S.G.X Traders

This is STI's weekly chart. STI's rally last week hit the downtrend line resistance and the drop in the past few days has totally erased the gains. I posted out in my previous post on 19th Feb of the week charts and pointed out that there's still nothing to be bullish about yet. Incidentally that was the best point to short! Now with STI heading downwards again, I would think there would be an inevitable retest of the previous January lows at 2750. A successful bounce off 2750 could be a good start to end this bear market. Falling past 2750 could see STI drop at least till 2500 region. Until then, I would prefer to still hold cash and wait and see. Its not time to pick up long term holdings yet!

What are the characteristics of bear markets? 1) Downward trending movement of almost all stocks. 2) High volatility. Huge Gaps and fierce intraday movements. How to survive in bear markets? As investors, take out money from all your stocks to hold cash and wait till the bear market has ended. No point trying to catch the bottom. For traders? Manage your risk well is key. Bear markets have the sharpest rallies and the most huge downturns. They can catch anyone off guard and wipe out all your trading capital in an instant. So risk management becomes key here. My current plan is to keep my positions and exposure small. What do I mean? Exposure means time spent having a position. I normally take only intraday positions and seldom have overnight positions. Positions are kept small to minimise losses. Tight stops will also help. I do not need to trade large positions as volatility is big and a move in the correct direction can yield very large profits even if position is small. Tight stops

This is from this book I am currently reading " Market Wizards: Interviews With Top Traders " U can find this book here . It talks about what's the component for a best trade. 1) Fundamentals 2) Technicals 3) Market Tone. All this 3 must be present. Firstly, the fundamentals should suggest there is a imbalance between supply and demand, which could result in a major move. Secondly, technicals which is the chart must suggest that the market is moving in the direction the fundamentals are suggesting. Thirdly, when news comes out, the market must react in a way that reflects the right psychological tone. For example a bull market should shrug off bad news and react vigorously to good news. Lets look at the above 3 conditions and examine our current market situation. 1) Fundamentals suggest that world economy are not going to be as doing as well as past 2 years for sure. Tightening of credit conditions means that less money is going to be following around. Much less flowing i

Today is Thursday on the 28th February 2008. Did you know that this year is a leap year? I have a feeling that STI will see blood tomorrow on 29th Feb 2009. Here's why. As u can see from the chart, 1) STI past few days tried to cross above the 3120 resistance but it cant. 3 black candles on moderately high volume was formed. All below the resistance. And this is coupled with the fact that Dow rose 100+ points each day for those 3 days. 2) STI shows a trendline break today showing its first signs of market weakness.Very yummy! 3) STI incidentally is at the resistance at the 50-day MA and as I've pointed out in earlier posts, the major trend is still down and any sign of weakness has to be acted upon! I bought put warrant STI3100BNPeP080328 at 18 cents during closing time. Cheers. Hope it works out. I will expect STI to find support at the 3k mark. 29th Feb 08 Uodate : Dow saw blood...STI down 45 points at 3028. Sold my warrants at 0.205 for a net gain of 13.8%! Cheers...

Cosco Corp is still in its long term downtrend but it has already broken out of a short term downtrend which started since Jan this year and retraced back to its breakout point. Currently it rests upon the support line and any bullish market movements will likely take this counter to test the $4.60 region. The chart looks similar to SGX but Cosco is still at the support of the short term support line and if market can turn bullish, ie STI crosses 3120, this counter can easily run up to $4.60 and test its long term trendline resistance from here. Update : I cut out of this counter....Market turning down. Normally All consolidations always breakout in the direction of market trends. Now market is turning down...Cosco has no chance!!!

From the chart, we can tell SGX is still very strongly in its long term down trend. The 50 day moving average has just crossed below the 200-day moving average and trendline indicates SGX is still going to go down and is currently still experiencing heavy selling pressure. There was a significant breakdown from its support line 3 days on 22nd Feb with higher than average volume at 8.80++ region and it fell to today's low at around the $8.50 region. RSI is currently in the oversold region but this is not a signal to buy. Oversold indicator's are never a good reason to buy any stock. One good example is on the 14th Jan where the stock entered the oversold region. It was at $11. 6 days later, SGX hit a low of $8.10 and it is still in the oversold region. So if u are lucky and bought at $8.10, kudos to u. If u bought anywhere from $11 to $9, Amen....Even if you held on to the stock, the bad market sentiment and huge drops may have prompted you to cut loss early and give up on the l

HSI weekly chart Absolutely nothing to be bullish about yet! HSI daily chart indicates that a close above 24400 will indicate a test of 25500. HSI has been trapped inside a trading range of 23000 to 24400 for around the past ten sessions. Any movement pass this trading range will likely push the market further in the breakout direction.

Dow Jones went up 189 points yesterday and our STI opened and gapped up at 3099 and closed +16 points at 3077 . The question in most people's minds is why the market went down today from opening. One common trade that most speculators or traders take is when dow goes up around 200 points, they safely ASSUME that STI is going up. So here's the truth : When dow goes up 200-300 points, 1) Stock prices will surely open higher --> TRUE 2) Stock prices will surely go up from opening price --> FALSE So what determines whether the market is going up or down after the opening bell? U can see from the previous post of the STI chart that STI is still within the trading range resistance of 3120 and has not yet broken out from the trading range even at OPENING BELL with Dow's bullishness of +200 points. If the market cannot go up, it shall come down. There were other fishy indicators in the morning also, Nikkei was up only 30-40 points in the morning and Hang Seng dropped stra

STI has been stucked in a trading range of 3000 to 3120 in the past 8 trading sessions. Any break out of this range will very likely be very significant. A close below the 3000 mark will lead STI to test the 2800 region again while a close above 3120 will likely spur the market very bullishly. Right now, the main trendline is still down. The 50 day moving average is still moving downwards but we had a "washout" day on the 22nd of Jan so maybe this is the bottom but this should not be a time to empty your banks to buy "cheap" stocks yet. The main trend is still down and it will take a lot more work to come out of this bear market. The week ahead is fairly packed as we have expectations that the bond insurers in the US will get bailed out this week. Monday : US Home Sales Report Tuesday : Producer Price Index and Consumer Sentiment Report Wednesday : Bernanke will speak to the Congress. The markets are expecting another 50 basis points cut for the FOMC meeting on Marc

Take a look at This Chart...Looks Ugly? This is the STI weekly chart. We are caught in a very strong downtrend ever since Oct'07 and now we are right at the tip of the trendline resistance. Now seeing the chart, I think there should not be any staunch bulls around.Do not take the rally of the past five days as indication that the market is back.... Its a bear market now and two things we want to be very sure of in a bear market. Resistances are always very real and strong. Supports are NEVER present. Investors/Speculators lose their pants trying to pick the bottom or chase running stocks. Do not try to force your opinion on the market. Market is always correct!!! Right now, all long positions should be sold off for the sake of safety....and we should await further signals from Mr Market before taking long positions again.