Wednesday, December 15, 2010
Chapter 1
Sunday, November 28, 2010
Book Writing
Tuesday, November 9, 2010
Failure swings - RSI
Wilder also talked about failure swings. Failure swings can be used as strong indicators of an impending reversal. Failure swings are not affected by price action. Failure swings are only concerned with the RSI for the signals, and you ignore any divergences between the RSI level and the security's price level. These failure swings are found at the overbought and oversold levels.
As an example, let's assume that the RSI reaches 77. This is clearly overbought territory. Now, in the next move the RSI pulls back to 71. This pull-back does not cross below the 70 or overbought level.
The next move finds the RSI going back up to 79. If the next move down the RSI makes does not cross 70, this is what Wilder called a failure swing above 70. Wilder said that failure swings above 70 or below 30 are strong indications of a market reversal. RSI levels can also help identify trends.
Others have taken Wilder's work and expanded on it. Andrew Cardwell has developed new interpretations of the RSI in order to determine and confirm an existing trend. Cardwell noticed that an up trend can generally be seen in the 40 and 80 level. A down trend occurred between the 60 and 20 level.
Calendar Timing
But there are all sorts of market timing techniques. Right now we’re at the beginning of one called the “mid-term election year cycle”. Over 80 years and 25 presidential elections, the stock market has followed a fairly definite course during the period surrounding the mid-term elections.
Since 1931, the 5-quarters surrounding that election (one quarter before through 4 quarters after) have always been up with an average return of 25.5% plus dividends. Had you invested $1,000 in the Dow Index only during these 4 quarters (31% of the time) it would have appreciated to $68,200 by the end of 2009. A $1,000 investment in the Dow only during all remaining trading days (69% of the time) since 1931 would have grown to just $1,800.
But there are other interesting calendar-based timing rules:
- January Effect: The hypothesis that stock market performance in January predicts its performance for the rest of the year. If the stock market rises in January, it is likely to continue to rise by the end of December. This rule of thumb has an outstanding record for predicting the general course of the market each year, with only five major errors since 1950, for a 91.5% accuracy ratio. Since 1950 this trend has been repeated 32 of a possible 39 times.
- Santa Claus Rally: a rise in stock prices in the month of December, generally over the final week of trading prior to New Year. The rally is generally attributed to anticipation of the January effect, an injection of additional funds into the market, and to additional trades which must, for accounting and tax reasons.
- Superbowl Effect: The Super Bowl Indicator says that the stock market’s performance in a given year can be predicted based on the outcome of the Super Bowl of that year. If a team from the American Football Conference (AFC) wins, then it will be a bear market (or down market), but if a team from the National Football Conference (NFC) wins, then it will be a bull market (up market). The indicator has been correct 33 out of 41 times, as measured by the Dow Jones Industrial Average – a success rate of over 80%.
- Daily: On a typical market day, volume will often look U-shaped being heaviest in the first 90 minutes of the day, again in the last 60-90 minutes and usually light in between these periods, with the lightest volume occurring during the noon hour period (Eastern).
- Weekly: It’s been said that “amateurs” trade on Mondays and Fridays while pros trade mostly during the middle of the week.
- Years:
- Years ending with the digit “0” have been the worst year in the decennial cycle for 127 years. For the last nine decades, the market ended up on only three occasions for the years ending in “0”.
- Another annual cycle that comes close to being constant is the four-year-cycle with the Dow Jones Industrial Average making lows in 1950, 1954, 1958 and in 1962….there are bottoms in 1966, 1970, 1974, 1978, 1982 and 1987….the market reached bottoms in 1990, 1994, 1998 and again in 2002….It appears that [the market] wants to make a bottom every four to four-and-a-half years no matter what we think should happen. Not actually declines but there was a consolidation pause in 2006 preceding an up leg…..will 2010 follow suit?
- Options Expiration: Options expiration days can be and usually are extremely volatile with unpredictable results as to whether the market winds up or down.
- The Ordeal of September and October: While September is known to be the worst month of the year, most Crashes take their biggest tolls in October, with most Black Fridays or Black Mondays occurring during those two months. Between 1939 and 2009, the S&P 500 suffered an average loss of .33% in September… the only month when the average change was negative. Had it not been for the major crashes, October would have been no different than any other month.
- Summer Doldrums (aka “Sell in May ….”): Whether due to the fact that most Americans take vacations during the summer or because of the overlap with the September/October Ordeal, statistics bear out the fact that if investors were to take their money out of the market at the end of April and reinvest six months later at the beginning of November, performance would improve appreciably. Here are some of the facts:
- Since 1950, the DJ 30 has produced an average gain of 7.4 percent from November through April vs. 0.4 percent from May through October.
- Investing $10,000 in the DJ 30 during the “best” six-month period and switching to bonds during the “worst” six months every year since 1950 would have posted a $527,388 return. Doing the reverse would have cost the investor $474.
- The same approach with the S&P 500 index all the way back to 1945 shows November=April returns beating the remaining months 71 percent of the time.
- Adhering to the practice also would have reduced risk by avoiding the stock market crashes of 1929, 1987 and 2008.
- Lunar: Finally, many adherents believe that the periods around new moons are bullish as compared with periods around full moons (see “Lunar Cycle Update“).
All these facts and statistics are interesting but I’ll rely on the market telling me when it’s time to buy or sell; I’ll stick with my market timing indicator.
http://www.thetradingreport.com/2010/10/27/calendar-based-market-timing/
Tuesday, October 26, 2010
High Probability Trades
Friday, October 15, 2010
Monday, September 20, 2010
Monday, September 6, 2010
Strong & Weak
weak
Tuesday, August 31, 2010
trades
Tuesday, August 24, 2010
Monday, August 9, 2010
warrants competition
Tuesday, July 13, 2010
Z & 50ema5
Monday, July 12, 2010
BET
Sunday, June 6, 2010
News driven trades
Sunday, May 30, 2010
Rules
2. Buy the strongest, short the weakest.
3. Know your emotions, why fear? why euphoria
4. Do not be late for opening
5. Do not anticipate the trend and know your trend.
6. Listen to the market
Wednesday, May 26, 2010
Change of rules
1. Obey my cp, ep, tp, and not affected by how people should look at your end trades.
2. Obey ur pre-plan route
3. Do not be influenced by what surrounding says
4. Do not be late for opening
5. Do not anticipate the trend
6. Listen to the market
I am going to replace 3. with "Know your emotions, why fear? why euphoria?"
And number 5. Do not anticipate the trend and know your trend.
7. Wait for the leaders to show up after correction, selldown. Be patient.
Tuesday, May 25, 2010
Change of trend
Strongest (above 200ema, above 50ema)
F&N
Biosensors
ARA
Smrt
Singpost
Anwell
Rafflesmg
Sarin
SBI offshore
armstrong
SIA enginner
Strong (above 200ema, below 50ema)
yangzjiang
cosco
kepland
sembcorp
broadway
china fishery
m1
longcheer
statschip
Wednesday, April 14, 2010
Buys
Rotary- revenue of 500mio a year, 1.41billion order book, pe at 10 at 1.04y
yangzijiang - revenue of 10billionrmb, USD5.6billion order book till 2012, 9pe at 1.21
Allgreen - Nav 1.41
Wingtai - NAV 2.06
UE - NAV 2.46
Straitsasia - an increased production of 10miotonnes, will result in 1billion revenue, have to keep cost at 300-400
Starhub - dividend during apr 20&may23 of 10cents dividend
hocklianseng - net cash, 574mio order book, 200mio revenue/yr, 6PE
delete some posts because reviewing my lists of buys, anyway only 3 readers.
Wednesday, March 24, 2010
Misscellaneous
Wednesday, March 17, 2010
Shipping
Thursday, February 18, 2010
Rules
1. Obey my cp, ep, tp, and not affected by how people should look at your end trades.
2. Obey ur pre-plan route
3. Do not be influenced by what surrounding says
4. Do not be late for opening
5. Do not anticipate the trend
6. Listen to the market
Number 5 still is the killer, have to watch it. surprisngly nothing to add to the lis
Tuesday, February 9, 2010
What is correction?
Thursday, February 4, 2010
Shorts - SMB Capital
2. If the market trends up for two days then pray for a third day gap up so you can short the market!!
3. Trade with less size as downtrending markets tend to be more volatile
4. Be mentally prepared for the market to meltdown at any time. See traderfeed.blogspot.com on an excellent post on what to look for. http://bit.ly/945ZkT
5. If the market gaps down and there is a feeble attempt at a bounce on the Open then put your short caps on.
6. Remember that stocks go down more quickly than they go up. Take a deep breath when your shorts start working and give them some room to trade lower
If a stock makes a hard down move on volume wait for it to pop a little before initiating a short position
7. Don’t fade down moves. Fade up moves!!
Remember that in a weak market we don’t need to have a down day every single day. If we have two hard down days in a row be careful with your shorts on the third day. This isn’t September 2008. The market isn’t gonna drop 20% in a week
Tuesday, February 2, 2010
Investing
close below 10month moving average - sell
close above 10month moving average - buy
OR
13 week cross over 34week - buy
34week cross over 13week - sell
An eyeball test will show weekly wise show a faster signal but of course weekly. But what is more interesting is both occurs at the sametime, woo hoo, strike gold?
Sunday, January 24, 2010
Technical Analysis
Wednesday, January 20, 2010
Market Reviews
Sunday, January 17, 2010
Thursday, January 14, 2010
Monday, January 11, 2010
Shorts
Friday, January 8, 2010
Stocks
Ausgroup
CH offshore
hoe leong ( need a cup)
Asiafood
Breadtalk
Goodpack
pfood
tat hong
just goin through it on mind only, pls dun take signals