Friday, May 20, 2016

Rate raise Alert


Hey Folk


Rate raise alert again. The Fed had say that most likely they will raise the rate in June. The same condition must be met for rate raise, they are inflation and jobs.

I am not going to predict if it going to raise the rate eventually in June, I really do not know if that is really going to happen or are they just trying to prepare the market. The job of a trader is to read and understand current situations then act on it and not trying to predict the future. So let not speculate about all these.

The situation now for stock market is still short term downtrend, long term up trend. You can choose to stay at the side line for now until things are more clear to buy again.

The above chart predicts the move of Gold. The chart is in weekly. It will not tell the magnitude but duration of the direction. The chart show the relationship between gold and bond price inverted.

These are some interesting tools to share. During my research I manage to get them out. Again these are not timing indicators, it just tell us what to expect in the near future. As much as I cant predict, but there is certain intermarket relationship that can tell us some stories. Market is moved by conditions and not charts.

Cheer

Friday, May 13, 2016

Shaky moment


Hey Folk


The market now is like what we have in December last year. Shaky again.

Overall we are still in a low interest rate environment and the Advance/Decline also show that is moving up. Bond price is still in the up move and no big divergent against the stock market.

The big picture is still up, but in the near term the market maybe coming off.

Stock market top is much easier to spot than stock market bottom. There is no sign that the market is toppish for now. I wish to point out something, stock market are usually upward bias. To beat the market, we can just maintain a long term buy position and spot the toppish picture and short the market. In this case, one will beat the market.

Take note some swiss based bank in Singapore are going to charge u interest for depositing Euro or Swiss franc. So instead of getting interest you are paying interest. This is the negative interest rate environment.

Cheer

Tuesday, April 5, 2016

BUY BUY BUY


Hey Folk

I witness the Commitment of Traders report on the stock market have multiyear high commercial buying. In Layman, the Big Boys are accumulating position in the stock market at a record high level. This level was seen in 2011, where the market went higher thereafter. The S&P500 had also change from downtrend to up trend. I still think we have some rooms to the upside. However there are certain key price level in the S&P500 that is still a resistance.

If these wave of up move realize, it will naturally bring the rest of the market in the world to go up as well.

Gold on the other hand had commercial selling to multi year high. In short the Big Boys are selling these precious metal at record level. This precious metal will go lower in prices in a slow manner. Gold can hover in a price range for a period of time and then a break down.


Cheer

Wednesday, March 30, 2016

Recession??


Hey Folk


Maybe there is a chance for Spore stock market to be alive again. But is always a double age sword. More hot money in mean retail investor are easier to lose out.

So let see how things are rolled out.

Last week most important things FOMC

I quote from FOMC statement

Information received since the Federal Open Market Committee met in January suggests that economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months. Household spending has been increasing at a moderate rate, and the housing sector has improved further; however, business fixed investment and net exports have been soft. A range of recent indicators, including strong job gains, points to additional strengthening of the labor market. Inflation picked up in recent months; however, it continued to run below the Committee's 2 percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.”


Who say there is recession???

Market continue to go higher.

See this very recent event. Singapore budget day

Find the full text in here http://www.singaporebudget.gov.sg/budget_2016/BudgetMeasures.aspx

Quote “The global economic outlook has softened since the start of the year, alongside a fall in oil prices and increased volatility in global financial markets. The advanced economies are expected to see continuing modest but uneven recovery. US growth is expected to improve slightly compared to 2015 as domestic demand improves. The Eurozone is expected to pick up slightly due to an improving unemployment situation and continued easing of monetary conditions. However, uncertainty remains over whether China’s transition to a more sustainable growth path may encounter short-term challenges. 

The Singapore economy grew 2.0% in 2015, and is expected to continue growing at a modest pace of 1-3% for 2016…..”

Direct copy and paste, see what our finance ministry have said.

I think the market still have some rooms to go up.

Cheer

Saturday, March 12, 2016

Quantitative Easing


Hey Folk

Let take a look at some QE or in long quantitative easing in different places.

QE in short is central bank try to simulate the economy where traditional method is not useful anymore. Layman term…..

US started QE program in Nov 2008 that is call QE1, then QE2 in Nov 2010 and QE infinity in Sept 2012 till 2014.

European Union start QE program in May 2009, argue for very long over EU itself and fundamental problems, still cant solved. Then another QE infinity in Jan 2015. Another expansion of QE is on March 2016. Mario also say that this is about all they have.

Japan is in a very deflation mode ever since 1980s. So they start QE in Oct 2010, Aug 2011, QE infinity April 2013 and expand QE infinity in Oct 2014.

The UK started the QE in March 2009.

We can see that most of the region or country started later than the US. US have a better frequency than EU. EU have got too much internal problems like Greece and their internal structure. Their QE frequency are so long apart so expect them to recover much slower than the US.

Japan had already be in deflation for more than 20 years, the QE now may take much longer to take effect.

Thus this is one of the reason we see US market rallying. The rest of the market are following.
China are getting through its problems. Maybe they are seeing some light at the tunnel.

Cheer


Tuesday, March 8, 2016

Just the way we want it


Hey Folk

After so long…..

The market had perform the way I posted in the many previous post. It had rally!!!

Thank you if you believe in me.

To many of you I can see the portfolio increase in value. It is time to reshuffle the funds. I will let u know but it is still up to you if you want to do so.

This week the most important data is on the 10 March Thursday ECB meeting. Then next week is the FED rate decision.

We might be in a pull back soon after rising up quite abit. However, overall I still see a rally in the stock market going into May. US being the strongest market, Europe second, and Asia weakest. Maybe China will turn out to be the strongest among the weakest. Well for Singapore Index, let just forget about them for awhile.

Let zoom in and see what happen.

US had a GDP growth of 2% and a inflation rate increase from 0.2% to 1.4% in just 4 months. China missed it GDP expectation of 6.9% to 6.8%. Eurozone had a GDP growth of 0.3%. it has been a small fractional growth for quite some time already and a inflation rate of -0.2%.
There aint no region that are in negative GDP growth.
No recession.

But I agree a lot of people are fear of slow growth, which is real. (However, I am thinking certain catalysis are already present in these environment to let growth continue.)
The fear of slow growth lead people to be pessimistic. Which make them sell the stock market.
So I pick up some S&P500 contract up around the 1880s level and 1900s level, took profit for some and holding to some. At current as I am typing S&P500 is at 1993s level.

Until next time....

Cheer

Thursday, February 11, 2016

Deflation


Hey Folk

Today is the third day of the Chinese calendar. I wish everyone Good Health and Wealth for you and family.

We have been in a inflationary economy for many donkey years. Will we changed?? Will we be in a new world order??

Japan have introduce a negative interest rate environment. Mean if you put money in the bank, instead of earning interest, you need to pay bank interest. They wish that there are more spending in the economy. These is a period of deflation. Where price do not go up, it goes down. Because it is going down, you will wait and wait and wait before you buy. Of course, my explanation is in a nutshell. The more professional explanation is like a few page long.

Anyway, the world is in a great depression or deflation in the 1929s. People whom had experience this period are either already dead or too young back then to know what is happening. So it is very new to the world and not many people or no one at all knows how to handle this new situation. It is something like if the Fed raise rate, it is new to a lot of traders and financial analysis as rate are depressed for a good 9 years.

Will we really go into these??? I do not know, but some of famous investors said so. I think if these were to happen it will not be so soon. Probably another 5 years to a decade.

On Chinese New Year day, our PM said that we will not be in a Global Financial Crisis. Believed him. It is a slowdown. But probably like in the 07-08 crisis, they have already something up in their sleeve to prevent Singapore to be hit hardly???

Back to focus, I said that Singapore market is drying up in volume. I also know that they have appoint a new CEO a local instead of having a foreigner. Hope that he can revive the Singapore market. I really hope that these happen.

STI key number to hold is 2530. Once break, please use CFD to short. Remember this market is already in a bear.

Bonds are making new high this week. So portfolio with bonds should see certain improvement by end of month. Fund/unit trust are always slower.

My take is a rally in US market end of Feb. Then it will bring the world market to rally as well. Some market whom are already in a bear will be a dead cat bounce. ( mean even a dead cat will bounce if it falls from a great height).

I may be wrong. So please do not take it at 100%.

Cheer