Market Diary:
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Tuesday, March 31, 2009


Look up for breakout play!




Sunday, March 29, 2009

Market Commentary

STI hits 1,779 on Friday and reversed from there. 1,779 was the last significant high recorded on 1/29. The point of reversal confluence with a downtrend trendline resistance in the weekly chart.
Major supports based on Fibonacci retracement ratio are marked in the chart below. Additionally, 1,680 is Elliot Wave 'sub-wave 3' target which could be a good support level. The upside volume over the past two weeks are much higher than the downside volume. The odds may happen, STI may decide to break the 1,779 resistance & the weekly trendline decisively ( in TA, 'decisively' means 3% ). In that case, the next upside target will be 1,900.
Personally, I prefer STI to take a respite before hitting higher. The last three weeks' rally was too sharp ressembling the rally in Aug ~ Oct 2007. Usually, uptrend with 60 degree gradient is not sustainable and often resort into a more moderate 45 degree trendline.

There are plenty of counters that have turned bullish but I think I will wait for the market to unfold before committing on new positions.....

PS: Oscillators are not very useful during trend transition with major market move like this. Overbought could remain overbought for a long time. If you are holding long position, try not to liquidate it just because oscillator shows overbought.


Thursday, March 26, 2009

The Train Has Not Gone Far Yet !

If you are concerned you have missed the train, above is a picture of where we are now as compared to the onset of bull in 2003.
STI has risen by 300 points from March 10 to now. It cannot go on rising another 300 points every two weeks without taking a break. The index is very near to a major resistance at 1,770 ( Fibo 61.8 ). Any weakness at that point will give the late comers a chance to go long.

Olam: My broker friend has been advocating Olam the whole day!



Er...... after going through the wave count, it makes more sense to me on the market movement now!

Yesterday, I had a long lunch with two old friends. One of them is a remisier at UOB Kayhian. IndoAgri was being discussed. I have not been following on this counter and so I don't have much to say. Last night, I have taken a look at the chart and realized it was a good call. This morning, I received a buy call from another broker via SMS. Look up for the A-triangle breakout ! CCI is overbought so buy on weakness!


Wednesday, March 25, 2009

STI - Updated Elliot Wave Chart

Something new shows up in my Elliot Wave chart today. It appears the new low on March 10 ( 1,455 ) has marked the end of Wave 5. That means, the bear market has bottomed and we are now into Wave 1 of a new cycle already. The recent high on March 24 ( 1,723 ) was sub-wave 3 of the Wave 1. Targets for sub-wave 4 & 5 are marked in the EW chart below:

Based on the latest wave count, I must retract my stubborn view expressed in the previous two posts. After all, RMO is getting ready to turn bullish ( blue arrow, blue candle, waiting for bullish ribbon ). What could happen is the index may retrace to Fibonacci 38.2% to complete sub-wave 4 before it heads up to Fibonacci 61.8% to complete sub-wave 5 ( which is the target of Wave 1 ). Wave 1 is usually very short followed by Wave 2 which is also very short. Wave 2 shall be a vicious sell down making people think that the bear is not gone yet. Long term investors can enter near Wave 2 target and ride through Wave 3 ( usually the longest & most profitable ). In fact, entering at Wave 2 target is much safer than trying to guess when is the market bottom. So we did not miss the boat yet despite that I could not identify the market bottom earlier ( no one ring a bell to tell you when the market bottom has arrived so it is not an easy task. If this post identified the bottom correctly, it is quite marvellous ! )

I am putting my fingers cross the Elliot Wave chart don't play me out. I can probably un-armed my CFD and turning long from now on......!

PS: Please take my view with a pinch of sault as it is not uncommon for Elliot Wave chart to have to recount. This is as accurate as what the EW chart tells me today! The market has become very tricky & difficult and so do my view has had more whipsaw too!


Tuesday, March 24, 2009

The Market & Golden Agri

The Market:
STI closed up 2.5%, or 42.26 points, at 1706.34 Tuesday at a five-week high following Wall Street's rally amid a U.S. plan to help its ailing banking sector. Dow rallied 497.48 overnight to close at 7,775.86.
On the daily chart ( right pan ), the index gap up upon open and close the day with a spinning tops candle at evening star position ( sign of short term reversal ). The closing today sat exactly at the 100MA ( how amazing ). On the weekly chart ( left pan ), the weekly candle touches the trendline and 20MA. Both 50 weeks & 100 weeks MAs are pointing down and far apart. CCI for daily & weekly charts are oversbought.
Although STI has succeeded in its attempt to shame me the past two days, I maintain my bearish view for the mid-term ( you can say I am stubborn ! ). I attempt to short STI at 1,720 today at around 4:30pm but it was too late as the index slip back below 1,710.....

Golden Agri:
This counter has finally turned bullish today! RMO shows blue arrow, blue bar & bullish ribbon. K-line crossover has just taken place ( and there is a trendline breakout ). However, CCI is overbought so there might be some pull back ( good for entry ) before further advancement. That said, beware of the conflicting view I had for the index....

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Wednesday, March 18, 2009

Swing Trades Review

Two weeks have gone passed since I posted a few counters for swing trade with a target time frame due today. Let's take a look at how they fair:

Wilmar ( Target : $3.20 )
March 4 ( L=$2.88, C=$2.99 )
March 18 ( H=$3.21, C=$3.17 )

Chartered ( No target was set )
March 1, I called for short ( C = $0.245 )
March 18 ( C = $0.095 )

Raffles Medical ( No target was set )
March 1, I stated "it is still okay" ( C = $0.73 )
March 18 ( C= $0.78 )

Raffles Education
I was 'eying' at it as the 'next up' but did not qualify it eventually.

Some of the counters such as Wilmar and Raffles Education have gone through roller coaster ride . During the past two weeks, there were days where my confident was shaken and wonder did I make the correct judgment. I am glad all of them turn up well. Why these counters are significant to me is because they were counters spotted after I switched to MetalStock and with the aid of various trading systems & set-ups. I am really glad they fair much better than any previous call I have made using the previous charting software.

One counter definitely deserves a few lines is Venture Corp. The Swing Trade setup mentioned in my post March 7 did eventually come true but two days late. In any case, that setup was meant to track the downside momentum and squeeze the trigger when it bounces up ( March 11, blue candle ).


Sunday, March 15, 2009

Straits Times Index Analysis

STI closes up 5.6% at 1,577.52 on Friday. The strong rally broke decisively a down trend trendline ( blue dotted line ). Friday's closing hits 20DMA ( confluence with 23.6% Fibo ). This moving average has been well tested as shown by the red arrows. The last four days candlestick pattern ( circled ) looks very familiar. Unless STI is able to clear 40 DMA/Fibo38.2%, the rally on last Friday will prove to be yet another bear market countertrend rally. Get ready to short the market if STI gaps up on Monday then retrace below Friday's day high/close (1,577).


Wednesday, March 11, 2009

STI - Mimosa's Elliot Wave Target

Reference the EW chart in my last post, below is my own speculation:

Sub-wave 3 ( from "2" to "3" ):
1,766 ( Jan 29 ) - 1.544 ( Mar 4 ) = 222 ( 5 weeks duration )

According to Elliot Wave theory, Wave 3 should not be the shortest in the impulse wave. I assume Wave 3 = Wave 5, which is quite common although Wave 5 can be shorter or longer than Wave 3 ( since Wave 1 is already the shortest ).

Sub-wave 5 ( from "4" to "5", once complete, will mark "5/5" ):
1,518 ( Mar 5 ) - 222 = 1,296
Assuming if it takes 5 weeks to complete, the target date shall be April 10.

Wave 5 marks the bottom of the bear market which started on Oct 10, 2007 when STI was at 3,814. From there, the bear market has gone through a zig-zag correction where wave A ( 5 wave ), B ( a, b, c ), C ( 5 wave ) took place. If my forecast comes true, the bear market last a total of 18 months ( from Oct 10 '07 ~ April 10 '09 ).


Monday, March 9, 2009

Wave 5 Label Shows Up, Finally !!

Growing concerns of a prolonged recession and worries of weak corporate earnings for the year ahead kept buyers at bay. STI ended 3.7% lower, or 56.17 points, at 1,456.95 - the lowest since July 2003. Nikkei falls to 26 years low while Hong Kong's Hang Seng Index tumbled the most, 4.8%, to 11,344.58.

FINALLY, Wave 5 label has shown up in the EW chart for the first time today ! ! However, this does not mean we have reached the Wave 5 target yet. Remember Dow's Wave 5 label shown up on Feb 24 but after that it has plunged further? What this means was "we can see through the vally". The widespread belief is that STI will bottom at between 1,200 ~ 1,400 while Dow will bottom at around 5,500.

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Intra-day Thought

Trading is like hunting, trader is like hunter. A "setup" in trading is like an "ambush" deployed during hunting after spotted an animal lurking around. But that doesn't mean the animal will sure get trap. In the case of Venture, the setup was a valid one but we miss the trigger due to poor market sentiment. Can the trap still be used for tomorrow? Can, provided if the 40DMA line was not penetrated. As of the time this post was made ( 3:50pm ). Venture was supported by the gap created on Feb 19 ($4.13). There is a good chance it will rebound from here when the sentiment returns but the rebound will not be attributed by the same setup if 40DMA is broken. Based on Prestine, bull & bear will give way after 3 ~ 5 candles so one way or another ( regardless of which setup ), it may still be okay to pick up in anticipation of rebound.

Going back to the hunting analogy, we can either capture the animal or we can also be eaten by the animal. The bear is struggling very hard to fight the last crusade, it is good to be ware. Wall Streets has an old sayings: It takes buying to put the stock up, but they can fall on their own weight!

As awaited for a long time, STI finally came down to touch 1,473 and penetrated it briefly during intra-day. Again, I do hope that it will plunge straight toward the Wave 5 target and not go on a "L" shape dipping. The situation is like a terminally illed patient knowing the remaining days can be counted but live has not given up on him yet. To me, this is really a pain !