Big Week Ahead ( 25th Feb to 29th Feb)

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 March 18.

Comments

The Week Ahead of 17th March!

Lets look at the STI and HSI weekly charts so far..... STI is still firmly in a downtrend. Any rebound from here is going to be capped at the 3000 level and a break downtrends will indicate a midterm target 2600 as the next level of support. Volume is thinning out compared to last quarter of 2007 pointing to signs of bottoming out but prices are still dropping so there's no reason to get aggressively long yet. The last bear market lasted for 2 years from 2000 to 2002 and we are currently only 1/2 year inside this bear. No one will know when this bear market will end but bull markets traditionally last for 2-3 years. Lots of speculators have lost tons of money saying " this is tooooooo cheap". To put things into perspective, the typical bull market lasts for average of 3 years. Lets say u picked the exact bottom. That would just mean u are 2-3 weeks ahead of those u invest their money when all the signs are clear. Would that make us a lot richer to pick the exact bottom? i...

Cosco Corp

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!!!

What is a BEST trade?

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...

S.G.X Traders

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