Russia, Ukraine and oil, 寜為玉碎，不为瓦全

 Just last week, I talked about my discussion with my friend, and that I have no interest in the Russia-Ukraine development. I saw that there was no justification of Russia to attack Ukraine and that the cons out-weigh the pros in this war. He will however cause disruption through proxy.

I was wrong, Putin went ahead with the invasion, what amazes me is the fact that he justified his invasion through declaring his recognition of the independence of 2 pro-Russia cities in Ukraine, these 2 cities started their bombardment to Ukraine held territories. Putin then started sending in troops claiming for peace keeping purpose. 

The military force of Ukraine can in no way compare with the might of Russia.  The president of Ukraine Volodymyr Zelenskyy called for all Ukraine citizen to stand up and defend their country. 

Putin went on air mocking the president of Ukraine, called for the army to rebel against their president and surrender to Russia

I saw traffic jams leaving cities of Ukraine towards Poland border. 

I also watched a Taiwanese program where they interviewed a young Ukrainian woman blaming the president for what is happening in Ukraine, claiming that he was without support and mocked him for asking people to defend their own country. There were also rumour that the president left the capital while support his call.

While I admire Putin for his daring attempt, I nevertheless sadden by his action. There is really no justification, this invasion is unnecessary. The only reason I can think of is his personal ambition. 

His appearance happens at the collapse of the USSR and Ukraine was one of the many countries claiming independence from the Soviet Union. Was his purpose the same as that of Adolf Hitler, or the Chinese "president" Xi Jing Ping, to regain their honor?

To start with, Ukraine was a sovereign country before the occupation of Soviet Union, its independence was granted by the then president of Russian Federation Boris Yeltsin. Unless its people voted overwhelmingly to rejoin Russia, it is not for Russia to take.

To the people of Ukraine, I would I want to say to you?

I recall my father bought a video cassette ( yes, it was that long )  on World War 2. In one scene, it showed the defeat of France and German troops mached through Arc De Triomphe, they were proud while admired the scenic view of Paris. Lined up on both sides were citizens of Paris welcoming their arrivals, these people were in tears, their capital has fallen, their country no more, and they are no more than a sub-class subject of another country.

To that woman who mock her president for calling his people to fight: 

Your country is not an aggressor, your country is being invaded by an aggressor, and you are doing Russia a favor by claiming the stupidity of taking up arms against the aggressor. You are a traitor to your own country. Have you ever wander what happen to traitors? They will be killed by the country that they service once they outlive their usefulness, otherwise they will be outcast by their own people.

To those who run for safety:  

Do you seriously think that everything will be all right when you return after the war? You no longer have a home to return to, you are a sub-class citizen of another country. Don't you even think of settling in another country, you are a liability and will never be accepted as one of them. Your destination is refugee camps. 

To President Volodymyr Zelenskyy and those who fight back:

I salute you and your courage, because there is no family without a country.

To Russia:

You are the people Putin refers to, you have no rights and no freedom of speech, you are ruled under a dictatorship. You should be the one who take up arms and rebel against your leader.

Fig 1. Light Crude Oil weekly chart

The Platform I used for my trading do not have a long data chart of light crude oil, I have to use the chart from Yahoo.com. Based on this chart, it is very interesting that Light Cruder Oil is showing reversal right now. It is going down.  Next few weeks will be interesting, I kind of wander if the petrol price will follow.

China , war and the market

It was during the Chinese New Year when I re-connected with one of my old friends, we have not spoken for a long time and before you know it, it was a more than 2 hours conversation over the phone. 

While I was happy with connecting with people again, I nevertheless felt uncomfortable with the topic of the conversation.

Before I knew it, we went into discussion on China, he quickly identified himself as a China supporter, from then on it was about whether the China is coming to an end. To him, the position of Xi JinPing is stable and the opposition is weak. 

Contrary to my claim of a weakening economy in China, the company he is working for has trouble getting workers to fill the production line, even with the salary of RMB3,000 per month.

Additionally, while Japan has 60% of its export to US during the 80s, China only comprises of 30% of its export to US. Therefore, China is less dependent on US for the wellbeing of its economy.

We then jumped to the potential invasion of Russia to Ukraine. I told him that I was not interested in that but he never-the-less sent me news of the subject with proofs by US of Russia military in Prusia. He talked about how close Russia was to Ukraine border. 

I simply told him that I have more interest to better roast a chicken, cook a pork dish than the Russia-Ukraine conflict. 

To be honest, these are topics that I do not like to discuss with friends, you go into a never-ending spiral of argument with no gain whether you win or not, it may even cost a friendship.

My view on China have not changed, it is not getting better soon. At least for the next year, Hong Kong is not going to do well, considering Hang Seng's deterioration since beginning 2021 and we are not even seeing its bottom yet. 

As for Russia and Ukraine, I am sure Russia will not initiate attack directly (a little too late to say it now). Was is about benefits, Russia will enter a war if the benefit out-weigh the cost, and at this moment, the cost of war is high considering there is little or no benefit. 

As for the military presence in Prusia, Russia did mention its military exercise with Prusia, definitely they are not asking the troops to charge up the hill, it will involve military vehicles, therefore you need to have the right facilities like a military base to park all those vehicles.  

One thing I learned in my fifty years of life is that fact is fact, and the meaning is the meaning you give. The warning of war came from the west led by US, they put meaning of war into every Russia's action. Even when Russia claimed that the military exercise was over and they were sending their equipment back, the west still claimed their worries about Russia potential invasion. All these without actual evidence demonstrating without a doubt of Russia invasion. Everything is all hearsay claiming to be the truth. 

Is that the way their legal system work in their own countries?

As for the market, many expect that the market will plunge if war breaks out, while rise if war is adverted. In actual fact, the opposite happens. Should Russia invade Ukraine, the market will shoot up. What we see now is war not happening and the market actually continue its down trend.

It is true that the threat of war leads to uncertainty and therefore causes the market to plunge. However, war is an economic event, and war causes shortage, price rises as a result. It is evidence from both Gulf wars that once war begins, the stock market surge. Peace on the other hand is stagnation and stagnation means deterioration of the market.

So after my read of the 3 markets 2 weeks ago, there is nothing much to see as the markets are still heading my way, therefore this boring essay.

Microsoft follow-up

I wrote an entry on Microsoft around 2 weeks ago due to a discussion with my sister-in-law. In that entry I was quite unsure of the direction it was heading and mentioned that I might need to wait another few weeks to be clearer.

As the trend of Dow Jones, Hang Seng and Nikkei has so far been going the direction I have estimated, I have decided to look into Microsoft this week.

Fig 1. Microsoft weekly chart

There are more certainties this week as to which direction Microsoft is heading, it tested the joint 8 & 21-week moving average resistances and failed to penetrate through, since then it has retreated.

At the same time, it is quite clear that there is a golden cross between 8 and 21-week moving averages, confirming its short and medium trend downward, plus the gradient of 55-week moving average is turning more gradual, indicating a possible change in momentum. 

Personally, I feel that Microsoft is heading south, at least until the 21-week moving average touches the 55-week, by then Microsoft itself should be below the 55-week moving average mark.

The support levels I am looking at are 267.688 to 270.244 and if this does not hold, 228.833 to 246.519.

Divergences

Chinese New Year and I am in Malaysia right now. The thing is that as long as I have my notebook, I can trade anywhere. 

I really do not like using mobile devices like my hand phone or tablet to trade, it is tougher to call out tools for reading. It is always easier to use a mouse than fingers to place measurement tools.

I spoke last round about alignment between Nikkei and Dow Jones, so what do I want to talk about today?

Fig 1 Dow Jones weekly chart

Fig 2 Nikkei weekly chart

Fig 3 Hang Seng weekly chart

I have shown the charts of Nikkei, Dow Jones and Hang Seng. This time round I am seeing MACD divergences on all 3 charts. As these are weekly charts, the effects are more long term.

Both Nikkei and Dow Jones have earlier reached higher high, yet their MACDs are experiencing lower high, this is an indication weakness in their climb. 

Nikkei went further with confirmation with a lower high thereafter accompanied with a lower high of the MACD. It is quite firm for the time being that Nikkei will be sliding down further, especially that it has not broken through the previous low. Not only that its 8-week moving average has just crossed the 55-week moving average. I should see further slide on Nikkei.

Dow has yet to see confirmation on its MACD, nevertheless, it has also broken through the previous low, reaching further downward. While supported by the 55-week moving average last week, its climb this week is not that spectacular, resisted by both 8 and 21-week moving averages. Its next week's descend will be quite crucial, can 55-week moving average still provide a strong support or will there be a more permanent breakthrough? 

Why am I bringing out Hang Seng here? Because it is also showing divergence, but in the opposite direction. Twice has Hang Seng reached lower low, but its MACD is having higher lows. As I have recalled of my earlier prediction, it possible that Hang Seng going to climb higher, at least to 55-week moving average.