Feeling a tad ill today. My nose is acting up again.. think I need an early rest, but I got a night conf call later! URGH.
It has been a while since I charted the DJIA. Not a very nice picture at all. Bearish in nature. Can u spot the lower lows and lower highs? As u can see, we can only see it after the rebound stopped and it began to turn back down and there you have it, a high is formed. We don’t know a bottom or top is formed, till it is formed. Basically, for trading positions to be put in, I like to have a retracement, or a rebound. Best at support/resistance. Whether to go long, or short, that depends on a lot of things. Watch the DJIA.. if it cracks the low, the next level of support is seen. This level will correspond with 676 (or is it 667?) on the S&P 500. The chart as you can see is very different from the HSI and STI. There is no real reason to worry too much cause usually only the opening price may take lead. The DJIA was still doing okay but due to that very ugly candle on Monday, technically, it can be a lil hard to recover from such a drastic move down.
Overall a boring day on the STI. Many counters gave up their gains to close at its low. CItyDev, and some of the others. Some have a white inverted hammer while some are black. On most chart, it does not really form any reversal candlesticks. I actually had ascendes REIT on a short alert yesterday. It got crushed today… well on hindsight I should have gone in but seriously I do not wanna fool around with defensive plays. OCBC seemed to have cracked 20MA but I am a little wary of the low volume. I will have to continue to watch this.
S shares have been rallying today, including cosco but I hear some of their contracts got cancelled. It will be interesting to watch tomorrow…
PS : Through some observation. I found certain threads that used to be buzzling with FA talk and bargain hunting has since died down. Not only it died down, it became a ghost town. A contrarian view to that is to prepare for some upside. To strengthen the case, everywhere I hear “2009 is gonna be a worse year”. Believe it or not, with some of my own calculations, 2009 can be a better year for the stock market than anyone expected. But before one rejoices, I do not think this is the end. In fact, I am seeing this as a set up for the ultimate fall potentially. However that is still a long way to go and I will have to relook as the days go by.
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2 users responded in this post
Hey, great blog!
I personally feel that fundamentally, first half of 09 might not be a very good time to buy in. But as for the 2nd half of 09, we are not sure yet. Hopefully all goes well. What do you think?
NTUchartist
hi there. sorry i realised i forgot to leave my name behind
fundamentally it is hard to say.
technically.. which i am better at, my calculations show another retest at the low possibly, with a short term upside view. a true rebound in a bear market can be strong and last more quite a few months, even more than a year. traditionally this is where the bullish momentum begins to build but the market has its way to flush these off again. my bottom limit for STI still stands. and we have been building the sideways W pattern.. this has a short-mid term bullish bias i feel.
fundamentally, i feel, no hurry to enter. 2 reasons. a bottom will only be known when it has formed. we look back 6 months and go ‘oh so that was the bottom’. as a trader this gives us a good probability of getting trades right. fundamentally i prefer not to have my money locked in so early. i am still in a revenue generating stage. cash is king, cause u get a lot more options. who knows, that cash u did not put into the market might have better use, eg buying property real cheap. in a true bottom, there will be lots of buyers, but banks are not willing to extend the usual 80% loan hence pricing many buyers off the market. buyers will have to wait far below and this causes market to dip even further. vicious cycle. i like options… investment through shares is not the only option i am looking at. as for now, it still appears to be a traders’ market.
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