Technical Analysis – Mid week

Hey folks. Sorry for not blogging last night. After work I went out with my bestie and friends for some shopping. He’s getting married month end and we as ‘bruddas’ got hell lotta stuff to prepare, and stuff to buy. I got my new suit from Zara, now I need a nice shirt. Else, it will be a plain shirt and a tie. Any suggestions? And we really needed a drink so we headed to IndoChine at Wisma. Great singing! I just didn’t like his version of Stop And Stare. Too mellow and not those ‘shouty’ type. But that’s me. A nice beer and stout with great company, what else can I ask for?

Alright so back to the market. My calculations on the retracement for the US market did come into fruition. 1 day late though. There were many obvious signs of a retracement. If an economist had to write bout it, he would probably say “selling into news after the presidential rally, and back into the problems with the economy”. The economy is not out of the woods by any stretch and seriously, you don’t expect changes so quickly? Some asked me who I supported. Well, I am a democrat so it is a victory for me. The young prefer more risk I realised, even those in Singapore. Pretty common? They all demand change, rather than what has been tried and tested. I feel that the republicans might have gotten a lack of votes due to Bush’s unpopularity. The news reported how McCaine rather keep his distance away from Bush even though the latter endorsed McCaine publically. I guess he had good reason why he’d rather keep a distance than to be seen as Bush #2. Anyway, looking at the S&P 500, I am still not looking at a break of the previous lows. I am looking at around 900 points at this juncture. If it does come into fruition we will be setting up for a nice rebound possibly. Else, we could test the recent lows again. Worst case scenario is we crack all the way down. No good, but I don’t see that happening. I will re-evaluate as time goes by.

At the time of writing, Cathay released a profit warning. SIA shares came under heavy selling pressure. Missed it again! ARRGH. But such is the volatility. Swings either way huge amounts from day to day. U gotta have balls of steel. We have downgrades on other stocks on the HSI and SMIC got suspended. I wonder what gives. Looking at the STI chart, we have a dark cloud cover now. You might have wondered if I cut my shorts yesterday morning. The answer is no. But technically I should have. Kepcorp rebounded like CRAZY. But I held. I was talking to my remisier in the morning before meeting him for tea in the afternoon and I told him what I intended to do. I always wait for 4pm hour (I am not asking you guys to, cause you need to know what you are doing) as far as possible, if my calculations show a retracement in the afternoon. You could say it is a proprietary technique, but I told him what I wanted, and that is a shooting star. And I got it! Now if I didn’t get it, I would cut the position at whatever price it is before market closes. I have learnt through the months how not to get whipsawed out. Higher risk yes, but I have to know what I am doing. High volume on the STI by midday. That shows a lot of buying. After lunch, a lower high formed. What did I get yesterday. I went short on Cosco, ST Eng, and I bought STI put warrant. A pierce through the resistance level of 1902 (refer to yesterday’s chart) is common to fake out all the short sellers, and bring in all the longs. Very common whipsaw. The HSI live chart looked terrible, and so did the STI. Bought my put at around 4pm while having tea with my remisier. I followed him after he chose one put and went into it LOL. I had to quickly do my cut loss points, which is around 2200 on the STI and a 17c loss if I had to cut. So what do I expect out of the STI. I don’t really know. A re-test of the previous low perhaps? I cannot find strong supports anywhere else. The rebound was too fast, too furious. I told friends, any rebound that is too fast too furious is no good. U wanna see a nice retracement pull back before the next leg up. The faster and more monstrous the rebound, the bigger the fall. And I will definitely be loading short positions at resistances, like yesterday. So yes I don’t exactly know how far we will go. This would be the next wave down, looking at how HSI is performing now. However, I still see a bullish divergence on the STI. This is nice. And the only way to violate it is to crack the previous low and head lower. Hence I am not gonna pound on so many shorts at all. I am only putting out money that I have profited so the worst case scenario is if things turn against me I will lose part of my profit, but not capital. I think this is the right way to trade.

So in summary, dark cloud cover, high volume at resistance. Bearish.  I know I wrote counter attack on my chart. Mistake. Too lazy to change  Psychology behind high volume? Buying in the morning, dumping by afternoon maybe? It is quite rare to see such a high volume at resistance actually hmm….

I went short on STE as well.  I think people sold off on news. Opened at 50MA, cracked 20MA, it is worth a short. Didn’t go in too much. It is a counter with huge intraday swings but the high volume yesterday was too hard to resist.

 Cosco came in quite late. I had a trigger (thank you Jeng) and I think many of us went in short at the same time. A few queued and could not get it anymore. I believe they may queue today again. There are some very small supports along the way but I guess the TP could be the bottom, but we’ll see. Not the perfect chart but there is ample reason to go in. I think today it will trigger the sell signal. It hasn’t triggered it yet. Chartnexus course participants have a proprietary scanning rule not released to the public to scan for such sell signals. Pretty powerful, I like.

 I am looking at Ezra today. Nice set up. A crack below 20MA will see me go in short. It hasnt’ cracked yet. In fact it looks quite bullish! I need that confirmation. The confirmation will also come with a bearish star candlestick formation. Ideal. On watch list.

 Still holding onto my SGX shorts. Nice reversal yesterday. But I will be watching closely for the immediate supports. At any point I begin to spot supports holding across the board, this will be bullish and I may just decide to take profit regardless of ‘rules’ I set up. My first rule is, supports hold resistance cracks,  this shows strength. 

 Beautiful shooting star observed on kepcorp. Just what I had anticipated. I have to admit there was some form of Hope Analysis there, but there were indications yesterday that it was gonna retreat, hence I did not cut the position. I highly recommend people to stick to cut loss points though unless you really know what you are doing.  Do however be aware of the small bullish divergence though.

I have thrown out Starhub for now. No longer worth looking. Looks like a bull flag forming too but the signals are a lil too distorted at this juncture. Coupled with low volume. I wave my white flag and concede defeat on this one after I had to cut loss back then.

Crossing my fingers now. Sit tight and hopefully we will see a healthy retracement.