Can National Day and Olympics bring relief to our battered market?
Dow Jones was down 51.7 pts or 0.45%, closed at 11326 last Friday. The resistance level of 11634 appeared to be a resilient one, which Dow Jones has failed in its another attempt to penetrate it. The next support is at 11125. If this level were to be broken, then the subsequent support will be at 10680. If this critical 10680 level also cannot hold on, then Dow Jones will continue to decline and all hell will break loose 
NASDAQ was down 0.63% or 14.59 pts to close at 2310 before last weekend. It appeared to have found support at the 2258 level of the long term uptrend line. If this level were to be broken with big volume, then the support of 2155 will be revisited again.
S&P 500 closed at 1260 last Friday, down 7.07 pts or 0.56%. It is hovering along the downtrend line, around the 1256 level. If this 1256 level fail to hold, then S&P 500 will have further downside risk. Its next support level will then be 1219.
STI dropped 23.58 pts to close at 2906 last Friday. It failed to penetrate its long term uptrend line and the resistance level of 2961. Watch out for the support level of 2860. If this level were to broken with huge volume, then the next crucial support level will be 2746. If this 2746 level were to be penetrate as well, then the period of time whereby STI plunged almost 30% from a high of 3900 to 2746 were be back to haunt us again
On the eve of National Day last year, STI soared 111.16 pts or 3.4%. Will there be another similar rally this week around National Day? Key earning results of SGX, DBS, UOB & OCBC will be out this week, we will be able to assess how the econmic slowdown has affected the bottomlines of these blue-chips. Of course, the start of Beijing Olympics on 8thAug may also bring about a much-needed rally for the market. If there is really going to be a rebound, then it will be good opportunity for you guys to sell into strenght to exit your so-called “long-term” holdings. Pls remember that even if any rebound were to materialise, it is ONLY a rally in the bear market! I want to stress again:WE ARE NOW IN A BEAR MARKET!
Cheers 
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
Where is the market heading? How can we do Hedging to PROTECT our portfolio?
Last week, Dow Jones fell 1.1% and closed at 11370. It seems to have encountered a resistance at 11634. Like what I mentioned before, if 11634 can be penetrated strongly with significantly high volume, then Dow Jones will have a chance to experience further rally from this level.
NASDAQ rose 1.2% last week and closed at 2310. It seems to be always finding support at around 2252. Its next resistance level is 2385. If this 2385 level can be broken significantly, then it will be able to appreciate further.
S&P 500 dipped 0.2% to close at 1257 last week. It seems to have found cushion at 1256. If the downtrend line around the level of 1265 can be broken with good volume, then S&P 500 will have good chance of going higher. Its next resistance will then be around 1320.
STI closed at 2922, down 55 points last Friday. It seems to have met resistance at around 2993 of the long term uptrend line. If this level is broken, then its next resistance will be the psychological level of 3000.
Oil price has fallen to US$123 per barrel, down almost US$25 or 16% in 2 weeks!! In US, more companies are going to report their earnings this week. There maybe more bad news coming our way. If this rally can be sustained, it maybe a good opportunity for u guys to sell off your long positions which u bought last time at a good price, or what we known as “sell into strength” before the market turn ugly again.
Right now, the market is trying to find its direction, deciding its next move whether to go up or down. This is the best time to do “hedging” for our portfolio, which means holding both long and short positions. If let’s say the market tank, our long positions will not drop too much(provided that we buy really strong stocks) while our short positions will tumble further(provided that we short really weak stocks). On the other hand, if the market were to rally, our strong long stocks will go up while our weak short positions will not increase too much. In this either way, our portfolio is always protected. I strongly believe that we have to learn how to do SHORT-SELLING in a bear market, in fact it is a MUST if one want to make money in a down market. If one knows how to perform shorting, he/she can be his/her own hedge fund manager during periods of uncertainty. For your information, a person needs to have an asset of around a few hundred thousands before he/her can invest in a hedge fund in S’pore. There is little chance for ordinary folks to have the financial capability to invest in such hedge funds, which are only meant for the rich & wealthy.
Let me share with u guys on how to perform SHORTING in a correct and safe manner in my future post. Meanwhile, live and enjoy your life to the fullest!
Cheers
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
Is this Rally for real? Can it be sustained?
Bear market doesn’t drop in one straight line downwards. What happens is that after the stock market has tumbled and hit a support area, it will rebound to stage a bear rally, whereby it will “suck” in ignorant/uninformed retail investors. When the rally cannot be sustained, it will then continue to decline further. Take a look at STI below for an example.
STI melted down almost 30% from the high of 3900 to a low of 2746. After-which, it staged a sucker rally. It tried to penetrate the resistance of 3300 several times, but was all unsuccessful. As a result, it tumbled once again after that.
Dow Jones has rallied for the past few days with increasing volume, showing that the rally is backed up with strong buying. It’s K-line(a proprietary tool of T3B System to assess risk level) is also at the rock bottom, thus signalling that the risk level has already been reduced significantly. Right now, it has almost reached the resistance of 11634. If this level can be broken with significant volume, Dow Jones will experience further upside rally.
NASDAQ has rebounded from its support of 2155 with increasing volume. If the next resistance of 2385 were to be broken with strong volume, it may stage a further rally from there.
S&P 500 has found support at both 1219 and 1256 respectively with huge volume. It’s K-line has also bottomed up. This should propel it to rally upwards to the next resistance level of 1320.
STI will have enough momentum to go even higher if it can penetrate 2961 with good volume, with the next resistance at 3000 points.
US Indexes have been rallying because of falling oil price, FED curbing of naked short-selling for 19 financial firms, corporate earnings are not as bad as what many analysts have expected…etc. Did they rally because the worst is over? Personally, I do not think so. US still has many problems on hand, such the sub-prime crisis, housing recession, inflation…etc., with more write-downs expected to come along the way. So this rally may not be able to sustain for too long due to the weak US economy. For some of u guys who are still holding on to stocks which u bought since long time ago, maybe it is a good time to sell into strength before this bear rally fade away again…..
Pls trade with care, my friend! Cheers
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
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