So far, so good. Stocks ain’t crashing the way they were expected to. Stocks are still not at an attractive price that many are expecting. But will the market be moving up or down in the next month?

I have remained bullish for the past one month, and yes global market has been rallying before succumbing to a breakdown these few days (Not including STI, this laggard has not run up much, but corrected together with the rest of the world).

Now, from the movement of STI, I want to turn to become a bear, and short or sell into any rallies. My reason, being very simple:

1) When global market is rallying, we are not.
2) When corporates announce good earnings, it did not cause the market to move up as well.
3) But when a bit of bad news is announced, it drops fast.
4) Vol has become very light, funds have stopped buying.
5) Looking at US Side, see how bond yields fall in the last few days.

http://finance.yahoo.com/q/ta?s=^TNX&t=5d&l=on&z=m&q=l&p=&a=&c=

6) And compare it with the strength of USD.

http://quotes.ino.com/chart/?s=NYBOT_DX&v=w&w=15&t=l&a=2

7) VIX climbing steadily, poised for a break above 30 level.

http://sg.finance.yahoo.com/q/ta?s=^VIX&t=5d&l=on&z=m&q=l&p=&a=&c=

8 ) STI has broke its 50 days MA.

The sudden spike in USD could be a technical rebound since it has hit its major support, but I believe the sharp rebound in USD and sharp fall in bond yield could also indicate that funds are shifting into bonds. Bond yields and stocks normally moves inversely, thus such a big movement could means that funds are already getting ready for a correction, and are seeking for a safe haven, which is none other the the T-bonds and USD. Also, VIX is climbing steadily. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge”. A value greater than 30 are generally associated with a large amount of volatility as a result of investor fear or uncertainty. Thus I think it is time to be caution. Of course, we may see STI rebounding, but I do not think it will be strong enough to break new highs anytime near.

To me, this is a healthy correction. I don’t foresee any crash, unless some major problem surfaces again. I would expect this correction to be at least 10%, so at least until STI dips to 2500 region, its 100 days MA, if not I would not be looking to buy on any dips.

Today US has announced better then expected GDP results, and the world largest economy is finally out of recession. Market is cheering on this news, but how long can this euphoria last?

But one thing for sure, on a macro level and a longer view, we are definitely on the road to recovery. (I refused to trust Elliot Waves theory this time that this correction will bring us down to below march 09 low in the next coming down wave) =)

1st Support at 2677 held.

Expect S&P 500 to hold at 1072 today. Its gap of 1075 has been filled as I type. News are mixed, but would expect s&p 500 and the rest of US market to close either flat or green. Since gap has been filled, would expect a bounce up to break new highs again. Another short rally to be seen soon.

STI: If a rebound from 2677 tomorrow, minor wave 4 has complete and will rebound to try breaking 2740 to reach new highs. Stay calm and wait for the next rally to offload. No need to panic sell at the moment because of dips. Although I have stayed bullish, but STI have disappoint me, despite global markets rallying. STI have peak out? When will it start moving? STI should be moving in narrow range until it hit 2770? Will have to wait till funds start pouring into SG market.

Many indicators are showing a divergence sign. But I would not turn bearish immediately. Investors who bought last week should should start getting ready to offload when STI hits target region 2770. Those who missed this last leg should not be chasing after tomorrow if there were to be a bounce tomorrow (tomorrow will be the last day to chase), as we are already at the tail of the rally. Stay sideline until further signals to short (or prepare for a bigger rally?)

Kepland has reported some good results. But instead, crapital land rallied. I believe Kepland still have more space to move. This will be fundamental play.

Just penning down my random thoughts in a random way.

Well from this charting method, it shows that this current rally from march 09 should end either in Jan 2010 or Aug 2010. So how true is this? I feel that Jan 2010 to end is more likely, as I believe we are in wave 5 of the rally. But will need to do a detail count because market has been moving sideways for the past 2 months. My final target of 2970, should have a high chance of failing. STI definitely has been lagging, either they have more or less peak out, or we are waiting for something big, a fast and furious rally.

STI is becoming like a lady recently, difficult to read and understand. hahaha

Chemoil has broke its 0.555 resistance with high vol and managed to close at 0.555 which is its resistance turned support level. With MACD cutting, I would expect share price to test 0.57 resistance, which shouldn’t be to big a problem to break. After which, we should be able to see it move to 0.635, its 61.8% fibo level. As Chemoil is traded in USD, it will be attractive to buy it as USD is relatively cheap now. It has also been trading in a very nice upward channel for the past 6 mths too.

Technical Buy with TP US$0.635

My Trading strategy:

Entered on breakout today at 0.555
Cut loss if it breaks below 0.525. Might sell Half when hit 0.57 and keep leftover for it to break 0.57. Use profits as buffer for the remaining 50% in case it doesn’t manage to break 0.57.
Caveat Emptor

More on their business:

Main core business is marine fuel trading and controlling all key stages of the marine fuel supply chain. A very good oil play counter. Multi Billion revenue company, with revenue doubling from 4b from 2006 to 8b in 2008. Furthermore, they have been in talks for a takeover by bigger Oil companies. A very attractive company with potential takeovers with their strong presence globally and strong stream of revenue. Big oil companies who are expanding into the bunkering area might target them.

Currently, breaking 2700 is a very bullish signal, meaning the 2700 psychological barrier has been broken. Shortists will be busy covering tomorrow, and people who has been waiting on the sideline, people who have sold during the 2 days correction 2 weeks back, will be busy rushing in to buy tomorrow if everything goes well tonight. (seems like US will be giving us a big hand tonight. Futures already up more then a percent with JP Morgan reporting good results)

I have done up some techical analysis, to roughly time when this whole rally will end. According to the T-formation, there are currently 2 scenarios: This current rally from Mar 09 will end in 1st week of Jan 10 or Aug 10. (Will post the charts again) I would not say the upside is alot now, but definitely opening shorts now is not a wise move and missing out another 100 or 200 pts of the rally will be a waste.

Just one word of caution, as much as I hope this rally will continue to break new highs forever, but when the whole market starts to get EXTREMELY BULL, we really have to be careful. (remember, everyone will be starting to buy, even people on side because they have missed the boat and would not want to miss this again. And also remember, retail investors are always the 1s who will get caught because they only believe a real rally is here when the market is actually in a topping process)

I still hold firm to selecting and buying only good, big companies at this moment, as this rally is spark off by them, they should be the ones to rally more. My personal favorites, still kepland and DBS, as they have been consolidating for a very long time already. Kepland will be testing its triangle resistance at around 2.80 region. After which I believe it should be able to break through 3 bucks. DBS should break its year high of 14$ as it follows closely to the index. Would be expecting better then estimated results from them too.

Another way to pick stocks since STI has just broke new highs, is to look for STI component stocks and buy those that has the most meat (meaning trading at a discount to their year high, because they follow STI closely, their price will at least try to break their year high too)

Good Luck to all and Caveat Emptor. MooooooOOOooOoo

Starhub has fallen 10% in 2 days. On friday, a dragonfly candle stick pattern was formed. It is a sign of reversal. Williams was in oversold territory until friday, where it started to bounce up. RSI showing some support at 26.1%. Expect a bounce back to cover the gap of 2.14-2.16 next week. Support at 1.93 region.

The big drop last 2 sessions was due to the news of them losing EPL rights. But is the impact really so bad that it led to such selldown? Got some figs somewhere. Let’s take a look at it. Figures from Q209 results:

• Mobile : 1,849,000 subscribers
• Pay TV : 530,000 subscribers
• Cable Broadband : 389,000 subscribers

Some figures from FY08 AR

• Segment Results : Operating Profit = $409,257,000 (Telecoms : $441,947,000 ; Cable TV and Broadband = -$2,977,000)
• Net Profit = $311,319,000 (EPS 18.28ct)

‘In 2007, StarHub’s major source of revenues was mobile services, which accounted for 52% of revenues, with cable TV, broadband, fixed network services, and equipment sales accounting for 17%, 12%, 14%, and 5%
respectively.’

And how many will cancel their cable TV just because of EPL and how much lesser will they earn without the EPL channel? Furthermore, they will be saving over 250mil over 3 yrs from losing the EPL rights.
So will the $250Mil (over 3 years) of savings from losing the EPL rights be able to offset the loss of EPL hubbers’ business?

Also, they have been maintain a 0.45cents dividend per quarter from 2008. Its about 9% dividend yield a year. Pretty neat as compared to many other stocks yield.

The market is confused, so am I.

I’m seeing a bullish flag pattern forming for DJI, S&P500 and NASDAQ. But indicators are pointing to a downtrend. Data released past 2 sessions were bad, or should I say not too bad, but not to expectations.

I’m seeing Hang Seng closing below its 50 days MA. Indicators pointing to a downtrend. Last 5 IPOs plunged at least 10% on their 1st trading day. Confidence lost.

Last but not least, I’m seeing STI closing below 50 days MA. Wave 5 seems to have failed. And since wave 5 has failed, this will be our 1st wave of BIG wave C downtrend. Very likely to go to a low of March 09, and no surprises if it goes even lower.

Technically, it seems like the rally is over and a correction based on wave count could bring STI to a low of march 09 or even lower.

Fear has been created. Views has been changed.

But it is not wrong to flip views quick, as the market is DYNAMIC. It has been buying on dips strategy the past 6 months. Time for a change to sell into rally for the next 6-9 months?

Definitely my bullish feeling has start to slide, but I am still not bearish due to some of the following reasons:

On a macro level, things are getting better. Banks have recapitalised and stand at a better position for any setbacks. Many companies are receiving orders again, and many companies are starting to report better q-o-q earnings. The effects of stimulus packages and fiscal policies implemented by governments all around the world are starting to kick in. But one bad effect from the stimulus package and fiscal policies, especially for US markets, is they are acting like a kid, where one has to keep feeding them with lollipop (stimulus & fiscal policies), and if you stop giving them after it has finished (deciding, OR EVEN SHOWING SIGNS to raise back interest rates etc), they start to cry.

I am pretty sure with the huge amount of USD being printed, it will weaken the value of the dollar, causing prices of oil and gold climbing and inflation will be back pretty soon. Furthermore, with such loose monetary policies and interest rate NEAR ZERO, it makes no sense for money to be kept in the bank. CASH IS NOT KING at the time being, as pretty soon I will not be able to buy the same 1$ soya bean milk at 1$ anymore. So I believe many, will start to look for tools which can hedge their money. So where what will they look for? Stocks and properties? Highly possible.

Market has definitely over-reacted the past week, calling for a big crash all over again. But stay calm and think, fundamentally, at current situation, things are on the recovery and not deteriorating like last year, so what crash are we shouting for? Unless a bigger crisis is looming without us knowing yet.

I would advocate investors at this point to concentrate on individual companies instead of the market index as this is the month of corporate earnings. Lets look forward and see what surprises will it bring us.

• A financial instrument that is listed on the stock exchange, just like stocks
• ETF consists of a portfolio of stocks or bonds and trades near the Net Asset Value (NAV) of its underlying assets. The type of portfolio will depend on the nature of the fund
• ETF is very similar to Unit Trust/Mutual Funds, except ETFs can be bought and sold throughout the trading day, through the broker/dealer
• Traditionally, ETFs tracks indexes like the S&P 500, but has thus evolved to even tracking different sector, or different style funds, international funds, commodity funds, currency funds, hedge funds and leveraged funds
• ETFs holders are eligible to receive their pro rata share of dividend, if any from the stocks/bonds held in the ETFs

Benefits of Investing In ETFs

• Lower Costs – ETFs are less actively managed, lower marketing, distribution, accounting and management fees
• Buying and Selling Flexibility – ETFs can be bought or sold throughout the trading day, unlike mutual funds/Unit Trusts which can only be traded at the end of the trading day. ETFs can be purchased on margin and sold short, thus can be used as a hedging instrument
• Diversification and Market Exposure – Buying into an ETF, depending on what it is tracking, will be able to buy into a basket of securities or a wide range of asset classes (Bonds, commodities etc), and from different markets, sectors and countries
• Transparency – ETFs have transparent portfolios and are priced at frequent intervals throughout the trading day
• Small Capital Outlay & Cost Effective – Investors can buy the ETFs listed on the exchange at its market price, instead of buying every single stock and there is no load fees

ETF basically is a very good investment tool for long term investor as it provides a broadly diversified exposure, keep investment costs to a bare minimum and may even be tax efficient to some investors. Past datas have also shown that many ETFs have outperform the index.

Sounds good? But of course, like all investment tools, there are also risks involved in buying an ETF. As ETF is made up of a wide range of asset classes, they are susceptible to market risks. In a bear market, none will be spared as well (Unless it is a Bear Fund). Also, there may be liquidity risks as there may not be much attention on it. Thus, it may also lead to large bid-ask spread which can affect the profits on the investment.

So in short, buying into an ETF does not guarantee positive returns every year, but in the longer term, a well diversified ETF portfolio, with low cost, will have better returns with lower risk as compared to funds that has short term superior performance (But rarely able to maintain consistency) with high mangement cost.

Different ETF has different risk exposure and suits different investors’ investment objectives and risk tolerance. Thus investors must do their homework before buying into any ETF.

ETFs on SGX:

• streetTracks STI Index Fund
• streetTracks Gold Fund
• iShares MSCI India
• Lyxor Asia
• Lyxor China H
• Lyxor Hang Seng
• Lyxor Japan
• Lyxor Korea
• Lyxor Taiwan
• Lyxor Commodity
• FTSE Shariah Japan 100

Yes, Hang Seng has broke new high, and still holding up strong despite another dip today to close 21472. Nothing bearish about it, HSI went up more then 1000 points, I would see it as a healthy retrace with many taking profit after it shot up so much in 2 days. As I am typing, europe market is down 1%, US futures red. If US side were to end red tonight, 1st magical number to look out for will be 21320. Even if it breaks, uptrend is still intact. HSI trending very nicely in an upward channel.

2009Sep-S&P 500 ZOOM IN-640×603

Yes, S&P 500 broke new highs too! The same for Nasdaq and DJI. US $ has been weak the whole weak, thus pushing US market (And I believe the weak dollar has helped HSI broke new highs too as HKD is pegged to the USD). 1st magical number to look out for S&P 1056! Expect a rebound around that area, hopefully able to hold. Nevertheless, uptrend is still intact until 6 months support line is broken.

2009Sep-Straits Times zoom in-640×506

Disappointed? Why is STI not breaking through 2700 despite global markets breaking new highs? STI could be the 1st market to peak, if it still does not break 2700. But after doing some waves count, it seems like there is still upward potential. Has minor wave 4 complete? Or are we seeing a deeper wave 4 correction? As US market is down tonight and a high chance to close red, I would expect STI to gap down to complete minute c of minor wave 4. Magical number to look out for 2633 to complete minor wave 4, and then we might see STI rebound back to break 2700 to complete minor wave 5 and major wave 3. Another reason for STI to pull back again from 2699 last week was partly due to the long weekend where many would not want to hold there shares for so long, thus heavy selling and profit taking. People are anticipating a double/triple top too, thus heavy selling and shorting at that area.

Food for thought: As SG goes into the long weekend holiday, BBs might be luring in the shortists by making the market look weak. Expect alot of panic selling tomorrow morning with shortists opening more short positions. We might see a strong rebound tomorrow afternoon due to BBs buying and shortist following to cover to push the market even higher.

Going forward: The week ahead..

Alright, this week we could see some heavy buying probably at the end of the week, and continuing into next week till the end of the month due to window dressing. End of 3rd quarter. Datas positive, companies and banks are stronger now with more cash and banks have recapitalised. Fundamentally, everything has changed since the fall of Lehman brothers. That was the worst that could happen. (What can be worse then a bank falling?) Going forward, I don’t think the market will dip back to march 09 period, YET. At least not in the next 1 or 2 years. Central banks around the world are coming together, to stablise the economy through fiscal and monetary policies. With so much intervention (keynesian’s theory), I believe even if a correction was to come, it will not be gloom and doom. I would not be surprised in a V-shaped recovery now (and it really seems like it) and a start of a new bull run.

Of course, the current intervention now could be the start of a new bubble, and the massive printings of USD, what will happen? A weak USD will also mean a fall in valuation for the huge amount of bonds china, japan and many of the countries are holding. And lastly, an economy war between china and US and fighting for supremacy? Or has it started already?

Swiber has broke out from its 5 sessions down trend yesterday, and today it managed to open at a high of 0.955, which broke out of its triangle and rallied to a high of 0.97 before it got whacked down all the way to close at 0.925. Selling was heavy, but is it the end for swiber?

From chart it seems like there is an immediate support at 0.92 and 0.91 before a rebound. As it nears the end of the triangle, we should see it breaking up or down, where a new trend is formed.

I believed swiber will rebound strongly from the support level as global major market has been rallying and breaking new highs, while STI is lagging behind. A break is almost confirmed, just waiting for the funds to return to singapore market, as I believe many big players are buying stocks in the US and Hong Kong market due to cheaper valuation because of a weaker USD.

Supported by signs of convergence from MACD and RSI, it should be a good buy tomorrow at around that level. A break above the triangle will suggest a target of 0.985 and if able to break the bollinger high band, it could go for a new high.

Cut loss when fall below 0.88, 50% Fibo support level.