AAR & TOL 02 (Nov 08 - Jul 09)

[kennynah]

i did nothing about this gap play last night either....
anyways, i am not familiar...but can one not buy or sell the HSI directly ? like we can for spx, djx, compq, etc....

[winston]

I use Bulls or bears Warrants to play the indices. They move twice the speed of the normal warrants

[kennynah]

u no kidding me, right ?

[winston]

No K, I'm not kidding. For day trades, the bulls and bears warrants are the best. There's a market maker and highly liquid.

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A few Asian markets are getting euphoric eg. Korea, Japan and HK.

1) Are we thru the multi year slowdown in the economy ?
2) Where's the money coming from ? No more redemptions ?
3) Are the long funds buying or is it short-covering ?
4) I read somewhere that short-selling interest is now increasing in the US

[winston]

TOL:-

1) I think this would be a multi year slowdown. Therefore, I would not be relying too much on the earnings estimates of the Analysts, especially those who predicts a -15% growth next year and a rebound the year thereafter. I'm using growth rates of minus 15% a year for three years..

2) In this scenario, it may be best to trade the markets. When it get euphoric, short it. When there's panic, buy it.

[winston]

TOL:-

1) Why did the Asian market tanked so much yesterday ?

2) Is it becuz of profit-taking or were the Asians trying to anticipate a huge drop on the Dow becuz of the GM issue ? ( The Dow Future was at -300 at one point ).

3) If it is becuz of GM, than it's a bit of ignorance. GM is not AIG or Merrill Lynch. The collapse of the three US auto cos. will not be the end of the world. BTW, why would they collapse ? Their US workers are getting US$70 per hour compared to US$45 for the Japanese worker. They can sell off some of their Assets, reduce the salary of their workers by 25%, sell their Corporate Jets etc..

4) Anyway, I bought some A50, CSI300 and some HSI call before lunch yesterday. I think the market is trending upwards so any dips would be a buying opportunity until things gets euphoric again and people start focussing on the economy.

[kennynah]

TOL:-


4) Anyway, I bought some A50, CSI300 and some HSI call before lunch yesterday. I think the market is trending upwards so any dips would be a buying opportunity until things gets euphoric again and people start focussing on the economy.

hmmm....i am also hoping that your Calls will be of much value come Monday

[winston]

TOL:-

Dow dropped 220 points and there's no reaction in Asia. In fact, a few Asian markets are up

Decoupling ? Unless the drop in the Dow is now >300 points, it will not really affect Asia . But why is Asia going up today? Anticipating that the 3 Car Makers would be bailed out tonight ?

And look at the Property Counters in Spore. They are jumping becuz of the stimulus program in China. However, they have forgotten that the reason for the stimulus program is becuz the proprty market is in bad shape. I dont see why people would be going out to buy Chinese properties. Anyway, prices still have not really dropped in Shanghai and Beijing by that much. Only Guangzhou and Shenzhen has dropped by a lot..

[kennynah]

there is a rather far fetch possibility on this seemngly decoupling effect...

abitrageurs(who are also professional firms) were generally Long stocks and hedged against Long Put/Short Call OEX options, which explained partially the decline in indexes last night...becos, to unwind, they need to Sell to close off their Long stocks positions and then exercise their OEX future Puts in that 15 mins window from 5-15am this morning, to square off their hedge positions...

the mere fact that they are LONG stocks overall, could be taken as a cue on the sentiments of the pros...

[winston]

TOL:-

A lot of small retail investors have abandoned the markets in the last few months.

Those who are still trading the markets are very knowledgable and have alot of experience. There are also alot of experienced professionals.

Therefore, if you want to be trading against these people, be aware that they may have more info than you.

Understand your strength and weakness and act accordingly.

The above is a reminder for myself