AAR & TOL 02 (Nov 08 - Jul 09)

[kennynah]

bro..."ready"....just get ready nia, off the safety catch first....
everyone will have a target fire off point (maybe some perceived resistance point) ....means.."own time own target...fire"...

[winston]

Not sure I want to be shorting the markets now. The momentum on the upside is just too strong. So better to uncock the gun and wait for another opportunity. If you keep the gun cocked, then there is a chance of a misfire

[kennynah]

agree..... my view remains...bearish short term... but i take your advice...stay flexible...

[iam802]

I think Winston mentions before.

The funds are preparing themselves for this quarter redemption.

And it normally takes place between 45-60 days ?? (from the quarter)

With this in mind, it is good to put a small little reminder for Nov 15. (about a week from today).

Trade with care.

[winston]

Are people selling into rallies or have they switched to buying on dips ?

I get the sense that they have switched to the latter ...

[kennynah]

same thoughts/observation

[winston]

Therefore, it may be quite dangerous to buy puts on the indices...

Today, Shanghai flew about 3.8% on no catalyst and whenever HK drops, there are buyers that would come in to buy...

[winston]

TOL:-

After the market has dropped alot, it may be time to switch to "Time in the Market". That means having a position before the market takes off. Because when the market does takes off, it may be a sharp one as seen about a month ago and it would be quite difficult to catch it...

1) So how does one differentiate between a Bear Market rally and the real Mc Coy ? Does it mater ? Both are a rally

2) The slowdown is being felt on Main Street now and may last years. Wouldn't one be too early if one buys now ?

3) Maybe it's a trading market ie. buy and then sell into the rally and when it corrects, then buy again. Instead of a "Buy & Hold" strategy which only works in a Bull Market..

4) So does one then buy the indices, a certain industry or individual companies ?

5) If a certain industry or individual companies then which ones ? I've been struggling with this one for the past two months and till date, I have not found any compelling buys. I've 532 Sporean companies on my Watchlist and another 346 in HK and I still cant find a single compelling buy now! Believe it or not ? Maybe I'm too picky...

The above are my random thoughts on a freezing cold ( -10 degrees C ) Saturday evening.

Please feel free to exchange your trading ideas here.

Take care,
Winston

[kennynah]

in my opinion....buying stock indexes can be for short trades, as they gyrate from resistances to supports....and it is easier as they are overall indicators of moods and sentiments....

for individual stocks, whether playing actual stock or its derivatives, they can be picked for a longer term play...whether one uses FA or TA... a longer term position allows for a wider stop loss points but on a corresponding sized position....this is meaningful bcos the intention is for this position to reap meatier rewards and so allowing for a bigger risk undertaking...this is markedly different from the short plays above, where size can be larger but with a smaller tolerance for cut loss target, with a smaller profit target as well....

putting the above aside... some people actually trade "gaps"; ie on days when indexes gap up or down at open. becos most gaps are filled in a short time frame, some traders fade the trade...ie if mkt gaps up (along with a list of parameters to watch out for), they Short the index futures with anything from 1:1 to 2:1 risk reward ratio targets. they dont open a position without simultaneously entering the stop outs..if you are interested in this trade technique...please read up what the key parameters are in determining whether or not to do this sort of trades...suffice to say, looking at Volume of preMarket activities is very important.

[winston]

some people actually trade "gaps"; ie on days when indexes gap up or down at open. becos most gaps are filled in a short time frame, some traders fade the trade...ie if mkt gaps up (along with a list of parameters to watch out for), they Short the index futures with anything from 1:1 to 2:1 risk reward ratio targets. they dont open a position without simultaneously entering the stop outs..

Hi K, thxs for your kind sights.

I've been thinking about these gaps at the opening. Normally, a big gap determine the market direction for the next hour. And the best time to take a position is to buy on the 1/3 retracement if close to the opening or on the third time, it reaches a support.

If the gap is extremely big, then it's also time to bet against the market, hoping for it to reach a 1/3 retracement before turning around. However, this strategy works better on the short side than on the long side, as markets fall faster than they rise.

Would be interested to hear more about your kind thoughts.

Take care,
Winston