Early update as over the weekend i would be very busy
Next week we are having our election day. Whichever party you support please go for it. I always believe in a Chinese phrase that I learn when I was young. 分久必合，合久必分.
‘There is bound to be unification after prolonged division and after prolonged division there is bound to be unification.’
Nothing is forever, in business, politic, country, friendship and even for love and family.
Same for the market. We as a country have 50 years of growth. Can we grow forever??
Have we reached the peak of our cycle??
This is the weekly chart of Gold
It seems to me that it is in a down trend since 2011. It have been down for 4 years.
I would like to repeat that gold do have a cycle of about 30 years. The peak is 2011,
so the next 30 years then we may see the peak again. There are a lot of people
that do not believe and cant believe these due to traditional mindset that this
metal will never be out of fashion. Whatever you say, I think this metal is
going down below 700.
First of all, gold is a commodity. It have a cycle and it have a mean value. I had just
explained the cycle the previous posting. All commodities have a mean
reversion. The mean is about the range of 500s, we had gold up to 1800 four
years ago. Now is slowly moving back to the mean. It happen 30 years ago from
2011, so track it back.
Gold is never a safe heaven when the stock market is not
doing well. If so then the gold should sky rocket in this recent drop. Also
when the financial crisis of 2007-08 happen, gold should have reach probably 3000???
But is now at about 1100. Compare the charts together, you will know since
history it is not.
So I will go short in this market for every bounce it have.
This is oil weekly chart.
It also look like a downtrend to me. So it is still short on bounce. However, the
COT producers are heavy buy on this a few months back, which cause the rise in price at
current. So do be cautious.
I have some opinion for this industry. Oil and gas industry
has always be an industry that pay good, high profit etc . However look at how
aggressive the green energy are coming. More and more auto companies are
developing electric car, more solar panel are used, more wind farm, more energy
efficient solution. I think slowly but that is going to be quite slow, things
may move not to the favour of oil and gas. This currently does not attribute to
the drop in oil price. It is more of demand issue and political issue in the
global situation that push the oil price lower.
Stock
There are people that asked me why do I only cover US
market. Simple it is the king of all market. I am looking into China but they
are not the major player yet. Far from it, the daily volume and the restriction
for foreigner to enter have formed an obstacle for that. So the US market can
tell the direction and move of all most markets.
Singapore market is one of the most boring market. Honestly I had wrote this before that the govt had make it so safe that our STI is more for long term investment. They are
trying to protect the local from suffering volatility from speculation by hot
money and speculators and more. Which I think is good for the local but bad for
the virtual of the market. I really hope whichever govt that come up will change this.
I think we will form a downtrend base on my indicator this
week. However one very important things to note, we have not break below the
low that is created Sept 2014. For me I am still on the sideline. One more
thing to add, the seasonal is pointing to down for Aug thru Sept. My seasonal
is a statistic of the daily close price of certain month average out for 30
years. Is traditionally choppy this period of time.
cheers
