Tuesday, June 23, 2009

Should I sell?

US mkt has been rangebound for a while, falling, but without enough volume to break the uptrend. Trend bending but not broken. Can go either way.

To KISS, I hold stocks in a uptrend as long as possible until a definite break in the trend. Buy on fundamentals, sell on chart. I look for:
1) Lower high, lower low
2) reversal patterns (double top, H&S).
3) Support and resistance
4) Short term candlestick patterns. Just started looking at these.
I don't believe in trendlines as they always get redrawn.

Can't see resistance/support lines. But the large vol for the 3 days circled in May will be resistance:
Stock has not performed well. No clear uptrend. Weekly chart shows large consolidation from Oct - can go either way.
Would like to sell this one as it has underperformed the rally but can't see where to. Cannot see trend at all.

Uptrend flattening but not clearly broken. Hold.
Can the last candle (hammer) act as a short-term reversal? Need to see if confirmed.

SIA Eng:
(Daily) Uptrend slowing, no cause for me to sell yet.

(Weekly) If it clears resistance around 2.90, there is no resistance for a while.


No sign of reversal *yet*.

May be reversing, hard to tell.

If we zoom in, it has very barely made a lower high and lower low.
I can choose to keep holding until a more descisive breakdown, or sell half.

Cant see anything. No Support, no resistance, no higher highs and lows, nothing.
No reversal sign. Gone down recently - 50% retraction of the sharp run-up from May around 60c, so its still considered normal.
Hold. The chart is so hard to read I will probably only sell this when the whole market changes.

Cant read this chart either. Not in a downtrend, so hold.

Zoom in and it may barely be forming a lower high, lower low. Not definate. Zoom out and its still in an uptrend.

Still in uptrend in the past few days, defying the market. Announced big contract on 22nd Jun.

Sunday, June 21, 2009

Sold Tat Hong

8 lots, cut loss @ 98c, Fri 19/Jun. Loss of $1450 incl brokerage.

In hindsight, it was a mistake to buy this counter, SIA Eng and SGX without a clear entry point.

May be able to do that at the start of a rally, but not after such a powerful multi-month rally.

Saturday, June 13, 2009

Book: Predict Market Swings with Technical analysis

by Micheal McDonald (2002).

Worth reading, probably only worth buying unless you are interested in trend following and timing the market indices.
  • Believes in market timing. focus on the book is predictive the market as a whole
  • Gives his mental model of the market: long term based on fundamentals, short term series of unpredictable feedback loops.
  • From his study, these 'emotion driven' feedback loops can cause price movements of up to 25% or more, for no pressing economic reason. Maximum of 13 weeks max in a decline, 26 weeks (6 months) for an advance, possibly followed by 3 months stabilization.
  • Based on these time periods, he uses 132day and 72 day MAs for market timing with good results. Then tries to combine them: takes the average of these 2 MAs, (i.e.: buy when market breaks above this average, sell when it breaks below it). Interesting idea if you want to try trend following.
  • Gives some simple scientific reasons/analogies showing why the market is sometimes predictable and sometimes unpredictable. (e.g.: card counting in a blackjack game).
  • Believes Elliot Wave theory works only sometimes when the market is predictable. Actually, I think this is true of all Fundamental/Technical analysis.

The current rally, from mid-Mar, is now 3 months old....