|
Finally ! 2008 Is Going Into History
STI closed today at 1,761.56 ( -9.09 ). Exactly one year ago, it closed at 3,482.30. We have lost 49.41% the last twelve months ( HSI was downed by 48%, the worst performance in 34 years. DJIA lost 33.84%, the worst since 1931 ). More than S$400 billion has been slashed from the combined market capitalization of companies listed in the SGX.
.
Among the many things I have learnt this year in trading. The most important two are:
.
1. Never trust analyst's reports. When the going is good, they issue buy calls repeatedly with higher and higher targets. When the going is bad, they are quick to downgrade the counters and slash targets to match current price level ( to help save themselves face from making the wrong call in the first place, I guess ). There isn't value proposition in their reports because they are not giving you insight that you as an amateur did not know but they are claiming credit by telling you what you have already seen from the current trend.
Here is a good example:
.
.
The target for Synear 14 months ago was $3.10. Today, this counter closed at $0.265. Of course, our dear analysts have downgraded the targets from $3.10 to $1.70, $0.60, $0.35....etc. The question is how did they derive the $3.10 when they issued the buy call? What has been changed to the company in 14 months to have caused the valuation or fair value to go down by ten times? If the reports are not based on fundamental, then it must be pure speculation riding on the prevailing market trend!
.
2. Never heed rumor! 12 months ago, everyone rushed into accumulating S-Chips on the backdrop of QDII coming. Where is QDII today?
.The latest Elliot Wave chart seems to have something new to tell me. Wave 5 may not be as bad as I thought. Not sure yet, development still in progress..
Anyway, I believe the inauguration of Obama & our Singapore Budget should bring some cheers to the local stock market in 3rd week of January. .
2009 - a better year!!
Labels: Trading Digest
STI - Artificially Pushed Up
Although I have expected STI to edge up this week due to window dressing, the rose by 54.96 points yesterday ( +3.2% ) was pretty artificial. Much of it ( 22 points ) was attributed by an error trade ( I think ) with CapitaMall which rose from $1.61 at 4:59pm to $3.00 ( 2000 lots ) at 5:05pm at preclose. This morning, the opening price was back to $1.66 ( 12 lots ) at preopen. I wonder how does this happens and how does this get "adjusted". I remember similar thing has happened to DBS and UIC before. Just a quick entry here for future reference when similar situation occurs again....
PS: The rose by 54.96 points yesterday did not change the Elliot Wave count.
Edited at 5:15pm ==> One of my brokers believed the unusual transaction for CapitaMall yesterday was due to an error made by someone who wanted to buy Capitaland but keyed wrongly as CapitaMall. This explanation seems to make sense as Capland was traded at around $3 yesterday. But still, how can this happen?
Labels: Trading Digest
On The Verge Of Breakout
.The chart above is my own speculation of how the index will move. The apex of the symmetrical triangle is drawing nearer and nearer. STI is on the verge of breakout either side ( up or down ) but my bet is on the downside since it tallies with the Eillot Wave wave 5 prediction.
Labels: Market Direction
Status Quo
No change in my view, STI is still heading for one more leg down based on Elliot Wave count. I do not know exactly when but it is going to happen. Due to the holiday season, volume is extremely thin. It does not take much effort to hold prices. My view, driven by technical, tally with the view of ST Market Correspondent Mr Goh Eng Yeow who stated in his blog "There may simply be a selldown sometimes down the road. The question is simply “when”. 
On the Elliot Wave chart, sub-wave (ii) of Wave 5 may be forming as shown above. However ,if the index pushes beyond the 1,844 ( Dec 10's high ), a recount may be necessary but that does not change the big picture - we are still in for a Wave 5 down wave in the immediate near future. My wild guess is anytime between now and March. But
STI has been trading in a congestion zone of a
symmetrical triangle, a breakout on either side should take place sooner than March!
Labels: Market Direction
Déjà vu ?
Everyone are bullish about the market ( eg: CNA Market Talk, SI Forum...etc ). I am the only fool who continued to think otherwise. I have exited my position today for SembMar, barely breakeven. I am still sitting on some profits for Synear. Will let go anytime.....
Doesn't the Elliot wave count and classical chart pattern for the two periods below look similar? Even if I am wrong, I followed faithfully what I have been taught -- "if in doubt, exit first".
Counters' Benchmark - October 28 Low:Capland....: 2.40(L), 2.64(C)Cosco.........: 0.605(L), 0.705(C)ChinaXLX : 0.27(L), 0.28(C)DBS .......... : 8.87(L), 10.20(C)FraserCom: 0.21(L), 0.225(C)KepCorp... : 3.35(L), 4.15(C)OCBC........ : 4.41(L), 5.11(C)SembMar : 1.15(L), 1.30(C)SGX...........: 4.15(L), 4.99(C)Synear...... : 0.11(L), 0.14(C)YZJ........... : .275(L), 2.95(C)Labels: Market Direction
Conflict Of Signals
I have been bullish* about the market since Nov 23. I have expected the index to head toward 1,900. I think it was a close call as the index did hit 1,844 on Dec 10.
In the classical TA chart, STI is still in good shape based on moving average, trend line support, Parabolic SAR & MACD...etc. However, in the Elliot Wave chart. The onset of Wave 5 is either here or very near**. Wave 5 is expected to bring the index down to below Oct 28 low of 1,473. This process may take a few weeks to few months to complete. Classical TA is trend lagging and won't be able to tell this part of the story. I am not sure how reliable is the EW chart I monitor. Everything I say here is on the basis that the chart don't lie. Should the prediction comes true, it will be a golden opportunity to buy near the bottom of Wave 5 because at the end of Wave 5 will be the start of a new 5-wave ( up ) cycle.
Again, what I stated here ( about Wave 5 down ) may not happen immediately such as on Monday, Tuesday or next week. It may take weeks to realize the general trend has turned bearish ( some up days, some down days.... but down days are either out numbered up days or are heavier ).
* bullish does not mean the bull market has returned. In a bear market, there could be rally causing the index to gain 100 ~ 200 points in a short time span. This is what I meant by "bullish". Someone has mis-understood me so I thought I should clarify.
** 1,900 ~ 2,050
Labels: Market Direction
December 11 EW Chart
Accoding to the EW chart above, it seems like wave 4 has completed. If the Chart is reliable, get ready for another rough ride. Again, the wave count label may still change but the onset of wave 5 is near regardless ( if it is not already here yet ). Tomorrow, I am going to cash out my little profit from those positions I took on Oct 28 when the index was at 1,473.
Labels: Market Direction
Updated EW Chart
STI rose 95.41 points ( 1,754.58, +5.8% ) on Tuesday and extend gains today by another 67.12 points ( 1,821.70, +3.8% ). The rally toward 1,900 has been anticipated if you look at my recent posts but the gains within two days by 162 points is more aggressive than I thought.
In the EW chart, warning sign begins to loom due to the aggressive rally toward wave 4 target. We may not need to wait till CNY to see wave 5 kicking in. However, the wave count label may still change as the days go by so take this with a pinch of salt.
Labels: Market Direction
Especially To Bro Jeff!
Thanks for leaving your comment! Ya, I think what we see now are bear market rally. ( opposite from bull market correction ). I am still waiting for wave 4 to complete ( 1,900 ~ 2,050, Tgt B4 CNY? ) and enter at the end of wave 5. Hey, I didn't know you know Elliot Wave!! Will MSN you to talk more!
Labels: Market Direction
Market Digest
DJIA plunged 679.95 points or 7.7 percent to close at 8,149, the fourth-steepest point loss in history for the blue-chip. The sharp plunge was attributed to the confirmation of the world largest economy has entered a recession. Locally, STI tumbled 51.05 points to 1,639.18.
Labels: Trading Digest
Anyway, I believe the inauguration of Obama & our Singapore Budget should bring some cheers to the local stock market in 3rd week of January.
