SGX breadth sucks

The graph below shows STI (blue) with the daily number of SGX stocks making 1 month highs (the scattered dots) since the start of the March rally. These are smoothed as a 1-month moving average (red line). Sub 20c stocks are excluded.

The divergence since Aug is too clear. How long can this continue? Either the STI must go down, or the number of stocks making highs must go up.

I did not find this indicator useful in predicting past market tops. So it is only to show what is happening now.

Bought SIA Eng

Tues 24th Nov 09. Bought 3 lots @ 3.07.

Cut loss 2.85.

SIA Eng

After 5 months of flatlining, breaks out on high vol.

Large C&H.

Sppt @ 2.85, next resistance at 3.25.

Still a non trending market until proven otherwise, makes me hesitant to buy on breakout.

Perfect buy point would have been several days ago after it pulled back to the support.

Bought KepLand

Fri 20th Nov 09: bought 3 lots @ $3.05.

Cut loss at $2.75 (previous low).

KepLand breakout?

$3.00 is the previous June high, as well as 50% of the white candlestick.

Pros:

• Clearly broken out on high vol, with low vol retracement.
• Daily price/vol action shows accumulation since July.

Cons:

• Buy on breakout risky in non-trending mkt. Next sppt after $3.00 is hard to determine. At what point would I cut loss?

US mkt currently down nearly 2% tonight, see how it goes and how this S'pore mkt reacts tmr. Will KepLand hold at $3.00?

Bought Bukit Sembawang, Rotary Engineering

Wed 18th-Nov-09:

• 10 lots Rotary Engineering @ 1.07
• 2 lots Bukit Sembawang @ 4.88

Both showing MACD-divergence, may have broken out of trendline. I await: HH on high vol.

My scanning criteria. I want:

• tocks that have not fallen much in the past 2 month.
• Volume should be high on up-days and lower on down days. Rotary shows this, BS a little. In the current market, there are a lot of stocks showing distribution (eg: SGX, Guocoland).
• MACD or MACD-H divergence with price.

I took positions abt half my normal size, because still not sure of overall market direction:

• US indexes making new highs, but no solid volume confirmation, and depth had not confirmed the uptrend (12th Nov) either.
• Singapore market seems trendless.
• But the individual charts good with well defined cut loss points... must remind myself that by the time everything is perfect, the opportunity will be gone.

With hindsight, bought at intraday high as they went down today :( But at least today's down was light volume.

Added more money

+70K to my account.

Now have 225K cash, almost all of my savings.

Sold everything

Because we are in a correction.

Today (2nd Nov 09):

• 10 lots Midas @81.5c
• 20 lots Boustead @ 73.5c
• 2 lots Kep Corp @ $8.07
• 12 lots RMG @ $1.33

Singapore market (not juat STI) is holding up remarkably well.

Update tomorrow (3rd Nov 09):

• Sold 26 lots Cambridge @ 44.5c

Calculated a nett 28K gain (approx 28%) over 2.5 years (July 08 to now)... this includes a terrible bear market and probably the fastest recovery we'll see in our lives. Includes dividends, and estimates brokerage.

Now keep a watchlist of counters showing strength - this correction may end in a week or two.

Watching Bukit Sembawang

Has held up well:

Bought 1 lot at 4.82 and 4 lots at $4.83 in the past few weeks, but sold them at $4.79. Lets see if it holds up during the correction.

US market: finally in downtrend

S&P500 now down 5% from its high, and showing clear patterns of distribution.

Should have sold after the weak vol rebound on Thurs, but too busy/tired at work. Sell tomorrow, even though SGX will be hammered. Holding will just compound the mistake.

I still think this is a correction in a liquitidy-driven uptrend, which may end next year. Keep reminding myself: I do not know for sure.. do not know how far the market will fall until after it happens.

From memory (no records) most corrections last for 2 weeks. Correction is now one week old and 5% down. So I should be still look for opportunities - monitor stocks showing strength and see.

Just a note that IBD's distribiution day count method was a little unreliable in the 2 months leading to this downturn. There were many 'market under pressure' calls amd one false 'market under correction' in Mid Aug - which was corrected a day later'. Probably does not work in a non-trending market, wait at least a few days for confirmation (weak volume rebound) before rushing to sell.