US unemployment will rise, subprime contagion effect such as the recent Northern Rock event in the UK will be one of many to come, while words of comfort will continue to be spelled out by the politicians and regulators who are supposed to prevent it all from happening.
Related posts:
US Recession? Part V
US Recession? Part IV
US Recession? Part III
US Recession? Part II
US Recession? Part I
Posted by Boon at 1:25 PM
Sunday, 16 September 2007
Ten Year Cycle of Market Crashes?
The market crash in 2007
The recent heavy sell-down on the bond and stock markets caught a lot of retail and institutional investors by surprise. What appeared to be a haven in investment like the bond market was still subject to panic selling from institutional investors.
We believe the crash in the bond market was mainly due to the withdrawal of some foreign funds. As a result of tight liquidity, unwinding of yen carry trade and potential high losses in some hedge funds, some foreign funds might have been forced to withdraw their investments from the Asia-Pacific market.
The plummet in our stock market was mainly due to the fear of sharp drops in the US, Hong Kong, Singapore, South Korea and Japan markets.
Even though our banking institutions were not really affected by the US subprime issues, the international contagion and fear of more crashes, margin calls and panic selling from retailers caused heavy losses on Bursa Malaysia.
Nevertheless, the magnitude of our losses was far less than those in the regional markets.
The market crash in 1987/8
The market crash in October 1987 was partly attributed to strong market performance of most markets during the first nine months of the year. For example, the US market experienced more than 30% increase during the nine-month period.
However, from Oct 12 to 16, the Dow Index tumbled by 9.5%. On Black Monday of Oct 19, it plunged 22.6%, or 508 points, within a day. It was the largest single fall since 1929, in both absolute and percentage terms.
In Malaysia, the KL Composite Index (KLCI) tumbled by 12.4% on Black Monday. As a result of the overnight crash in US, the KLCI plunged another 15.7% the next trading day.
The market crash in 1997/8
The Asian stock market crash of 1997/98 began with a currency crisis in July in Thailand and quickly spread to neighbouring nations. One by one, overheated markets crashed in Thailand, Indonesia, Malaysia, the Philippines, Hong Kong, Singapore, Taiwan and South Korea. This was mostly due to the rapid industrialisation in these countries.
The US market was affected by the turmoil in Asia. Its share prices began to collapse at the beginning of October 1997. On Oct 27, the Dow Index tumbled by 554 points, or 7.2%, within a day. However, it recovered by recording a rise of 337 points the next day.
In Malaysia, the KLCI tumbled from 1,231 points in the beginning of 1997 to the low of 262 on Sept 1, 1998, representing a total percentage drop of 78.7%.
Comparing the three market crashes, the KLCI suffered its biggest daily drop of 21.5% on Sept 8, 1998. The crashes in 1997/8 and 1987/8 were also far more severe than our recent market crash.
We are not too sure whether we have seen the worst of the crash in 2007. However, the sell-down has caused a big disruption in our uptrend momentum. It appears to be quite difficult for the KLCI to touch the recent peak of 1,392 again.
Any market rebounds may prompt fund managers to continue offloading their equity exposure. Most of big losses in 1997/8 and 1987/8 happened in October.
As we can only know the actual exposure of the subprime issues for most of the US financial institutions when they report their third quarter results in early October, we are expecting some market volatility in that month.
Source: http://biz.thestar.com.my/
Posted by BullTrader
The recent heavy sell-down on the bond and stock markets caught a lot of retail and institutional investors by surprise. What appeared to be a haven in investment like the bond market was still subject to panic selling from institutional investors.
We believe the crash in the bond market was mainly due to the withdrawal of some foreign funds. As a result of tight liquidity, unwinding of yen carry trade and potential high losses in some hedge funds, some foreign funds might have been forced to withdraw their investments from the Asia-Pacific market.
The plummet in our stock market was mainly due to the fear of sharp drops in the US, Hong Kong, Singapore, South Korea and Japan markets.
Even though our banking institutions were not really affected by the US subprime issues, the international contagion and fear of more crashes, margin calls and panic selling from retailers caused heavy losses on Bursa Malaysia.
Nevertheless, the magnitude of our losses was far less than those in the regional markets.
The market crash in 1987/8
The market crash in October 1987 was partly attributed to strong market performance of most markets during the first nine months of the year. For example, the US market experienced more than 30% increase during the nine-month period.
However, from Oct 12 to 16, the Dow Index tumbled by 9.5%. On Black Monday of Oct 19, it plunged 22.6%, or 508 points, within a day. It was the largest single fall since 1929, in both absolute and percentage terms.
In Malaysia, the KL Composite Index (KLCI) tumbled by 12.4% on Black Monday. As a result of the overnight crash in US, the KLCI plunged another 15.7% the next trading day.
The market crash in 1997/8
The Asian stock market crash of 1997/98 began with a currency crisis in July in Thailand and quickly spread to neighbouring nations. One by one, overheated markets crashed in Thailand, Indonesia, Malaysia, the Philippines, Hong Kong, Singapore, Taiwan and South Korea. This was mostly due to the rapid industrialisation in these countries.
The US market was affected by the turmoil in Asia. Its share prices began to collapse at the beginning of October 1997. On Oct 27, the Dow Index tumbled by 554 points, or 7.2%, within a day. However, it recovered by recording a rise of 337 points the next day.
In Malaysia, the KLCI tumbled from 1,231 points in the beginning of 1997 to the low of 262 on Sept 1, 1998, representing a total percentage drop of 78.7%.
Comparing the three market crashes, the KLCI suffered its biggest daily drop of 21.5% on Sept 8, 1998. The crashes in 1997/8 and 1987/8 were also far more severe than our recent market crash.
We are not too sure whether we have seen the worst of the crash in 2007. However, the sell-down has caused a big disruption in our uptrend momentum. It appears to be quite difficult for the KLCI to touch the recent peak of 1,392 again.
Any market rebounds may prompt fund managers to continue offloading their equity exposure. Most of big losses in 1997/8 and 1987/8 happened in October.
As we can only know the actual exposure of the subprime issues for most of the US financial institutions when they report their third quarter results in early October, we are expecting some market volatility in that month.
Source: http://biz.thestar.com.my/
Posted by BullTrader
Saturday, 15 September 2007
When There Is Nothing To Do, Do Nothing.
Remember that golden word by warren buffet : when there is nothing to do, do nothing.
Dow up, regional mkt almost all up except KLSE, what happening ? seems like KLSE is heading no way, now u should know why i posted there "stay a side": "UnS"
Dow up, regional mkt almost all up except KLSE, what happening ? seems like KLSE is heading no way, now u should know why i posted there "stay a side": "UnS"
An Extract From One Of The Femours Blog: When you say momentum, how do you measure this? What parameters would you look at?
When to re enter is very much depend on mkt volume, if mkt is bad with thin volume,dont expect miracle n make $$$$ even yr holding is damn solid FA n undervalue (most of d time ), when mkt bounce back with volume, that's d time to look at individual volume, always remember this :- during bull run, shit n un FA stocks will follow d rise also, same goes to bearish mkt, all will slump down whether it is FA or unFA stocks ^V^ what u should do is := allocate yr fund in to half or 1/3 for undervalue stock which u r prepared to hold for mid n long term, d rest of yr fund be prepared for crash n also for hit n run once mkt bounce back, ppl will says it is easy to talk than do.
Friday, 14 September 2007
Boon Said and Advise
Most new traders win in their first couple of trades. They are very careful when they are new to the market and it takes them months to research and to think of what to buy. As time progresses, they become sloopy and want to do 5 trades in a week! This is when things start to go wrong. The worst is they have forgotten these 3 very, very important prerequisites -- (1) risk awareness; (2) planning; and (3) patience. Be a responsible trader, only trade when you knew you can win! Keywords: Price Action, Pivot, Floor Pivot Points (FPP's), 81-Day EMA Rejection, 20-Day EMA Rejection, Darvas Box, 4-Pivot Formation, Rising 3 Formation, Fibonacci, Invariants, Propagation, Harmonial Behaviour, 1-to-1 Swing, 1-2-3-4 Swing, Failure Swing, Swing Target, etc. I trade the US futures (ES, YM, and ER2) and Bursa Malaysia.
Boon: The Market Has Proven Me Right! Part IV
Some questions received through email:
What's a failure swing?
When Pivot 4 taking out Pivot 3.
What's a point of make or break?
A point to which price actions converged before making a sudden move to either up or down. This tends to happen when the market is waiting for an anticipated trigger/catalyst before its next move. In the case of the current US market, the announcement following the upcoming FOMC meeting seems to be what traders are waiting for.
The last make or break point I spotted for KLCI: KLCI: Make or Break!
Is it possible to know beforehand the bias of such a sudden move?
From my experience, the bigger time frame tends to provide a very good guidance. However, it is difficult to trade it risk-conservatively when price actions are nearly converged. If you want to bet on a formation on a bigger time frame, you have to place your bet before price actions converged within a lower time frame. In the case of the S&P 500 futures, shorting at Pivot 3 on the EoD chart, which gives you a lot of room to trail stop and to set a good profit floor.
What's a failure swing?
When Pivot 4 taking out Pivot 3.
What's a point of make or break?
A point to which price actions converged before making a sudden move to either up or down. This tends to happen when the market is waiting for an anticipated trigger/catalyst before its next move. In the case of the current US market, the announcement following the upcoming FOMC meeting seems to be what traders are waiting for.
The last make or break point I spotted for KLCI: KLCI: Make or Break!
Is it possible to know beforehand the bias of such a sudden move?
From my experience, the bigger time frame tends to provide a very good guidance. However, it is difficult to trade it risk-conservatively when price actions are nearly converged. If you want to bet on a formation on a bigger time frame, you have to place your bet before price actions converged within a lower time frame. In the case of the S&P 500 futures, shorting at Pivot 3 on the EoD chart, which gives you a lot of room to trail stop and to set a good profit floor.
Tuesday, 11 September 2007
This is an extract from Boon: America's Housing Bubble
Was reading a report published by:
Economist Intelligence Unit
26 Red Lion Square
London WC1R 4HQ
United Kingdom
Thought of sharing some of the interesting figures with you:
The 1st figure shows America's housing bubble.
The 2nd figure shows the bursting of housing bubble experienced by the Japanese back in the 80s, which took them more than 20 years just to merely climbing out from it!
Is the US economy heading to a recession?
Yes, it is. 85 (51%)
No, it is not. 54 (32%)
It is already in a recession! 10 (6%)
Economist Intelligence Unit
26 Red Lion Square
London WC1R 4HQ
United Kingdom
Thought of sharing some of the interesting figures with you:
The 1st figure shows America's housing bubble.
The 2nd figure shows the bursting of housing bubble experienced by the Japanese back in the 80s, which took them more than 20 years just to merely climbing out from it!
Is the US economy heading to a recession?
Yes, it is. 85 (51%)
No, it is not. 54 (32%)
It is already in a recession! 10 (6%)
Tuesday, 4 September 2007
Just Copy From Sifu Boon For My Info: Dow Crash Scenario by CitiFX
First of all, let me stress that the following is not my view. It is forwarded to me by a reader and I thought some of you might want to have a read at it. I have already formed my own view of the US market, part of which I have already posted. I will publish more when the time is right or if I could spot another point of make or break beforehand.
---
Dow Crash Scenario Discussed by Citigroup Foreign Exchange
by XXX
I get to see a variety of Wall Street research reports, and one that came through the email this week was a shocker. No, it didn't come from a perma-bear who's been looking for the market to crash since 1960.
The report is from CitiFX, or Citigroup Foreign Exchange, dated August 24, and entitled "We hold with our freaky chart scenario on DJIA..... BUT" But what? I wish I could just post the report with its great charts, but it is copyrighted, so I will quickly boil it down. The rocket scientists who put this together at the CitiFX technicals team looked back at 1987, 1990 and 1998. In looking at '90 and '98 here's what they say:
1990: The Djia peaks on 17th July 1990 and turns. This is the start of a correction that takes it down 21.8% over 63 trading days over shooting the 200 week moving average by 0.5%.
1998: The Djia peaks on 17th July 1998 and turns. This is the start of a correction that takes it down 21.6% over 31 trading days.
2007: The Djia peaks on 17th July 2007 and turns. This is the start of a correction at a time when the 200-week moving average was sitting 21.50% below the peak.
It is fascinating that the 17th of July is duplicated. CitiFX goes on to say:
With the 2 prior occasions averaging 21.7% down over 47 trading days the sweet spot (If this correction goes according to plan) would be to see the DJIA at just below 11,000 on or around 19 Sept 2007 and no later than 11 Oct 2007.
For the 1998 and 1990 scenario, the report concludes:
Our base case view has for some time been the 1990 focus as equities got hit in the crossfire of housing and Kuwait while the credit crunch of 1998 also caught equities in the crossfire. As a consequence we believed (and still do) that the Equity move is the sideshow again not the main event.
This CitiFX report also examines 1987 where the market was center stage. They call '87, "our much less desired/favoured scenario". But they point to a variety of situations in '87 that are similar to today:
The last two years have been very good years for the stock market in an extremely strong bull market that began 5 years ago.
This has been fueled by leverage buyouts/merger mania.
Massive amounts of money raised by packaging low quality fixed income securities that have high interest rate due to high risk of lossLarge IPO issuance.
Inflation concerns have become elevated.
We have a new leader at the helm of the Federal reserve.
The USD has been declining amid concerns about the trade and budget deficits.
U.S. long-end yields have started to push up sharply again to new high in the move having corrected back for a number of months.
All of the above were '87 characteristics. Talk about deja vu all over again. The CitiFX report also says;
As we have noted this is not our base case scenario, but smarter people than us who we respect have articulated concerns about a 1987 dynamic.
The report concludes:
The bottom line we hold our view that these are trying times and that the worst is not over. We also hold our view that lower yields will be seen in the months ahead on the back of credit, housing, the economy and equities. We believe that as this develops the Fed WILL show leadership, will cut rates as necessary and will ultimately stabilise the situation. If we are wrong in this assessment then as we have said previously, without the Bernanke PUT we may have to entertain the idea of the Bernanke crash.
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Dow Crash Scenario Discussed by Citigroup Foreign Exchange
by XXX
I get to see a variety of Wall Street research reports, and one that came through the email this week was a shocker. No, it didn't come from a perma-bear who's been looking for the market to crash since 1960.
The report is from CitiFX, or Citigroup Foreign Exchange, dated August 24, and entitled "We hold with our freaky chart scenario on DJIA..... BUT" But what? I wish I could just post the report with its great charts, but it is copyrighted, so I will quickly boil it down. The rocket scientists who put this together at the CitiFX technicals team looked back at 1987, 1990 and 1998. In looking at '90 and '98 here's what they say:
1990: The Djia peaks on 17th July 1990 and turns. This is the start of a correction that takes it down 21.8% over 63 trading days over shooting the 200 week moving average by 0.5%.
1998: The Djia peaks on 17th July 1998 and turns. This is the start of a correction that takes it down 21.6% over 31 trading days.
2007: The Djia peaks on 17th July 2007 and turns. This is the start of a correction at a time when the 200-week moving average was sitting 21.50% below the peak.
It is fascinating that the 17th of July is duplicated. CitiFX goes on to say:
With the 2 prior occasions averaging 21.7% down over 47 trading days the sweet spot (If this correction goes according to plan) would be to see the DJIA at just below 11,000 on or around 19 Sept 2007 and no later than 11 Oct 2007.
For the 1998 and 1990 scenario, the report concludes:
Our base case view has for some time been the 1990 focus as equities got hit in the crossfire of housing and Kuwait while the credit crunch of 1998 also caught equities in the crossfire. As a consequence we believed (and still do) that the Equity move is the sideshow again not the main event.
This CitiFX report also examines 1987 where the market was center stage. They call '87, "our much less desired/favoured scenario". But they point to a variety of situations in '87 that are similar to today:
The last two years have been very good years for the stock market in an extremely strong bull market that began 5 years ago.
This has been fueled by leverage buyouts/merger mania.
Massive amounts of money raised by packaging low quality fixed income securities that have high interest rate due to high risk of lossLarge IPO issuance.
Inflation concerns have become elevated.
We have a new leader at the helm of the Federal reserve.
The USD has been declining amid concerns about the trade and budget deficits.
U.S. long-end yields have started to push up sharply again to new high in the move having corrected back for a number of months.
All of the above were '87 characteristics. Talk about deja vu all over again. The CitiFX report also says;
As we have noted this is not our base case scenario, but smarter people than us who we respect have articulated concerns about a 1987 dynamic.
The report concludes:
The bottom line we hold our view that these are trying times and that the worst is not over. We also hold our view that lower yields will be seen in the months ahead on the back of credit, housing, the economy and equities. We believe that as this develops the Fed WILL show leadership, will cut rates as necessary and will ultimately stabilise the situation. If we are wrong in this assessment then as we have said previously, without the Bernanke PUT we may have to entertain the idea of the Bernanke crash.
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