Again, before we determine if this is a market bottom, we have to look at the big picture and the economy.
1. Is inflation worry really there? Gasoline prices were actually down 2% in April because of "seaonally adjustment". Huh? I also like this view on gasoline prices
2. Are we going to avoid a recession or are we already in a recession? Retail sales were in line with expectation at -0.2%. If you were to exclude autos, they blew past expectation at 0.5%. Inventories increased only at a slow pace of 0.1%. Even housing starts increased above expectation. Everything was very good in fact but market response was decent. Dow was up about 2% for the week. However, volume was low thus showing that rally was weak. Apparently, most people out there believe that we are already in a recession just that technically (numbers wise) we are not.
3. Like I am mentioned on the previous post, the big picture now rests on oil prices. For the first four days of the week, I was pretty down because oil was not going my way, so were currencies. Gold was a pain in my ***. It was until friday that my mood started to lighten up because of Goldman Sachs. It's kinda amusing that when oil prices seem to be going down, Goldman Sachs will issue some bullish report about oil. That's twice in a row and oil went very close to $128. Gold was up $22. Because of stop loss issue, I have to close out my Gold contracts at $880. Maybe I should change my stop loss to become the bulk of the margin. I will try to figure out that soon.
4. Well the same story applies for currencies as well. Everything was against me until friday when oil spiked. I was back to square one after friday. Luckily, the currency trading is not working on CNBC and I think they ban ip addresses outside US.
Week Ahead
I will try to be more concise this time. My overall stand is still the same. I don't believe in this rally and I think we are going down. The catalyst that will bring us down - Crude Oil.
Market did well for the week and if you look back at my previous post "Gloom, Doom, Boom and Foom~", I mention that if S&P500 does break through the 1400 barrier, we should be seeing a nice rally to 1450. Just trying to refresh your memory for short term view of the market.Some Commodities
This is the week chart for Gold. Well I see a possible three white soldiers play for next week. I hope you know what is three white soldiers by now. Germany's growth provides a reason for ECB's stand with holding on interest rates. So, I like gold for long term and also next week. Its a very self fulfiling prophecy kind of thing. Its like "Gold will reach $1000". This kind of notion will be embedded in everyone's mind. Just like "oil will hit $100". Its the same.
I can't see any big movement on crude oil though. But it looks like we are heading $130 though. No catalyst can be seen. I consider "Goldman Sach" as an unforseen source.
Currencies
Well, this is weekly chart of Dollar. See that it hit the index level of 74 twice for the past two weeks and failed to rally past it, before closing down lower for the week. Two black crows here. So what's next? Seems like dollar is still going down.
Stocks
Well, I am still positive about shorting Airlines. I covered my position on AMR at $9. Oil was horrible during the first four days. Sadly, I keyed in another order to short AMR at $10 but AMR only reached $9.9! In the end I shorted AMR at $9.30. Oh ya, I covered the other airline stock, Southwest Airline, as well. It didn't stay below $13. Covered at $13.30.
Please See
I am actually quite busy for this week with SIA cup. Have been studying a lot on it. I know Jay Peg is hot favourite and his form is unstoppable. It has not been raining, so I doubt Cosmo Bulk will win it. After listening to trackwork, I have decided to change my picks. If this horse wins, I must thank Michael Maxworthy, a race commentator at the turf club.
SMS no. 7 KING AND KING.
Reasons
1. The weather has been freaking hot. 34 degree celsius at kranji these few days.
2. Oversea horses can't acclimatise to the hot weather. Dubai is quite cooling actually. So Jay Peg will not suit as well.
3. I call this destiny. King and king was not supposed to run in this cup. But unarguably, he is the best long distance horse in Singapore. He faced a lot of problems and came back nice and fit, along with a decent 5th at 1600m behind Chevron. If he were to win, what an article it would be for the papers. "A replacement winner". He was 2nd to Cosmo Bulk before and you can't take that away.
4. Trackwork of King and King was awesome. Like what Michael said, it worked better than Onceuponatime.
So, my quartet pick is 1st King and King, 2nd Cosmo Bulk, 3rd Onceuponatime, 4th Jaypeg. I look at the stats and horse no.3 has come in top 3 for 7 years in a row. So Cosmo Bulk should come into top 3 as it is no.3. Well, Onceuponatime has not finished further than 3rd in all of its races. Looking at year 2000 results, Singapore horses came in 1st and 3rd, so I guess Onceuponatime will come in 3rd. Jaypeg is good so I leave him to fourth.
As for Krisflyer, it is definitely Universal Ruler. No doubt. A 3 year old horse will win it. North boy did it, Iron mask did it. They were both outstanding horses so Universal Ruler will do it as well.
Please Please See
I see returning vistors here and I am quite pleased with that. However, I believe you have a lot of questions or doubts or criticisms in mind. It is better if you were to ask through comments and label yourself as anonymous. We are all in a learning process and I believe I am ahead in this process. So I can pull you along if you have any queries or something.
Lastly, I will do a further update on stocks after the cup. I will be going to Kranji. So this is a very rushed post. Sorry about this.
Go KING AND KING. I will sms No.7.
Latest Update
This is a daily chart of Olam International - a STI component commodity stock. Well, commodity stocks are supposed to be stellar stocks nowadays. Just look at Noble. It is quite hard for commodity stocks to go wrong at this point of time. However, Olam posted weak earnings compared to its peers. Well I compare it to Noble. From the chart, you can see that Olam is trending upwards in a channel form. I am bearish with Olam and I believe it will break the bottom trendline pretty soon. It closed at $2.92 last friday.
We move on to the weekly chart of Olam. It is quite obvious that it is in a strong uptrend. However, it appears to be facing some resistance at $3. Volume has been weak for past few weeks of gains. This is the first black candle after eight weeks of trading. It is also in a hanging man formation, thus showing a possibility of trend reversal. I suggest shorting Olam at $2.90 with probably 20% of your stakes. If it breaks the bottom trendline which I have mentioned above, short it at $2.8 for the next portion of your stakes. You can safely short the rest of your intended position if Olam goes below $2.75. My short term target is $2.50. I believe it can go lower though to $2.25 if you can hold your shorts for more than 1 month.
Tradershub
For those playing tradershub, you may want to consider long Celestial for the week. It is in a three white soldier formation. Great earnings along with nice trading volume last week. Buy Celestial till $0.99 for 12% gain.
Horse racing
My predictions were way off. Gone with too much emotions. Jay Peg won valiantly, so did Takeover Target.
“If somebody had told me my method would not work I nevertheless would have tried it out to make sure for myself, for when I am wrong only one thing convinces me of it, and that is, to lose money. And I am only right when I make money. That is speculating.”
Jesse Livermore
1 comment:
The big picture looks pretty bad.
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