TOL as of February 21, 2010:-As Clear as MudHave you ever had those days where you you dont really know where things are heading ? Have you ever had those days where you thought that you had everything nailed solid and then out of the blue, an event a few thousand miles away, just blow everything apart? In times like that, there's no choice but to stay on the sidelines ...
The week in review:-1)
Oil - US$79.81 from US$74.13 last week. Stronger than expected especially in view of the stronger USD. The cold weather will be over soon. US$68 may be the entry point.
2)
Gold - US$ 1121 from US$1090 last week. IMF Sale and low Chinese demand may weigh on things. I'm waiting for US$1020.
3)
Other Commodities - correcting as well. Still waiting for the 50% retracement.
4)
Shanghai Equities - Closed for a week at 3018. Strong Support @ 2750. As the US markets has rebounded strongly, I'm not expecting a strong correction on Monday. The 0.5% RRR increase last Friday, is probably a non-event now. I may trade the A50 on Monday depending on the momentum
5)
HK Equities - 19894 from 20269 last week. Weaker than expected but on very low volume. Strong Support at 19500 and thereafter, 19000 . Maintained positions in AMVIG, Fosun, GCL-Poly and Asia Cassava. I may buy a Call on the HSI depending on the situation.
6)
HK IPO - Stopped applying for the HK IPOs. The newcomer Ruinian was also weak.
7)
Spore Equities - 2757 from 2759 last week. Support at 2625.
8)
US Equities - 1109 from 1076 last week. A lot of fire-power on the sidelines. Support at 1035 and then 995. May cut half of my S&P Inverse ETF position on the next correction.
9)
Japan Equities - 10124 from 10092 last week. Support @ 9850, 9075. Inflows into Japan for the 8th week. May be a good bet since Japan has not moved much since March 09.
10)
Emerging Markets - Small inflows.
11)
Properties ( HK, China & Singapore ) - The government is trying to cool property prices. How many people will be hurt ?
12)
Iran - When will sanctions starts ? Munich Re has stopped accepting business in Iran
13)
US & Japanese Interest Rates - Probability of a sudden spike has increased
14)
USD - 80.72 from 80.41 last week. Getting close to the 50% retracement of 82
15)
Trade War - The Dalai Lama meeting is probably a non-event now.
Intuitively, I think that valuations have outpaced earnings. Therefore, a correction is in order. However, there seems to be a lot of fire-power on the sidelines and they are buying on dips. Was it vested interests supporting the market ? Was it short covering ? Or was it real genuine buying ?
As things are as clear as mud, I'm only tip-toeing back into the market. The stocks that I'm buying now must have the following characteristics:-
1) A great story for the next person to be buying it off me
2) Trading at a fair valuation
3) A strong catalyst
4) Strong enough to withstand a double-dip
Stock-picking is essential now as it could be a trend-less market for quite a while longer.
The above is to help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk. Please do also feel free to provide me with your kind thoughts and comments.
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"