Global investors go bungee jumping. Updated 7pm includes US data prediction

(Posted Friday, Singapore time 330am)

When hopes and speculation for a favorable FOMC meeting brought global indices to one of their best week a week ago, the FOMC announcement reversed its course.

'Operation Twist' which was widely expected lowers longer borrowing cost. It doesn’t expand the balance sheet at all. There is no stimulus to push up the economy. Hence, market was disappointed and the bears took the stage. The problem here is that most investors follow (blindly) the herd without knowing the effects of such an announcement (operation twist). Classic bull trap.

Again, hopes and speculation for a Germany-Merkel vote which gives new powers to the EZ rescue fund was short lived. Not knowingly to most of you, the implementation would produce undesirable side effects, too!

Coupled with a better US GDP final revision for Q2 which came in better than expected, the US markets pared most gains with Nasdaq leading with more than 2% loss! Something is brewing up very bad!

Please do take note of my previous post on a China hard lending. The Chinese index broke a new low yesterday. Updated 1015. There would be a bunch of Chinese data due out, namely the China PMI and HSBC PMI. Hope the Baltic indicators come early! 

(Updated Malaysian time 7 pm). The US data; Personal Spending, Chicago PMI and Michigan consumer confidence will be out in 1 1/2 hours, that is 830pm. My speculation is that the data will be lower than expected. As non farm payrolls was reported flat this month, Personal spending has a tendency to follow the same trend. Unless, there's a surprise, the US major indices may record a new low tonight. Be cautious, be very cautious!

Keep watch on Greece. Should Greece prolong its virtual default, the market should have a brief rally. Otherwise, global markets may try another bungee jump.

Hence, in my opinion, I wouldn’t buy or hold any equities now. If you’re into bonds, please make sure it is not related to Greece, Europe or financial institutions holding/related to Europe debts.

Some of you may preserve your investments  by staying out of commodities or commodity currencies and heading for safe haven of US dollars or the Treasury. My generals and I have identified premium trades seeking higher yields instead of seeking safe haven. This is thinking out of the box!

Though volatile, the short term trend is very predictable. Be very cautious!

Bears wake up from 2 days nap.

(Posted Thursday, Singapore time 0445 am)

As you already know, global equities were slaughtered by the bears last week. While the bears were in hibernation, the bulls fell for the bear trap!

Realistically, with

·         global growth concerns,

·         EU debt crisis,

·         Bernanke’s worry on the US economy

The bull trap was clearly prominent. My earlier post, What is the reality reminded you.

If you had not heard, there was an article from Bank of America on ‘China Hard Landing’ that brought US major indices to their knees this morning.

Dow, Nasdaq and S&P fell 179.79 (-1.61%) 55.25 (-2.17%) and 24.32 (-2.07%) respectively.

For the reasons above, investors poured into the US dollar, That is risk off! The USDX touched a high of 78.66 from a low of 77.84. As a result, Gold fell to a low of US$ 1,598.80, crude 80.55 Audusd 0.9778. The CBOX VIX increased almost 7% to 39.4. All the above indicators are telling us that this is risk off.

If my reading is correct, Asia Pacific would open lower. However, depending on the outcome of Merkel’s key EFSF vote, the course may change. US GDP, due later in the day might spring some surprises!

Frankly, I don’t suggest bargain hunting nor dollar cost averaging until the whole sky is clear.

As I spend most of my time monitoring and gathering information, timely information and effective execution should not be compromised. I hope my posts would provide you with timely information for your short, medium or long term investments. Gentle reminder. Add me to facebook or twitter for immediate delivery of my post.

Gold finds support at US$ 1,535

(Posted Singapore time 715pm)

While most experts have said that Gold would breach US$ 2,000 and some had advice to buy Gold below US$ 1,700 I beg to differ. Why?

Gold has physical value in the sense that the metal’s characteristic is unique. However, when trading Gold, you may not have the experience to decipher when its (monetary) characteristic will change and at what turning point! I have the experience and the luck!

In my earlier post, I speculated that if Gold breached US$ 1,825 (a very strong resistance at that time, probably by FOMC announcement but it did not); it would test the strong support at US$ 1,530-1,535. I cannot be that exact, but no sooner than today was my post proven correct this morning. But I did also mention that Gold will find an earlier support around US$ 1,640.

It is evident that most of you had tried to verify my speculation turn prediction, in my earlier post, Did you make money from my post? Must read! (I know the audience did by going through the blog statistics) and most of you can vouch that I did mention the two supports at US 1,640 and US$ 1,535. No sooner than this morning, Gold tested the support at US$ 1,535 and rebounded back to US$ 1,600 and above.

Was the forecast provided (so) exact by any Gold Elf, Gold experts, CNBC, Bloomberg, Reuters, etc)? Just let’s say I had the opportunity to spot, speculate, blog and deliver. The most important is that I didn’t talk verbally but I did predict in black and white. Maybe, I am lucky and the audience would say, let’s see how this guy can go further? Should I recap and discuss how I predicted the financial meltdown since May 2011?

Thank you for the bouquets from some of you that you did make a hefty profit. I wonder how much you made from shorting spot Gold at US$ 1,825 down to US$ 1,535. Can I add in a matter of 4-5 working days! And from the rest of the audience, I would appreciate if you all could be a little bit generous with your ‘like me’ clicks. It would certainly boost my generosity by giving more tips. Warning. For most of you; do not trade Gold unless you have discussed your risk profile with your wealth consutant!

By the way, some of you requested how I came across the support and resistance level. My apologies, these are my trade secrets which I believe that it’s either you trust me or my experience. By the way, I am looking for disciples. Contact me if you would consider changing professions. I’ll be glad to interview/discuss your ability. Many had been turned down because they were quick to learn the short cuts but not too eager to understand the basic fundamentals.


On a separate matter, Greek bond swap take-up rate nears 85%. Target is 90% participation. Hence, the hopes had brought a rally for Europeans markets. Again, these are based on hopes. Wait till the take-up rate is accomplished above 90% before jumping in!

Audience, be generous and give me the thumbs up for ‘two’ speculations by adding me on facebook and twitter such that I could reach an even larger audience in Singapore or globally!

And if you like to discuss on a client-planner relationship or your wealth management plans, please feel free to contact me for a NO obligation free discussion.

Asia Pacific benchmark indices nose dived!

(Posted Singapore time 5pm)

You might probably know that most Asia Pacific indices nose dived and broke new lows for the year. Some are new lows for 24 months!

With the exception of New Zealand (strongest in Asia Pacific) and India, benchmark indices were not spared. My fears of what I speculated – that is the unyielding of high yield assets into safe haven like JPY, US and Treasuries is taking place. Did you assist your friends and colleagues to forward my earlier posts to prevent them from losing $$$?

Some economist predicted that this fall could even be more dramatic and ‘fierce’ as compared to the 2008 Lehman crisis. With no good news or cavalry, the worst is yet to come.

I sincerely hope that Europe can get its act together or Central banks, G20 can move swift enough to prevent further capitulation. As mentioned earlier, the Europe liquidity issue, joint forces by Central banks earlier this month could be the pre cursor behind this move. While some cheer on this move, I warned that this could be a bull trap!

As for Europe indices, things have recovered and marginally up 1%. I hope this get better before US opens!

Further updates coming when appropriate.

Sea of red. What's next? Updated

(Posted Singapore time 340 pm) 

Updates are in red. This post was written in June. This post is a reflection on my earlier speculation and subsequently updated. How accurate had this blog posted and speculated, please be the judge! 

At point of writing, 20110616, Singapore time 0230 thereabouts, the US dollar index is at 75.64, a rise of 1.76%. The US major indices are down 1.54% – 1.7%. Hence oil is lower by 4% (demand concern). And unless there are any strings of ‘good’ news, the markets will continue to fall. The US dollar reached a high of 79.4

With no news of QE3, and QE2 coming to an end, the markets had certainly showed no mercy. Since my article dated 11 May 2011, Without new on QE2.5…unwinding of carry trades I had tried to explain what unwinding of carry trades mean? In layman terms, investments in high yield assets like stocks, commodities will move to safe haven assets like the Treasuries, JPY, CHF or the USD, etc. The exception is that the CHF is not a safe haven asset.

Is Gold a safe haven asset? For most of the time, Yes.  However, when the US dollar reaches a certain point, Gold will lose its safe haven characteristics. Gold reacted and tumbled almost US$ 300 when the USDX reached 79.4. Gold had tumbled earlier today to US 1,532 and rebounded quickly!. My speculation of US$ 1,530 therabouts is delivered. Anyone read my post and took this advise???? Monitor closely on geopolitical and QE3 new, if any for reversals.

To what degree the high yield assets will fall, I began by relating the beginning of the Global Financial Crisis…. What’s next? Part 1 Since QE1 and QE2 were launched; high yield assets had mostly been the primary beneficiaries.

This was what the original post meant!.As QE2 closed in June, major indices are either making a correction or already in bear market territory that is, a loss of 10, or more than 20% respectively. The closure of QE2 had taken back most, if not all what QE1 and QE2 had put into high yield assets.

Should QE3 surface, the market would go further north. But will there be QE3? is there a need for QE3? QE3 had not surfaced yet. I believe this would not happen as discussed in QE3 – it depends. (Three days later, Roubini’s interview with CNBC highlights a QE3 probability by year end. I still can’t confirm this. When I know if QE3 is coming he would also know!) While speculators have ‘more’ hope and expectation, the ‘more’ cruel the market reacts (when the hope and expectation does not realize).

The few ‘daily’ occasions when the market rose were opportunities for you to cut loss and not buy or average your longs. This was discussed in Sell I May and go away.

If you had been following my blog closely on market trends, I hope you had moved to low yield assets. I also hope you did not try to average your buys as I mentioned my generals are sidelined!

What would happen next? My previous post, Where global economy is heading 4-6 weeks from now? was posted in Sep 4^th 2011, My speculation mentioned 5-6 week which means, economic data would probably be favorable between mid to end October. It is still a long way before the Baltic Dry index predicts the global recovery. Be patient, be prudent.

While most people may not believe in BB that the second half of 2011 would be better but I agree with him. The US economy will be better. But it would not be better for certain economies or countries that had been raising interest rates (several times) to curb inflation.

With inflation popping around like bunnies in emerging markets and in Asia, (Asian) Central Banks had been raising interest rates. Particularly in Brazil, India and China, there will come a time when the yield curves are either flat or inverted. (Recessions are preceded by inverted Yield curves. Inflation is NOT present in the US yet. This was discussed in Global Financial Crisis…Part 2). This is evident as the three countries indices are now in bear market territory

Fundamentals, Technical (support levels), Earning ratios are important tools, but the sum of all coupled with investors mindset is equally important. As I mentioned in my earlier blogs, the GFC spared NO support levels, earning ratios, etc. Herd’s mentality or mindset can be cruel as well as prosperous! My basis of speculating market trends is the speculators mindset, knowing and understanding what makes the market go up or down, vice versa. For Insights to Financial Markets, read S&P downgrade Greece and my latest weekly summary. For investing principles, read Sun Tzu's Art of War.

I enjoy writing blogs and I hope you find it useful. Add me in facebook or twitter for immediate delivery of future postings. I think I had speculated well on how financial markets behaved. I hope to see you more often in my blog. If you find my articles helpful, I sincerely hope you could twitter or share this on your facebook, etc. This chain reaction will help an even larger audience! Please feel free to share any ideas you might have. Have a great time investing!

Did you make money from my post? Must read!

(Posted Singapore time 310 am)

Congratulations, if you had and acted on it. There is no point reading and taking no further action. If you had been following, I had evidently been warning the audience with constant reminders of a market meltdown. While opportunity rose, tips are provided. You have to follow every post otherwise you may miss out on tips!

Is this blog beneficial? Briefly, you would have

·         Avoided the market meltdown since August 2011 – click here. Preserving your capital for a financial war.

·         Made small money when Indonesia was celebrating a golden week – click here. Some pocket money.

·         Made big money in Gold if you had shorted - click here. This is BIG! Updated Sep 26th, 430pm Singapore time. My speculation that Gold will fall to US$ 1,535 therabouts had been delivered. Since, it had rebounded to US 1,620. Were you patient for the US 1,530 support???

·         Avoided another meltdown this week – click here. Preserving your capital and profits.

Did you come across all of the above other than from my post? I do charge professional fees for advice. Who doesn’t? But sometimes, as evident in my post, I would give some tips (once in a blue moon) to increase my readership or display my ability in interpretation of financial market analysis.

I believe that most of the audience is investment savvy. The formula to a list of successful trade is not just being knowledgeable. Trust me if you agree. You will also need to be

·         Constantly, monitoring of most financial events – such that you can have a wide diversification of investment tools not limited to counter stocks, but including unit trusts, forex, commodities, ETFs,  etc

·         Knowledge and clear interpretation of fundamentals/technical/mindset

·         Timely information (comes with constant monitoring)

·         Fast and effective execution of trades (fast and decisive)

·         Public holidays, etc

How is my blog different from the others? While some blogs 'parrot', I display my opinions and speculation as a result of financial news, technicals and investors' mindset. Hence, i was able to predict the recent global growth concerns and subsequent meltdowns!

Should you decide that the above holds a better equation into your investing formula, please do not hesitate to contact me for a NO obligation free discussion. Once you are comfortable, we should be working out a nice client -planner relationship.

By the way, add me in twitter, facebook or Google. As there are some platforms that take 6-9 hours to moderate a post, or any post for that matter, the post is considered ‘flat’ news. To ensure immediate readership of post, don’t forget to add me!  In addition, if you like the posts so far, please help to increase my audience by forwarding to anyone who may be interest to make their money GROW!

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Global train wreck unleashes more bears

(Posted Singapore time 430 am)

Global markets fell Thursday from Asia to US closing.

The volatility index, CBOE VIX surged from early 30s to mid 40s. If you are using VIX as a tool to trade, be very cautious when it reaches 50. The weather has changed for the worst. I would suggest not holding positions over this weekend.

China manufacturing data came in weak. Coupled with a decline in Europe’s private sector activity, the preliminary EZ composite PMI dropped to 49.2 pointing to its first decline in two years. These two data just seal another nail to the coffin.

Before US closing, Wall Street fell 4%, was down more than 500 points at one stage, broke the 10,600 level before bouncing back up (10750).

The primary beneficiaries this week are Treasuries and the US dollar reaching a high of 79.4 before reversing course to 79 figure.

Gold dropped more than US 60 before settling around US$ 1,735. Gold, which has the characteristics of a safe haven, was not spared. Speculators changed course when the US dollar was charging towards the figure 80. I do not fore see that Gold speculators will push Gold towards US$ 2,000 unless QE3 is annouced. Silver was not spared dropping almost 10% before closing around 35.80.

With weak global concerns, crude oil drop more than 6%, broke US 80 before finding a base around 80.30. A cheer to pump pricing!

Commodities currencies like the Aussie dollar which normally moves in tandem with global equities sank almost 3% and hit a low of .9692 before bouncing back to 0.9760s.

In my opinion, this could be a beginning of worst to come. 

However, I have a strange feeling that the calvary lead by Bernanke would make a surprising announcement very shortly!