DBS revisited... again

For those bulls, redemption might be near, or is it? We've seen the spike, we had the rally, the bears are trying to push down Singapores Financial behemoth again, will they succeed?

Do Rate Cuts Really Work?

Is the Rate Cut really of any help?

I leave you to be the judge,

chart attached 6mth trend since subprime and consequential rate cuts, dj and usdjpy....

Top charted my longs on euro. I'm done with the USD.

Anyone rooting for the USD?

?The weeklies are telling us some interesting developments of the USD.

Majors have indicated a possible reversal to USD weakness esp afetr the emergency rate cut by the Fed, fundamentally prostituting the USD.



But CAD AUD and NZD still indicates sustained USD strength.

Hard times. Is the USD really bound for death? Looking at the way the interest rates are being cut, it wouldn't be long before we take USD our new favorite carry trade vehicle. heeeh.

Update on DBS

Look at her go...can we see $15.50? Well thats a target, for me at least. Annuoncement due in mid Feb, we'll watch the developments till then.

We have suddenly seen huge price swings, extreme volatility, difficult times to trade. A word of advise for fellow traders, keep the stops HUGE and reduce the overall exposure, we are gonna see plenty of slippages.

AUSUSD Demo Trade Update

Well since this is a demo trade...no point flattering myself, just updating the position. Oh btw the account opened today, i'll be TTing the money tonight and should be ready to trade in a day or two.

Demo Trading the AUDUSD

Since i'm still waiting for some account matters to clear up with the broker. Allow me to share a setup i took with the Aussie.

DBS Annihilated

STI's big cat just broke a 6mth low, it seems like financials around the world carry one strategy. Sell... All time high cemented at 23.00 current trading at 18.20. DBS has lost 21% of its value since the high. Have we seen value? i'd suggest, staying aside.

Why Your Trading is Doomed

An interesting article, introduced to me by a fellow forumer in FF. This is why setups and stop management are so annoyingly important.

Author: Jordan Knight
@ 1888 Articles.com

The single most important aspect in trading forex is to stay in the game, which means not to blow up
your account. Whatever method of trading that you employ will not earn you
profits if you keep on blowing off your hard earned profits or your account on a
few losing trades.

The single most important aspect in trading forex is to stay in the game,
which means not to blow up your account. Whatever method of trading that you
employ will not earn you profits if you keep on blowing off your hard earned
profits or your account on a few losing trades. There are many traders out there that boast high returns but almost all of them
will be followed by similar magnitude of losses that will bring them to break
even or even total loss.

Even the best trader in the world can only make up to 30% average return
per year and yet you are fooled to believe that you can make better than that.
Many profitable trades are offset by losses brought about by potential wins went
wrong. If only one can know before hand which trades will be profitable, the
losing trades can be avoided. However in reality, this is impossible and this is
why we have to assume that all trades will be profitable and hope that the
winning trades offsets the losses.

A common mindset of new traders is, risk is acceptable to a larger degree
while profits must be locked as soon as possible. This is evident in many forums
that highlights the use of trailing stops as small as 10 pips. If you have
traded long enough, you will realize that even 60 to 100 pips can be considered
as market noises and they are virtually unpredictable. So any small trailing
stops are bound to be hit. Given the small capital that most new traders have,
they are left with no choice but to employ such ridiculously small stops. When a
trader has a small profit, the greed and fear kicks in that even before the
target is reached, the trade is closed with a small profit. This may seem like a
safe option, but in the long run, it is the system that matters. What guarantees
success is a system that is religiously followed. Emotion and greed have no
settings or parameters to be fiddled with, and they are truly subjective. So how
one can determine which 'settings'of greed and fear that work best? This is
where a system comes into play. A good system takes away the emotion and greed.
A good system has parameters and settings that can be fine tuned unlike emotions
and greed. And when the best settings are found, the system can be used with
huge success no doubt it will never be perfect.

In real world, the successful and wealthy traders made their fortune slowly
and steadily through careful risk management and very wise leverage use. However as a small
trader, low leverage may be too slow. There are ways to make profit like the
hedge fund managers using high leverages, but these methods are often
overshadowed by the false promises of so called forex gurus and brokers that
entice newcomers with ridiculously high profit potentials.

Every method that you employ will fail to work if these methods of trading
management are not employed. After scouring numerous sites and forums, I have
never seen any traders utilizing these trade management ideas. Now this sheds
some light on the saying that 90% of traders often fail!

So can this be the holy grail everyone is searching for? For me, the answer
is yes, the holy grail in forex trading lies in trade management. However, to
attain this skill it needs years of experience and the sound knowledge of your
own self!

Euro Vs Aussie

Is it just me or has 2008 been very difficult to trade?

Look at the two charts i posted and tell me how would you trade this. Would it be a good idea to short? Or should i wait a little longer for another bullish confirmation bar be on the long side? What do the pros tell you to do when you are not sure? just step aside and let the old boys show you how its done. oh well....

The Sterling Attraction

So, we have reached an important point in the Sterling trend. At the current price it is trading at factoring the interest diferrentials, it would be hard not to suggest that we have likely been given the possibilty of collecting some sterling at a very very attractive offer rate. Further anticipation of interest rate cuts in the US could further fuel a cause for more upside of this currency. I'll be looking to stream in to some entries from the lower time-frames.

STI Consolidates On Speculations

Since the subprime alert during July 07, we have seen the STI achieve a new level of volatility. While the Index has succesfully computed a new high, much has to be asked abt the current market sentiment. If we we to collectively correlate the price movements of the DJIA against the STI, one could note that both our markets have actually been moving in tandem.

The correlation suggests that the weakening trend in DJIA will likely affect future prices of the STI. At the current moment, one could digress that the index is currently slated in a very consolidative mood. Events unfolding in the US for the next few weeks would determine the indicative direction our STI would make.

For now, i'd say oscillation plays between zones 3300 - 3600 would be the best bet if one has desires to speculate.

Singapore's GDP grew 7.5% in 2007

Happy new year! Wishing everyone a blissfull 2008.

Ministry of Trade & Industry has just released the latest GDP report for Q4 of 2007, which also completes the year's GDP cycle for year 2007. As we could see, compared to 2006, the GDP has dropped by -0.5% compared to the growth of 2006, at the same time, lets note that the nation is still facing inflationary pressures, attributed to rising prices of almost all commodity vehicle.

Manufacturing sector not only concluded a hugely decelrated growth in Q4 but if we compare it to data mined from 2006, we are seeing a significant slowdown of growth in this sector. In effect, this would definitely have caused by a reduction in consumer demand and exports.

On the contrary, the construction sector has seen one of its biggest growth in 2007, backed by buying demand for housing, 1-2 years down the road, expect supply to overtake demand, evident in the current activities in the construction sector.

As for the overall face of the Singapore economy, i must conclude that 2006 through 2007 has seen one of the finest growth in the new millenium. But note that as we are slowing down on GDP (expectations as reported for Q1 2008). We are still facing the overbearing fact that prices in commodity will continue to rise.

Report : http://www.singstat.gov.sg/news/news/advgdp4q2007.pdf

So we await the Q4 results for Avg Monthly Income Reports

We have seen the the CPI for year 2007, a whopping 4.2%, and all lights are flashing red.

But how are we going to create a solid fundamental view on the prevalent economical climate of our nation? I'd suggest you take look at the Q4 results of the average monthly income report.

Currently, as it stands the avg monthly income of a Singaporean is at $3,481 a drop from Q2 $3,578. That said, we could argue that the drop could be a mere seasonal adjustment due to the fact that 2006 displayed similar trend in data (with less volatility though), see below,

Q2 2006 -3,297
Q3 2006 -3,256 (-1.24%)
Q4 2006 -3,961 (21.65%) CPI For 2006 = 1%

Q1 2007 -3,903
Q2 2007 -3,578
Q3 2007 -3,481 (-2.71%)
Q4 2007 -????? (???????) CPI For 2007 = 4.2%

Granted, Q4 Data for monthly income must be bullish to complement the inflationary CPI Data. Next issue would be, how bullish should the data be? I will assume that we should see at least an equal increase in percentage compared to 2006 Q4 data.

Anything less would mean the pockets of the average Singaporean will hurt for 2008 and it would mean an early signal that the economy has thus reached a peakish momentum. Please note that i mentioned economy, not the markets, i'm expecting this will slowly work it way into the market in q3 or q4 of 2008.

Thus a bullish q1-2 of 2008 will prove a classic divergence with the statical data and investors should be advised to excercise prudence.

best regards
jest

Will The Buying Dry Up?

We have seen that practically almost everything is going bull. 2007 has been a memorable year indeed, a year where our market and major currencies reaches unprecedented heignts. The strengtening of Singapore currency has encouraged our Singaporeans to travel more and we are likely seeing the good 'ol 90s replayed.

The emergence of China as the new up and coming economical behemoth, has caused the face of economics to take a huge restructuring, no longer can we depend on US statistics as the main indicator to guage the world's financial health. As money keeps sprouting froom every roots of developed asian nation and it seems like good times are here to stay... but is it really here?

While our nation has increased our surplus, we have to note the current scheme of renumeration for our citizens, has it been helping us to face the current inflation? Feedbacks were stall holders are facing high prices, forced to raise the price of their food but barely making much profit.

Lets not forget the US housing frenzy has driven the world's Housing market to go into a massive bull run (BS run that is where now we question the AAA collaterals) until some one opened a can of worms.

Credit and Life

So how did we suddenly become so rich? Have we ever wondered where did all this bursting liquidity in the current economical climate really came from? US has shown huge cracks in their credit setup, Euro is leaking fresh blood, how many more bad news can we chew up before the credit beast starts knocking on our doors?

Ask yourself, are you still under credit? House, Car, entertainment, bills, taxes, we are paying for almost every item we desire here and bargain hunt is a long foregone conclusion. Almost every average Singaporeans owns a car (with a 10 year loan on $1 installment), sounds good eh.

Ignorance is bliss but before we know it, when all the liquidity starts drying up and defaults start knocking on the doors, will the harsh reality surface? debt is evil.

Financial Bang

As stated, the financial markets of 2007 ended with a bang with no lack of scare and drama. Investors expect a spillover to carry on to 2008 drivng the markets further and higher, while this can be true, we can expect a strong fundamental divergence to surface in 2008, while price rises higher, prepare to face lesser potential buyers. As prices accelerates beyond any comprehension, citizens will start to feel the pain of buying.

Will we ever see the tipping point?

Buyers expect prices of houses to go higher, which may be true, but, ask ourselves this question, can the general population with the median income scheme, afford to pay such high prices? What have the goverment done to aid this? We are indeed resting in a very strong psychological and physical barrier.

So, who is the smarter one? The buyer or seller?

Mantra...

September was definitely worth remembering, it was a good month. While i did not make much of the market as compared to some guys, what i can be proud of is having Zero losing trades.

Anyway, i'm getting impatient here.

The USD's not showing any signs of retracing and the build up to Oct interest rates statement could mean more oppurtunities. I just need to knock some sense into my head.....NEVER GO AGAINST THE TREND JEST!... Now don't even think of shorting the GBP.

But the Aussie, geez! Aren't you tmepted to short it??? Never play with fire...NEVER....arghhh the devil! Never! Patience please buy the retracement. Patience...

Shopping! Here's the list...

Yes. I'm intending to satisfy my craving...my lust...for books.

You gotta love Amazon, look at the sheer amount of books they have. Anyway for those who are interested to have a sneak peek at my wish list...

1. Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets - Steven Drobny
   
2. The Alchemy of Finance (Wiley Investment Classics) - George Soros (thanks to Kancheong for reccomending)
   
3. Pring on Price Patterns : The Definitive Guide to Price Pattern Analysis and Intrepretation - Martin J. Pring (thanks to Mike for reccomending)
   
4. Peter L. Bernstein Classics Boxed Set : Capital Ideas, Against the Gods, The Power of Gold - Peter L. Bernstein
   
5. Mobs, Messiahs, and Markets: Surviving the Public Spectacle in Finance and Politics (Agora Series) - William Bonner
   
6. The Age of Turbulence: Adventures in a New World - Alan Greenspan
   
7. Inflation Targeting: Lessons from the International Experience - Ben S. Bernanke
   
8. Trader Vic--Methods of a Wall Street Master - Victor Sperandeo

I still have a line waiting in the saved list but i guess this should be enough to keep me busy for the net 6months or so.

FX Trades and more ramblings on the Dollar Index

I have just cleared two trades with a gain 180pips:

SHORT AUDJPY @ 100.12, bought back @ 98.75 for 137pips
SHORT GBPUSD @ 2.0205, bought back @ 2.0152 for 53 pips

The performance as below,
SEP
Realised Loss : -0pips
Realised gains: +704pips

YTD
Realised Loss : -295pips
Realised gains: +709pips

On the Dollar Index

I'm not trying to play against the trend but as we look further into the Index, the weekly and the daily is suggesting that we are likely to see a bottoming formation in the near term.
The momentum in weekly Macd is showing signs of weakening, RSI 14 at mark 30 proved to be a strong support zone for the index.

On the daily, the candles showed signs of weak downward movements, as if its not willing to move down anymore, well it could be consolidating, we'll just have to see from here. Technical indicators like the MACD and RSI are already showing diverging signals.

Why is it safer to go long on the dollar now? One, you can set close stops. I personally believe so because the dollar has never been so attractive, and no other dollar pair, other than the Euro has managed to cap a new high against dollar even as dollar keeps making a new low...esp the GBP, its proving to be very very vulnerable as of late. I have made a note to myself to keep the GBP shorts on dollar rallys until the credit fears in Britain eases.

Chart Focus : DBS

For pakbosee,

I have attached the requested study in a picture below. Please read with discretion.

Chart Focus : Observations on Correlations

Will the Dollar Index ever retrace? It seems like almost every other currency has been treating the USD like a worthless piece of paper except for one....the GBPUSD. So here's the plan, i'm expecting a retracement to occur on the selling real soon, and most likely the worst hit will be GBPUSD. Considering its weakness and what not. So when it comes, i'll remind myself...short the Cable, just hope we don't break the circuits.

Chart Focus - Mini Dow

Dow is approaching reistance areas, 14000 - 14100 should be closely watched. Expect to see some selling done at these price level. For patterns, we are likely looking at a possible double top or a range breakout indicating dow making new highs. At the current price level and considering the fundamentals i'm very tempted to play down the bullish sentiments.