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...

Strategy for a Bear Market

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 ...

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!!!

S.G.X Traders

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