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Web thoughts-denzuko1.blogspot.com

My Charting Blog

It is interesting that I start off this Blog when the Singapore Stock Market is heading south. However, this makes it more interesting for me to write on as the market turned volatile. My interest is Technical Analysis, TA for short. I love to look at charts and predicting where they are heading. This blog is or me to record my thoughts on the market. The articles on this blog are based solely on my personal opinion on the charts that I read and readers should not take it as absolute.

11/30/2009

HSI Surprise!!!!

Singapore was having its public holiday on Friday for Hari Raya Haji. While there are still active markets around the world, we get to have a rest on Friday. I think it is really thankful to Islam that Singapore got that rest.



While I did not follow up on the market last Friday, I briefly read about the Dubai issue on Thursday. I never thought that the effect would be so great around the world. If Singapore was active that day, I am very sure that Singapore would be spilling blood all over.



I did check on DJIA on Sunday when I resume my chart reading routine, my thought was that DJIA only dropped by 140+ (although its full fall was over 200). It did not looks to me that the effect is that serious afterall. Of course, all the charts still gave me a bearish sentiments and I was fully out of the market.



After the weekend, as expected (at least one of my scenario), STI gapped down in the morning. That left with very little space for shortist. Eventually it went down by over 30 points by the end of the day.

I read on CNA forum that people were comparing STI with HSI. HSI went up a max of 700 over points while STI fell. From the looks of it, the performance was spectacular compare to STI, which was a mere 30 points drop.


It was until the time I looked at the chart that gave me the surprise on HSI.It actually dropped more than 1,200 points on Friday! This is one of the greatest one day fall I have ever seen. Not only that it went through the floor board, literally speaking.

It is quite unfortunate that I am not able to up-load the picture (again). I will have to up-load it when it is possible again. So for now I have to depend on my skill of descriptive art. What I am saying is that HSI gapped down below the envelop support for the Wedge, and was half way down!

The 700 points retracement today is nothing compared to what it did last Friday. Aparently something in Dubai affected Hong Kong. I assume that a lot of lending from the banks of Hong Kong?

Interesting enough the retracement today was only stopped by the support envelop of the wedge which now turns resistance. I guess HSI is heading down then.

While the indicators on the daily side is at the bottom, its weekly indicators has just started to fall. So if higher time frame governs the lower ones, the daily indicators are likely to stay at the bottom for a while.

So if I am into Hong Kong market, I should be panickign by now. It is high chance (at least to me) that it is never going to see daylight for a while.

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11/29/2009

DJIA and STI

Well, enough with my crappy fundamental prediction of the market. Let's get back to something that I like more, charts!

In my previous entries tracing back to the beginning of November (2009), I have been seeing warning signs of reversal for both STI and DJIA. I taced back a few entries and noted that I have been writing about the weakness in the indicators since then. However, they refuse to come down and it made me think if I have a wrong read of the charts and I am in fact on the wrong side of the market.

Perhaps my teacher is right, the charts are alive, and they are just waiting for the right moment to synchronize and come down. Just like someone at death beds, they will not go peacefully as long as their final wish is not achieved.

Probably they are all waiting for something big to happen, something like Dubai World?



Fig 1 DJIA Weekly Chart


Fig 2 STI Weekly Chart

On weekly basis, we can see that the indicators of DJIA and STI are at the top and turning. To some extend divergence are visible, giving support of a trend reversal ( or correction, which ever suit).

DJIA retreated from the resistance that I have derived from the downward trendline and the wedge envelop. It is now heading to its support envelop which is at 9,979.

STI is also resisted at 2,799 by its envelop and the Gann Grid line. The support for this chart so far is still 2,751.


Fig 3 DJIA Daily Chart


Fig 4 STI Daily Chart

The Daily charts are more drastic, the indicators are falling! Somehow showing urgency to go South, probably to escape the Winter. The divergence on DJIA cannot be obvious enough, a double divergence with every climb of the chart.

I have previously mentioned about 2,809 on STI. I have somehow forgotten where I got the number from until recently when STI reached 2,803. The numebr seems close enough to ring a bell. I recall that it was derive from Fibonacci calculation of the 5th wave target.

It will be interesting on how the market will perform tomorrow. I won't say that there is no question about it on having a sell down. The chances are high on panic selling, like I said, it may not even benefit the shortists.

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My thought on Dubai World .....

I read a thread from a Forumer on Friday about a Dubai World defaulting its debt. I found it quite interesting. As far as I know, Dubai has been engaged with mega projects dealing with building of islands, the most luxury hotel in the world, ski resort in a desert, etc. It is situated in an oil producing country, money should not be a matter. Anyway, I did not care much about the news, that is until my friend text me a message " How will Dubai affect the market?"

To be frank, I don 't really care about news, because I suck in Fundamental, the only thing I am interested in is chart. Nevertheless, it led me thinking who would be those affected and targets for shorts.

Dubai has nothing except Oil, it uses the revenue from Oil to build mega structures to entice the rich to invest. Most of these mega structures are for luxury and cannot be afforded by common man. Imagine that they build islands just to build houses where you can park luxury boats in your back yard. The city also uses fossil fuel to desarinize water from the sea, a process which I believe is very unproductive. The richest person in the city actually has a car with body made of gold, not painted, but made. They even have a ski resort in the middle of the desert. To me what ever they did, it is pure waste of resources. Most probably money came so easily that they don't even bother to think about saving for a rainy day.

With such a default from Dubai World, 2 main groups of industries are affected, banks and contructions. But banks will come first. I believe the loans with American and European banks. The issue with banks is that they are all linked. If one fall, all others will join in like a domino.

With such defaults, the contructions will also come to a halt to cut cost. So those companies will also be taken into consideration for shorts. With the goes the suppliers for the machineries and employments.

Outside Emirates, those countries that depend on Middle Eastern tour will also be affected, however, this will be a longer term effect and might even be smaller. But certainly Singapore's neighbour Malaysia will not be spared. As far as I know, other than attracting tourist from the Emirates, they are also supplying Engineers to help the growth of Dubai. My cousine was once working in Dubai on Management Information Systems (MIS).

Probably those less affected or having the effect come later would be consumers, hotels, manufacturings. I doubt that they have a lot of export to Dubai unless it is a luxurious item (may be Rolex). Anyway, they are likely to be secondary parties in the event.

So which market would be affected tomorrow with the sell down (if it happens)? My guess are the banks. Probably the good news that might prevent this is that the Central Bank of the Emirates has already came out to provide support to the affected banks.

But no matter what, it is not good for Shortist in either way, if it goes down, it will gap and thus it will be too late for entry, if the issue is resolved to some extend, the market might even go up, which puts the shortist on the wrong side of the market.

11/25/2009

DJIA, HSI, Nikkei225 and Wing Tai

So finally after 2-3 days attempts, I have managed to up-load my charts on the blog again. I have made it a point to up-load 4 charts at the same time, one of Wing Tai, Nikkei225, HSI and DJIA. One may ask why Wing Tai amount the indices? Well, there is not much relationship really. It is just that I want to ensure the chart is loaded as a record for tracing since my last entry was without a chart and it may be a little difficult to visualize even with my "colorful" description.


Fig 1 Wing Tai Daily Chart

By looking at its daily chart, I waould really consider quite stupid to enter the counter thinking it was a breakout. The triangle was formed AFTER it retreated from the top, this is high chance a "B" waveafter the completion of "A". The logic should be a continuation of "C". Therefore I should be expecting around 1.42 target instead.


Fig 2 Nikkei 225 Weekly Chart

I took a mild interest in this index because among the indices I looked at, I have a feeling that this index is actually tending to go up!. Both RSI and Sochastic are already reversing and the support seems quite good.


Fig 3 HSI Daily Chart

Its funny that people cheer when HSI went up today, or any other day. The thing is that it is one of the up day of the down days. It is still trapped within the wedge formation and half way down to its envelop support. I am still betting that it will break its support and head south.


Fig 4 DJIA weekly Chart

On weekly basis, we can see that DJIA is meeting resistance from both the envelop of the wedge and the downward trendline. I am still measuring around 10,500 as the crucial point for it to break. On daily basis, the same trendline is situated differently and apparently DJIA has broken through. However, it could still be a false break. Both RSI and Stochastic on weekly basis is tapering off at the top. There is a high chance of it going down.

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11/24/2009

Wing Tai Triangle

I was reading the charts the other day when I noted Wing Tai was at 1.67 with Symmetrical Triangle formation. Well, it was not exactly a triangle because it only has 4 points of contact. Nevertheless, I was thinking that it would still be possible for Wing Tai to establish its direction if it breaks the envelop and the target is 1.89.

The next day, it broke its envelop at 1.70 and moved towards 1.72. I saw that this would be an opportunity and placed an order at 1.70 with stop loss of 1.66. It was quite unfortunate that my orders were filled almost immediately, signalling a retreat from the peak of 1.72. It went back to inside the triangle formation.

Since then, I have to redraw my envelop to include the break-out and Wing Tai has since retreated encouraged by its descending RSI and Stochastic. It gapped down on open today to a level of 1.64 forcing me to activate stop loss immediately. It did momentarily retracted back to 1.67 before coming back down again. I would assume this counter to head south for now, envelop support at 1.59 with 89 days moving average at 1.62.

If this counter breaks the lower envelop, the triangle objective would be 1.409 for now. Obviously by now, reader will notice that there is no picture, this is because my up-loading fail again. So I guess I will have to up-load the chart later, just for the record.

Meanwhile, DJIA is heading to 0,500 level as I mentioned earlier. The resistance is some where between 10,514 to 10,529.

11/19/2009

Cosco...

I was having my afternoon tea at a small resatuarant today. The restaurant is called Hippo at Circuit Road doing stir fried dishes for lunch and dinner. I got to know the business owner since I frequent the place quite often because the food is relatively cheap and very tasty.

The last time I visited we discussed on a counter Cosco, that was more than a month ago when Cosco was at 1.17 level. The owner entered the counter after it fell from 1.24. I have exited the stock a some time after it failed the resistance of 1.34. The counter has also touched 1.11 twice.


Fig 1 Cosco Daily Chart

The set up result in the creation of 2 triangle, one symmetrical triangle which Cosco has broken. Cosco has also touched 1.11 twice, which makes a descending triangle formation. The target for the symmetrical triangle is 0.932 while descending triangle 0.719.

Cosco has recently broken 1.11 only temperarily, it may indicate a break down of the triangle. However, the indicators are toppish and descending. I am likely to believe Cosco will again drop below 1.11 and head for its target.

Indication of the break down of this counter is the upper envelop of the triangle, estimate at about 1.21.

The owner is still hessitated if he should let go of the counter, I urged him to be careful when I left the shop.

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11/18/2009

DJIA, HSI and STI Trend

To be honest, I did not know how to start this blog, life has been a bit of a dull lately with urgency to plan for next year's business direction. So I have been facing Powerpoint the whole day for the past week.

At the same time, it seems that many on CNA forum have been complaining about how dull the market is right now. They are quite right. On my last entry about STI noting an up-hill task to climb further. Well, just Monday alone STI climbed 52 point breaking the resistance of 2,751. This mean a likelihood target of 2,809 which I have predicted earlier. However, the thrust quickly lost its steam and retreated back to below the 2,751 resistance today. In addition, RSI and Stochastic seems reversing with Stochastic having a divergence.


Fig 3 STI Daily Chart

While this is so, I redrew the envelop of the chart and noted that STI is still trapped within its congestion (yellow lines). Seems like my last trend was set wrongly. So just like my teacher said, " Let the chart open slowly to you like a flower". If the envelop holds, STI is likely to retreat to the lower end of the envelop, a rough prediction would be a value of 2,646, please note that this is an estimate.

While I went through other indices, namely Dow Jones and Hang Seng Index. Both charts are in similar position as STI. The only difference is that, both charts are producing a pattern of up-ward wedge and presently touching the upper envelops. So chances are both indices are pressured to come down.


Fig 2 DJIA Daily Chart

A look at Cow Jones chart seems to tell me that it still has a long way to go to complete its formation. There are roughly 4 points of contact on the wedge envelop. We might still be seeing an so call (actually I dislike this phrase because many people misused it) uptrend which in really it is just preparing its descend.


Fig 3 HSI Daily Chart

HSI on the other hand has a smaller wedge, plus it has already touched both envelops more than 5 times. I assume this is what they call the 5th wave wedge. I am thinking that the trend reversal of HSI might come sooner than the Dow.

While market continue to look "bullish at the moment, I continue to sense a huge possibility of a second dip next year. I wish my sense is wrong and if it is right, let it happen after Febuary so that at least I get a better bonus.

11/12/2009

STI follow up

I do not really know what happen to www.blogger.com tonight. I simply can't load a single picture on my blog.

Anyway, STI is quite interesting at the moment. It has been rising this week, as high as 35 points at one day. But is it continuing its trend?

Okay, let's test out how good my English is now. STI is now meeting the resistance of 2,751,86. Moreover, there is an additional resistance of the wedge envelop at the same point. Seems like STI is having an up-hill task to break through the resistance.

As far as indicators is concern, both Stochastic and RSI are showing divergence on every highs. The showing of Stochasitc is more prominant than RSI. Thus far, I am still concluding that STI should be on reversal, that is unless it breaks through the resistance.

11/11/2009

DJIA review

I recall that I have an entry earlier when DJIA broke 10,000 points. My comment was that we were still not out of the woods although DJIA was climbing, DJIA can reach 10,500 before it drops. However, I did sound a bit arrogant during the process.

As I go through the chart today, it is still climbing up reaching a level of 10,246 last night. My comment remain the same. DJIA is still inside the envelop of the wedge. There is a trend resistance at 10,523. So I gather that it is likely make its way there before any changes in trend.

Review of USD vs AUD against SGD

I went on a business trip to Vietnam last week, destination, Ho Chi Minh and then Hanoi. The trip was not really pleasant to me, none of my trips was. Contrary to many people's admiration of a job with requirement to travel, business trip is not really enjoyable. Even now, I still wonder why so many long for a job that requires to travel abroad. You are not going there for sight seeing, you are going there to work.

One might think that going to places like Melbourne or Sydney equates to a treat by the company. Yet, how many can imagine going to the poorer districts, industrial zones while staying in 2-3 stars hotel where you think would be more beneficial to the company's coffers?

I remember on one of my trip, I was given a treat by my "subsidiary" in Melbourne and Sydney. You might think " this is great!" But imagine that you are having Thai food in Sydney and "Chinese" cooking in Melbourne, then thinki how exotic you might get.

I have also been involved in exhibition overseas, I was one of the exhibitor. So this must be great exposure, one might say. But I ask you this, have you ever stand there without the opportunity to sit for a whole day, 3 -4 days in a roll? Do you know how much pain that will create on your smaller thighs?

Anyway, enough said about oversea trip (for the moment). Before I left for Vietnam, I have made an entry on USD and AUD versus SGD. I was bullish about USD and bearish on AUD. AUD has done an evening star while USD engulf.The indicators of AUD with toppish while USD at the bottom.

I am mildly surprise that the AUD remain resilliant while USD continued to show sign of weakness. So where did my prediction go wrong?

The first thing that I need to accept is that we are playing with probability and there is no 100% certainty. IF I have 100% certainty, I won't be worrying about risk, neither do I need stop losses.

Secondly, it might be my unconcious urge for USD to go up while AUD to come down. I learned this from NLP, my mind delete any signs of alternate readings. Just like the time my friends and I played AFP, we were so bullish about the counter that we ignored signs of the counter losing steam.

While there are subtle signs that AUD is toppish while USD is bottoming out, there is however no sign that these 2 are reversing, not yet, they are just early signs. In fact, there is a risk still that USD is going to weaken further, there is a double top measured to a level of 1USD to 1.2889 SGD. The relief part is that there is a tendency for divergence on the indicators, but learning the lesson from last week, let's not make the decision yet. Unfortunately the charts is not downloadable today.

11/01/2009

AUD, NZD, USD, SGD and STI

I recall writing an entry a while ago on the few currency and I noted that USD seemed to be worth buying comparing to other currencies (if you are holding SGD of course). Since then AUD and NZD have been reaching new highs against SGD while USD went lower. So it was natural to doubt myself if I have read wrongly. For quite a while, I have been saying to myself that the indicators are toppish and it is about time that NZD and AUD supposed to descend while it has been a very long while that USD has been on the down trend.

Well, I think ( really, I think) that a reversal is here now, the settings are quite there already.


Fig 1 AUD versus SGD

Fig 1 shows AUD versus SGD. It has just confirmed an evening star, an indication of bear move, and it is not the only one.


Fig 2 NZD versus SGD

NZD is doing even worse than AUD, it has dropped with an even higher percentage. Similar to AUD, it has created an evening cross. Probably because they are like brothers.

In both the RSI poses a very steep slope, indicating probably a bearish tendency for the next few weeks at least. While Stochastic looks milder than RSI, nevertheless, it is pointing south.

So what about USD?

Ever since last week, I have been hearing forumers claiming the strengthening of USD is the main cause of market fall. So how great was the move.


Fig 3 USD Versus SGD

If you just look at USD at a glance, there was not really much movement yet. I have no idea why people have been yelling that USD is rocketing. Well, it did go up but not as spectacular. It has created a Harami with a confirmation, plus its indicators are pointing north. So I guess we should be seeing theascenssion of USD from dust...at least for the next few weeks.

While typing this entry, I can't help but to remember what I have written on Thursday, I predicted that STI should be going down on Friday. Well, it did not. Rather, it went up with a spectacular move....for the morning at least. It gapped up ad then continued to climb to new heights. Unfortunately, it started its descdence after lunch and continued to fall. "Deja Vu?" was what exactly in my mind on Friday.


Fig 4 STI Daily chart

A look at STI shows that the Friday's bar is definitely much different from Thursday's. It is a tumbstone and sign is not good.

So I might be wrong but I am not far off. I guess by Monday morning there will be another round of panic sellings for STI. I got a feeling that this will be the trend still for the next few days. At least I don't have to worry about the market when I am on business trip to Vietnam for the week.