Saturday, October 31, 2015

Nice up run


Hey Folk


Read this article, Prime Minister said to prepare for slowdown in the economy. I consider this ‘insider information’. They have way ahead information than we have. So embrace, tighten your belt. Sometimes it maybe way ahead of what is actually going to happen. But it is very useful information.


Fed meeting ended on 28 Oct Wed. Read what they say. No rate raise yet. In my previous entries I had mention that no rate raise so fast. GDP 3rd Qtr in the US missed forecast, pending home sales dropped too. Will they rise rate in December? Let see the inflation rate.

Next let go into a COT chart so maybe we will be in sync

This is a weekly COT chart VS weekly Oil price
Red is the commercial aka the Big Boys. Blue is the funds. Green are the retail traders. Weekly price of oil is in black.
In 2011:
The commercial build up their long position about since the second quarter of 2011, buying when the oil price dip. Oil price went up again in about the second quarter of 2012,
Notice that the small speculator or retail are extreme seller when the price are low and extreme buyer when the price peaked.
In 2013:
Somewhat the same happen in second quarter of 2013, commercial max buyer and retailer max seller, and the price went up.
In 2014:
Notice in start of 2014, the commercial are shorting, they are shorting it for about 6 months, before the price of oil came off and stay down for the next one year.
At the same time, the small speculator or the retail in green are at extreme buying at the start of 2014, oil price went up abit and the retail sold. Then they are back to extreme buying again when the oil price is peaking while the commercial still are at extreme selling.
Now
Commercial are extreme seller, however the retail are selling into it as well. So there is not a ideal setup on the COT. We see price of oil rally on Wednesday night.
Positions
As the COT suggest from last week post, I am still short on EurUsd and took a good profit. This week COT suggest a good short setup for Gold. I am in too. I also still hold long position in the S&P500 and took profit. We are still in a downtrend in the stock market. On Friday it had a outside bar that close negative. This can’t confirm anything yet. Let wait and see.
Singapore stock wise, start to look at REITS. Not to buy but to short sell. Capital commercial trust, Suntec, Cambridge are in my list.
cheer

Friday, October 23, 2015

Some entries


Hey Folk

This is going to be a short one due to my travel schedule.


Past few weeks I am talking about the possible rise in the stock market. Here we are!!! I long the stock market on different price for quick trade. Net profit so far.


I had shorted EurUsd and AudUsd.

AudUsd I only make a scratch. As of now there is not a ideal COT setup for AudUsd yet, but let see this week.

 EurUsd has good COT setup for a sell last week. On Thursday( yesterday ) EurUsd had already down 200 plus pips from the open, so let it rest before the next entry


Next there are COT setup for Gold to short. Let wait for the price to be ready for the entry.

Oil too have a setup on the COT ( not a ideal one), let the price be ready for a short entry and let see the COT for this week. Last week I said that oil may have a big rebound, it still true. That maybe explain why the price are not ready for selling and the COT to sell is not ideal.

Trend is still down on the weekly in the stock market despite the market spike up. It is a uptrend on the daily already. No clear indication yet. It is more of a trading environment lately. May the trend be clearer.
**Pls note COT is not a timing indicator. It just tell us the next big trend. Seeing extreme sell in COT by the Big Boys this week do not mean that price will collapse immediately. Sometimes it take months for the price to realize and when the price realized, usually they will stay entrenched in that direction for sometimes.

Stay the same in your funds.

cheer

Saturday, October 17, 2015

Showing some light


Hey Folk

We are approaching the seasonal low due in end of Oct which mean traditionally by end of October the market will rise. This time we have Fed meeting on the 27 and 28 of October, maybe this will be the catalysis. Also the earning season is in again, maybe this will lift the market up.
The COT data shows heavy buyer for many weeks several weeks ago. They are still heavy buyer last week. If we map them together, probably we have some hint on where the market is going. However, what I do not like is we are still in a down trend. So be nimble on the long position

I had spent every on finding a better way to determine trend in a faster way with high accuracy. However, I have not found one that has a higher hit rate and also a huge lift off when the trend change than the current one I am using. For sure my current methodology do not allow me to catch the bottom and the top. I also believe there is no such method that one can identify the top or bottom and profit from the market instantly and handsomely. Alright let get into the market.

Another things to look out for in the market is crude oil. Crude is a indicator of how well the economy is doing. A low price in crude oil mean the economy is not doing well. I mean economy and not the stock market. In the present world they are not in sync anymore.

Below is the weekly chart of crude oil

 
Notice where the cursor is at 53.95. I think crude oil is going to have a rebound to that range. Which mean to say high 53 to low 54 level. Also notice that crude oil trend is down. This is a deeply entrenched downtrend. So be nimble on your long position, if you wish to do a counter trend trade.
Stay the same in your funds. There is nothing to do yet but seem better than last week.
Short and sweet

Saturday, October 10, 2015

Dilemma


Hey Folk

I came across this very interesting video by CNBC. They interviewed the former Fed chairman Bernanke. Please pay attention to what he said for the whole length of video and particularly on 40 second to about 58 second.
http://video.cnbc.com/gallery/?video=3000428960

40 to 58 second obviously tell us that these people, investment bankers, government, sovereign wealth fund etc knew things that we common people do not know. I wrote this before, saying that my personal experience with these people is that they know things way ahead the news are release. So they will have already be in the market. When the news released, common people will come in and buy or sell a position that the smart money do not want. So in other words we take the goods they do not want and give them the money. That is why again in the COT, the small speculator or the others are always in the wrong direction. Also news are extremely lagging.

Most of the time we try to second guess or think that the policy maker or some bosses made a dumb ass choice or decision. But slowly I realize that I think they know exactly what they are doing. The reason we do not get it is that we do not know the real reason behind what they are doing. Things always make sense once you know all the facts, even if is not to our liking. But what I know is I do not know what the real reason is and I do know that we do not know the truth.

China

In the video, Bernanke also said that the stock market in China and the economy have no linked. I cannot remember where and when, I read this from our local newspaper saying this as well. The economy in China is doing a transformation, all transformation have certain shake up thus the stock market had a dive. Having said all these are useless now as things already happened. So for me, the COT, seasonal, relations and trend are still my best tell signs of where the money is going.

Russia

Their economy are greatly hit since the Ukraine incident. Now they are in the middle east. The shocking part is nobodies know how on earth they transport fighter jets and tanks into there. They are so stealth. I think the fact is I do not think they are there to fight the IS. They are there to restore their economy.

By helping these countries except Saudi, they can come in talk about the production of oil. If they can cut the supply of oil, they most likely can let the price of oil increase. Which in a way will save the dying economy of Russia.

What I believe/ my opinion (may be dead wrong)

We are entering into a slow growth pace globally. Since the Fed is not printing money and coming into the market, the market had lost it artificial simulator. Thus the upward thrust movement of the market will not be as spectacular as the previous years. We are still in a 0 inflation environment which tell us very vividly that there are no spending activities. A lot of money are lock up and kept in stash. I really hope that the US would not go into a deflation like Japan. If so, the whole globe will most likely to suffer a extreme slow growth, which surely impact all individual life. I also think because of this the interest rate would not rise.

We are in a downtrend. But we have not break the low created on Aug 2015 and most importantly Oct 2014 lows. I see very strong buys in the COT, slight divergent of relationships between sectors. If you are trading, I guess is best to stay sideline until the coast is clearer.

There is still no need to change fund yet. We are still within a big range.

Untill next time….

Saturday, October 3, 2015

Stacking the odds

Hey folk

Yesterday we saw a huge rebound on the intraday. Something promising???

Here we go, the disaggregated futures only COT on a 6 months comparison VS the weekly close price on the S&P500.
The important details to watch is the Net dealer in red, net others in green and the weekly close price of S&P500 in black. The net dealer are the biggest fund in this market. They can be government, national bank etc. The net others are the retails trader like us.
 The graph tabulate 2015 data, we can see that the net dealer are accumulating since the start of the year. The net others just pay attention to them, they are always catching the wrong direction. When the market is down in late March, they are long, when the market is at highest in mid May, they are short. When the market is falling in August, net others are long. When the market is falling more, they buy more.
So we can see that the retails trader are usually wrong, that why 95% of the participant lost money. The money they lost goes to the 5% which are the net dealer. So from here we need to watch this 2 category and we may roughly know where the big trend is heading.
Next we look at the other Net COT.
 
 
 
 
The graph is the Net COT VS S&P500 weekly close
We need to pay attention to the Comm net in red, the small spec net in green and the S&P500 weekly closing price in black. The comm net is the biggest fund and the small spec net are the retails trader.
Is obvious that the accumulation by the comm net is getting much higher, and is the highest since the start of the year as the weekly price fall. While the small spec net is trying very hard to catch the trend but fail most of the time.
From the above 2 fundamental data, the big boys are accumulating the market very heavily as the price comes off lower. That why in the last week whasapp, I did add on that buyers might be in the market. Bear in mind that COT is not a timing indicator, it only tell us where the big boys and the smart money are moving where the big trend will happen.
However the big boys can be hedgers at time. So much effort needed to spend on crunching these data further to determine their holdings. Other than the above 2 charts I still have 3 more using COT to analysis the positioning. Thus on the last post I said that we need a lot of effort to know what is happening in the market.
Anyway, currently we have net longs by the big boys. Seasonal are telling us that end of October is a buy point, it also tell us that year ending with 5 is a up year. But the weekly price is a downtrend still. Follow the price. Price rules!! Net Net no change of funds yet until further notice.
 
cheers