S.G.X Traders

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...

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...