Let get statistic

Hey Folk

The market is indeed real choppy. It seems like everyone is waiting for the talk by Fed chairwoman on Thursday morning Singapore time. She said that they see rates rise by end of the year. We are left with Oct, Nov and Dec for the year. As I said in the previous post, the anticipation will still be in the market, which leads to uncertainty. We see more swings in the market day to day, the range are wider than normal. Like I said we are in a downtrend already since the week of 7 Sept 2015. However we are still bounded in a big range from 2100 to 1830 which is about 270 points boundary in the S&P500. You will also notice this in almost all the indices.

Let look into some statistic

On the left there is a S&P500 cycle base on 30 years. Notice that the volatility increase towards Oct. and then it will dash right up. On the right we had a 4 years cycle. We are in the pre election term now. Notice again there is drop in the last quarter then market will move up.

Next

The years ending with 5 is usually a up year.

These are statistic for reference. We cant follow them like a theory or formula that sure works.As I said before, price in the market rules, now it is a down trend so short more than long.I did short on 18 and 23 of Sept. Hold for 2 days and the other an intraday trade respectively. I made some little profit.  Market are still in a range and volatile, go for fast in fast out.

If you wish to look at Singapore stocks for bottom buy, look out for Singtel, Starhub and SPH. However I wont be a buyer until my indicators tell me is a uptrend in the general market and that individual stock as well.

Trading/Investment

95% lose money and 5% make money. I think this equation is very true. Out of the 95% some will quit but there will sure be fresh participant coming into the market to replace. Let make the assumuption that the 5% that make money are consistent. Consistent mean 5 years and above having profit yearly. Out of this group, to be above average is to get a 10% profit yearly. To be the crème is to have 30-50% profit yearly. To be the best of the best is to have anything above 50% yearly.

So isn’t Trading/investment real boring. It is not to get rich quick. It is quite confirm that in any casino games or buying 4D or toto have a higher chance, better potential and relative lesser effort to get rich quick. Trading is purely having a plan and stick to a plan. Sometimes I only have 5 trading signal for the entire year for a particular instrument. I just have to wait.

Successful traders just have to follow a set of rules that work year after year and nothing else. A lot of people that I know just wish to get rich and not wanting to know the process. This market in my view has made many participant believe that one can get rich or do well with little effort or knowledge. Also since there is no formal education on how the market works, a lot of participant went into the market without any knowledge and not even knowing their approach is entirely wrong. Please do not hear say if you wish to be serious about this industry. If you just wish to invest or trade to make money without making any effort, the least you can do is to entrust some funds to do it. I may have other plans coming out for interested traders.

cheers

No rise in rate.Uncertain

Hey Folk

I did some forecasting last few post that the Fed wont rise the rate. Indeed they did not rise. The unemployment is hitting a low, but there is visibly no inflation. I guess a lot of companies are keeping money in their stash, not willing to spend.

This move by Fed of no rising the rates ( in my opinion) also come from international pressure. The world is having ‘QE’ one way of the other. So having to rise interest rate too fast would not be favorable.

This will also result in the market having lesser urgency to determine the direction as there are presence of anticipation. However, for the stock market, base on seasonal is still a down move till October where the up move will be in. Remember that year ending with 5 is a up year for as long as the seasonal tendency have exist but maybe this year we will break the pattern. Well wait and see. Nothing last forever.

Look at the actual data of the unemployment rate in the US.

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2005	5.3	5.4	5.2	5.2	5.1	5.0	5.0	4.9	5.0	5.0	5.0	4.9
2006	4.7	4.8	4.7	4.7	4.6	4.6	4.7	4.7	4.5	4.4	4.5	4.4
2007	4.6	4.5	4.4	4.5	4.4	4.6	4.7	4.6	4.7	4.7	4.7	5.0
2008	5.0	4.9	5.1	5.0	5.4	5.6	5.8	6.1	6.1	6.5	6.8	7.3
2009	7.8	8.3	8.7	9.0	9.4	9.5	9.5	9.6	9.8	10.0	9.9	9.9
2010	9.8	9.8	9.9	9.9	9.6	9.4	9.4	9.5	9.5	9.4	9.8	9.3
2011	9.2	9.0	9.0	9.1	9.0	9.1	9.0	9.0	9.0	8.8	8.6	8.5
2012	8.3	8.3	8.2	8.2	8.2	8.2	8.2	8.0	7.8	7.8	7.7	7.9
2013	8.0	7.7	7.5	7.6	7.5	7.5	7.3	7.2	7.2	7.2	7.0	6.7
2014	6.6	6.7	6.6	6.2	6.3	6.1	6.2	6.1	5.9	5.7	5.8	5.6
2015	5.7	5.5	5.5	5.4	5.5	5.3	5.3	5.1

Table of % of unemployment in US

If you plot them on the graph, since 2010, there is a consistent drop on the unemployment. However, there is also a consistent drop in inflation too. The current inflation is at 0.2% now. Fed aim is that inflation in the long run can maintain at 2%. That is 10 times more than the current rate of inflation. So hang on tight for this period of time where volatilely will increase with much anticipation of the rise in rates.

My take is since on the weekly is on the downtrend and the COT have show negative holding in the big boys, I would be a seller more than a buyer. However, we are still bounded in a range, so be careful. Not just stock market. All other instrument like commodities and forex are in the undecided zone.

cheers