Trading In The Lion City

20 Year STI Chart

2008-01-23T23:30:00.000+08:00

Well, recently I've been asked by friends who are interested in Value Investing what has the STI (Straits Times Index) been like for the past 20 years or so. Will the recent market meltdown cause a panic so severe that markets will never ever recover? My answer is simple. According to history, the market in USA and Singapore will always recover over-time after a recession. The best time to buy a stock is during a recession's lowest. Recessions usually last between 2-3 years. So buy at 1-1.5 years after the start of the recession. If you were to look at the chart that I've attached, The Asian Financial Crisis began in July 1997 and extended all the way reaching its low at around 1999. That is approximately 1.5 years. From 1999 to 2000, the bulls dominated sending the STI from a low of 900 points to a high of 2500 points. Do not over panic during a bear market, remember that opportunity lies during times of adversity. The Great Singapore Sale is not a sale of clothes and bags but a sale during a Recession to buy stocks cheap at 50-60% discount!

Warren Buffet Says....

2008-01-23T15:24:00.000+08:00

Dear Friends, I have taken out a portion of this article from http://www.msnbc.msn.com/id/21471227/ , I hope you all read it with an open mind and invest prudently in the coming days or even months. Remember that although stock prices are relatively cheap now compared to what it was 6 months ago, how low it will go no one knows. I would advice waiting until a consolidation period before buying up. This is because it will be a time where the no. of buyers = no. of sellers. Prices will be cheap then, perhaps even cheaper than what it is now For now, we will wait for the US to weather this storm. When investors become more optimistic again, this is the point when stocks will stat to rally again, whether it is 6 months later or 2 years later, I have to remind you that there is no fast way of making money. Plan your investment wisely for now and set aside a sum every month to invest, DO NOT buy with money you do not own. There have been so many bankruptcy cases in Singapore because of this.

Of course, for those who would still like to trade in times like these, my tip is remember to take profits fast and CUT LOSSES faster. The tide is going south like i said previously. DO NOT fight the trend, it is insanity.

Buffett: U.S. subprime woes far from over

Billionaire says housing slump will affect consumers for up to 2 years

Lee Jae-hyuk / AP

U.S. billionaire investor Warren Buffett waves his hand after he arrived at Daegu airport Thursday to inspect Iscar Korea, a subsidiary of Iscar, the Israeli industrial tool manufacturer he purchased last year for $4 billion.

Yangzijiang VS SGX Round 2 Ding Ding Ding!!!

2008-01-21T22:45:00.000+08:00

Hey guys, glad to be back. Wow what an exciting trading day today. It seems that Yangzijiang has broken its support level of 1.39 today and is heading southwards toward the next level of support which is at 1.26.

As predicted, the support level which broke at 4pm today (Yes I was in class and monitoring the market Roflol) saw this counter plunge from a cool 1.39 to 1.31 in an hour.

So, whats gonna happen tomorrow? Too bad we're not gonna witness any Wall Street massacre tonight =\ *Disappointed* (My apologies to all invested long) haha~ But well we gotta adapt right? When market forces are going North, you go North When it goes south, You go SOUTH duh.... ~

Now let me open my 522 pages long Candlestick bible by Mr Gregory L. Morris and analyze today's candle for Mr. Yangzijiang here.

*Flip Flip* Lets turn to Chapter 3 Page 36. And say a short prayer. Please refer to my top left diagram.

We have witness what is known as an Bearish ENGULFING ( - ) 2 Day Pattern.

Commentary

The engulfing pattern consists of two real bodies of opposite colour. The second day's body completely engulfs the previous day's body. The shadows are not considered in this pattern. If the bearish engulfing pattern appears after a sustained move, it increases the chance that most bulls are already long. In this case, there may not be enough new money (bulls) to keep the market uptrend intact.

Rules of Recognition

A definite trend must be underway.
The second day's body must be completely engulfed by the prior day's body. This does not mean that either the top or the bottom of the two bodies cannot be equal, it just means the both tops and bottom cannot be equal.
The first day's color should reflect the trend. White for uptrend, black for downtrend. Yangzijiang was on a 3 day rebound (Uptrend)
The second real body of the engulfing pattern should be the opposite color of the first real body (Isn't it obvious Mr Gregory?).

My Take

Tomorrow Yangzijiang's gonna take a beating. How massive i dont know. But a beating im 75% sure.

REMEMBER to always put a Stop Loss of 10-15% for trading.
If you have $100 and you lost 10%, you now will have $90. How much will you need to regain to $100? Ans : $10 which is 11.11% of $90. However, if you do not put a Stop Loss and continue holding to $50, now how much would you need to regain back to $100? Ans : $50 which is 2X what is needed.

Good Luck and Let the Trading Begin. =D

Yangzijiang VS SGX

2008-01-20T15:18:00.000+08:00

Yes, its my very first post here. I was influenced by a life long friend to set up a blogging website to share my views both fundamentally and technically on selected stocks within my watch list to everyone.

As we all know, Yangzijiang has been recently included as one of the indices within the STI. Due to the sub-prime crisis and a possible recession within the United States, almost every stock exchange in Asia has been affected greatly. Yangzijiang was not spared. For 3 consecutive trading days, this counter was experiencing heavy sell-down until reaching a consolidation level only on 16th January. Overall, it has fallen from a high of 1.91 to 1.39 in 5 trading days. That is a whopping 27% fall. Perhaps the two reason why the sell-down has stopped was due to a possible Federal rate cut at the end of this month as well as a proposed share buy back from the top echelon of Yangzijiang announced on the 15th of January.

I am now here to provide you with a little technical analysis for this counter. The current support and resistance level is displayed with a chart on your top left for your reference. The top line drawn = Resistance, the bottom line = Support.

Note that i have also included the Technical reason for the heavy sell-down on the 11th of January. The previous Support of 1.84 was broken on that day itself before the massacre began. It has now reached a new level of consolidation.

Points to take note =

*The current support level of 1.39

*It is important to know that usually a massive sell down starts after the support level is broken.
*Always buy on support.

Have a nice day and let the trading begin.