Did you know?

Despite the events in Greece and Portugal, US and European markets are climbing. The DOW is testing 2008 resistance while the Nasdaq is testing the resistance before the internet bubble. All the above IS bullish.

In intermarket analysis, I tend to take note of all sorts of data as many as possible? Are the following important?

·         Have you been noticing the BDI?

·         Have you been following the GDP data reporting lately? As of date, 13 countries have reported negative QoQ GDP data! Portugal, Italy, Spain, UK, Taiwan, Indonesia just to name a few.

One of the above may be experiencing a technical recession, which is two quarters of negative growth! Amidst the above, equity markets are still climbing. Of course, i am not surprised.

On a separate matter, what should investors do now? For those who had been

·         Watching, should we start buying now?

·         Invested, should we move our exposure a notch or two higher OR should we take profit?

The answer to the above is YOU are the best judge.

My passion in posting blogs is to share my knowledge with you. I lay down what i know. Hence you can make your own decisions. For those who may have followed my posts, i believe you have made money again and again. If you are still in the RED, i suggest that you 'fire' your wealth planner.

If you’re not here nor there, i sincerely advise that you seek the advice from a professional wealth planner who may have the knowledge and experience to provide you constant and regular updates such that you are informed to make the right decision.

Happy Investing!

Regular posting are also made in comments! Did you miss my responses to the audience comments? For e.g. click here and follow the comments.

What does Better (Global PMI + US payroll data) equates to?

(Posted Monday 250am)

The equation,

Better (Global PMI + US paroll data) = RISK ON!

As you probably know, PMI data coming from US, China, UK, etc has been better than expected. Global equity markets extended their weekly climb with the exception for Mexico, Australia, KL and Japan, just to name a few.

Some of you may not have realised that the US market had been stronger than expected. With the latest US data, the Non Farm Payroll and Unemployment data lowering to 8.3%, the Fed Chairman’s monetary policy of holding the Fed fund rates to end of 2014 is a question mark!

This is interesting. Did you know that the Dow Jones IA closed last week at a 3 ½ year high breaching the Q3 2008 high before the Global Financial Crisis (GFC). It broke my resistance level of 12,800! And the S&P Golden cross is evident! Do we need QE3?

VIX and the dollar Index. The US dollar index met resistance at the 81.5 resistance and reversed course following lower global growth worries. Couple with better France, Spain, Italy bond auctions after S&P downgrades France, the volatility index, VIX plunge to levels below 20.

I don’t need any stinking QE3. With the above, the probability of QE3 may be lowered. As Gold is the primary beneficiary for monetary easing or QE3 prospect, spot Gold plunged!

On Friday, the Europe crisis prolongs with high yield Portugal bond auctions and extended Greek talk with the Trioka. As a result the Euro plunged after climbing against the US dollar after the payroll data. On the other hand, commodity currencies like the Aussie rose to the highest level as carry trades is attractive in a low VIX environment.


Updated 6th Feb 0630 am. Greece PM and the Trioka agrees on Deal Framework. Details of framework to commence later Monday Greek time vs China’s Lowest Lunar Sales Since 2009. What I wonder which side would Asian investors mindset be focus on?

 

If you were to realize the above, it is EVIDENT that global equity markets are temporary disconnected with the prolong debt situation in Europe. I think global investors are NUMB (by now) but I speculate there will be one more possible dip before end of month. This would be another possible buy-on-dip.

The after effects of a better than expected US payroll data had not been reflected by Asia. There is a possibility that the US might pass the rally baton to Asia or would Asia markets fade towards the European markets opening because of a prolong Greek-Trioka meeting?

I have a personal interest in Indonesia and am eagerly awaiting their GDP data, due Monday with a better than expected GDP data!

If you’re a global investor, you may probably know that inflation had receded in most countries and most Central Banks has lowered interest rates to support growth rather than battle inflation. Particularly of interest are in Emerging markets as well as BRIC. The yield curve is leaning towards being normal. As such, it is a no-brainer that BRIC economies like Brazil, Russia, India and China resulted in a better performance than developed economies YTD.

WARNING. Do not be too greedy. Expected the unexpected if you are not following closely on the Baltic Dry Index and its possible consequences!

For new audience joining my blog, we welcome you. You may also be interested to know that this is probably the ONLY blog to speculate that markets

·         Would fall three months before the DOW plunge a 2011 low prior Oct 4^th 2011 and

·         Would rise three months before the DOW breached a 3 ½ year’s high of current!

Please feel free to read Market Trends, Investing commencing May June 2011 and Oct Nov 2011 for my speculative posting.

If you find the blog beneficial to your investments or risk management planning, you may ‘like’ me or subscribe to my emails (FOC). If you feel the post may benefit your friends, feel free to forward the articles.

Golden cross in S&P? Should we chase the market?

(Posted Singapore time, Thursday 120 am)

As you probably know, the S&P is forming a Golden Cross lately. This is where the 50 days moving average passes through (up) the 200 days moving average. To most technicians, it would be a bullish signal for the US markets! Or is the S&P forming a doji?

The market is there always. Be patient and wait up till US nonfarm payrolls registers on Friday. In addition, we have to wait how the market interprets the nonfarm payroll data and closes for the week. Whichever, the Golden Cross or the Doji, we have all the time to react after the market closes. Just be patient!

Meanwhile, the noise from Europe has been holding global markets. Greece is for one and Portugal for the other.

Is Europe playing time for an orderly Greece default?

Bond yields for Portugal auction dictates the markets lately. One day shooting above 15% while shorter bond auctions bring the yield down. Whichever, my advise has always been ‘be patient’. Think of the bright side, no matter the volatility, the lows are getting higher! Correct me if I am wrong?

And the Dow, it’s testing the 12,800 level again. As you probably know that I am holding long positions, I’ll hold till it breaks the 12,300 level. Otherwise, the S&P Golden cross and the Dow 12.800 resistance level looks attractive for more DCA!

The Global PMI data which includes Germany, China is posting better growth. This eases the global growth concerns seen one year ago.

In brief, my other speculation is the current mood is RISK ON.

·         Look at the Euro! The Aussie

·         Gold, which has always been a primary beneficiary for the QE

·         The weakening UD dollar index

·         VIX is below 20!

Talking about QE, what would be the effect of high yield assets if there is a combination of QE from Japan? Europe? US? and the UK? You would probably guess the answer from here onwards, right?

Are you all still skeptical? Are you all still bearish? If the opportunity arises, buy and average your position for every dip. Until the unexpected occurs, I think it is a speculative opportunity to average up your portfolio for a potentially higher yield!

The other advice is do NOT be greedy. The market is always there the next day!

Notes: As you probably know, I’ve been posting fewer blogs. The rationale so far has been my speculative posting has been correct so far, while ignoring the noises. Despite the noises, the lows are getting higher and the resistance has either being tested or broken.

Feel free to drop me a line if you have concerns with your current portfolio. My advise will always be based on your investment objective, time horizon and risk profile.

Happy Investing! What a great Year for the start of the Water Dragon!

I like to be proven wrong sometimes...

Year 2011 was a very volatile year. Topping in Q2 2011 and then falling in Q3. Global equity markets reversed in 2011 Oct and kept on climbing. That’s when I started to speculate that we’re out of the bear market.

Though the market was volatile, I mentioned the markets were trending North despite the volatility. Bottoms were made at 10,400 and 11,250. Who would know where the Dow would meet resistance in the future?

The rally stalled in Nov having gained support in late November. Equity markets continued to climb assisted by the Santa rally commencing mid December. Again, the post was reinforced that we’re out of the bear market.

Is it time to go in? Should we chase the market?

In my last post, I hinted that the Dow would meet resistance at the 12,800 level. Did you all notice? On Jan 26^th, the Dow broke through 12,800 to 12,830 thereabouts but closed below the 12,800 level. From there onwards, the Dow had closed lower for the next two days.

The rest is history? Who would have known that the Dow would meet resistance at the 12,800 level?

I like to be proven wrong. So far, the market had proven me right for many a times! The US major indexes has risen 20% so far. A correction would be healthy.

What’s in store for the Dow’s near future?

·         A trading range from 12,300 to 12,800?

·         Market to fall below 12,300?

·         Markets to consolidate and head northwards, break 12,800 for a stretch target at 13,800?

We like to hear your views! What’s your opinion?

My daughter Michele once asked, Daddy, how do you spell a blind pig? Puzzled, bewildered, I gave up. The answer is PG because a blind pig has no eyes (I). That’s the initials for Portugal and Greece. Listen closely to what’s brewing up in Portugal!

For the record, we’ve been ‘long’ since October 2011. The profit is reasonable and decent. So far we’ve been invested in Asia Pacific with additional concentration on South Korea, Australia, Hong Kong and of course, Indonesia with a small percentage in India for the more aggressive risk profiles! Our speculation in the above could not be better.

Gentle reminder on investing. Follow your strategy.

·         Have a good entry level

·         A support and

·         Resistant level.

·         Cut your lost on your portfolio no matter where the market is heading. This avoids an even bigger lost.

·         Ride your profits until resistant levels are tested and to take profit where resistance level looks difficult to be breached!

Happy Investing!

My AUM performance for Year 2011

(Posted 1040am Friday)

In my previous post on global equity performance, the median on the average is (slightly above) a loss of 20% with the best performer Indonesia at -0.7% and the weakest performer Greece at -50.31%.

As for my (Asset Under Management) AUM for Year 2011, the median is -2.32% with the best performer at 3.85% and the weakest performer at -12.35%. 67% of investors had less than 3% of losses.

As everyone probably knows, the higher the risk, the higher the returns and if we want higher returns, we need to take higher risk!

During the 1^st half of 2011, we were able to eke a positive return of 2 to 3%. As I posted the fall of financial markets in Q3, we manage to shelter from the bearish market and cushion the fall to a loss of 5%. Taking DCA positions commencing Q4 minimize the loss and hence -2.32%.

Through a combination of fundamental, technical and understanding global market sentiment, pro-active and reactive management was exercised. We allowed gains to run. Similarly, we cut losses at technical support levels thus avoiding huge losses. In recognition of bear traps, we avoided a majority during the 3^rd quarter.

How do we see the market from here onwards?

You would probably know,

·         the US economy had been having better than average economic data. The stock market still holds good/well above 12,300 with a range to 12,800.

·         The Europe sovereign issue is less of a threat, despite S&P downgrades of several European countries including France and well as the EFSF. Bond auctions have been impressive!

·         China’s GDP elevated Global markets sentiment earlier this week.

·         Global MPM supports growth rather than combating inflation.

·         Manufacturing data has improved.

To expect the unexpected

·         Future credit rating downgrades

·         Orderly/disorderly Greece default

·         Noises coming from China and Europe.

May I take this opportunity to wish all celebrating the Lunar New Year

KONG XI FA CAI

AND May the Year of the Water Dragon bring lots of water, good health and prosperity to one at all

The year ALL stock markets failed to deliver as of Dec 15th 2011.

The year ALL stock markets failed to deliver as of Dec 15^th 2011. Correction made for date to December 15th 2011 on Jan 15th 2012.

The following is an extract from a UK financial website “This is Money”.

The best performer is Indonesia followed by Philippines, Thailand, US and Malaysia, out of which, 4 out of 5 comes from South East Asia! Singapore was -22%. There’s no prize for the worst performer (Greece).

The BRIC countries delivered -26%, -25%, -37% and -22% respectively.

For the record, the financial website missed out Venezuela which returned an astounding 80% for the year 2011!

We like to hear from you. Please share your success with us for Year 2011 performance.

Huh? Chicken Little

When I started blogging that financial markets were heading for a downturn at end of Q2 2011, most of you were thinking, there’s Chicken Little.

Again, when I started posting ‘Are we out of the bear market’ most of you said there’s Chicken Little again. In one of my previous posts, I mentioned that every dip is an opportunity. There’s Chicken Little again.

Other Chicken Little predictions:

Gold plunging from the high of US 1900 to US$ 1535 thereabouts

Indonesia would be one of the best equity Index in 2011.

Inverted Yield curves for China, India, Brazil and Russia?

How was Dow supported at 10400 (Oct 4^th) and 11250 (Nov 25^th)? When Dow broke 12,300 after Dec 29^th 2011, there was no looking back. I would see that this would be a support for Year 2012!

Every speculation was based on fundamentals, technical, investors’ mindset or all of the above!

The rest is history!

And what’s’ in store for 2012, stay tuned! For your information, personal investment planning are open for 2012.