US Market

Market players are waiting to see whether US officials will be able to come to an agreement to the bailout package. The market has been plagued by high volatility lately.

The VIX closed at 34.73 on Friday. It spiked to a high of 42.16 on 18 Sep. Assuming that you buy into the Dow Industrial Average when the VIX went above 40 and hold the trade for approximately 1 year, the trading result is as follows:

Entry Date	Entry Level	Exit Date	Exit Level	% Change
1-Sep-98	7583.09	7-Sep-99	11079.08	46.1
4-Sep-98	7737.32	10-Sep-99	11087.00	43.29
8-Sep-98	7964.91	13-Sep-99	11027.40	38.45
11-Sep-98	7583.61	16-Sep-99	10795.77	42.36
14-Sep-98	7936.08	17-Sep-99	10745.38	35.4
1-Oct-98	7749.42	6-Oct-99	10399.77	34.2
2-Oct-98	7631.50	7-Oct-99	10588.34	38.74
5-Oct-98	7760.75	8-Oct-99	10534.52	35.74
6-Oct-98	7733.97	11-Oct-99	10649.76	37.7
7-Oct-98	7754.82	12-Oct-99	10648.81	37.32
8-Oct-98	7734.48	13-Oct-99	10412.31	34.62
9-Oct-98	7806.57	14-Oct-99	10230.89	31.05
12-Oct-98	8038.03	15-Oct-99	10286.61	27.97
13-Oct-98	7982.68	18-Oct-99	10018.45	25.5
14-Oct-98	7925.01	19-Oct-99	10117.54	27.67
18-Sep-01	8922.70	23-Sep-02	7984.77	-10.51
20-Sep-01	8375.72	25-Sep-02	7687.16	-8.22
21-Sep-01	8356.56	26-Sep-02	7844.62	-6.13
24-Sep-01	8242.32	27-Sep-02	7996.01	-2.99
23-Jul-02	7785.55	28-Jul-03	9284.92	19.26
24-Jul-02	7698.46	29-Jul-03	9268.19	20.39
5-Aug-02	8312.92	8-Aug-03	9127.36	9.8
6-Aug-02	8049.93	11-Aug-03	9189.62	14.16
7-Aug-02	8282.25	12-Aug-03	9218.12	11.3
20-Sep-02	7945.93	25-Sep-03	9425.58	18.62
25-Sep-02	7687.16	30-Sep-03	9378.10	22
8-Oct-02	7425.82	13-Oct-03	9675.72	30.3
9-Oct-02	7499.96	14-Oct-03	9763.27	30.18
10-Oct-02	7286.34	15-Oct-03	9824.09	34.83
19-Sep-08	11027.51	Open	Open	1.05

You have a total of 30 trades with 26 ending with a profit.

China HongXing

China Hong Xing has fallen from peak of $1.45 on Oct 2007 to a low of $0.34. That is a whopping 76% drop.

The technical indicator is showing a mixed picture.

The price is closed to the lower Bollinger band and 20 days moving average is showing sign of flattening.

The –DI is greater than +DI which is a bearish signal. However the ADX is also decreasing suggesting that the stock may consolidate in the current region before a new trend develops.

The MACD line is about to cut the MACD Signal line which is a bearish sign. However there is a possibility of a MACD divergence as shown in the MACD histogram. So the bears may cover their shorts and wait for the price action to confirm the next move.

STI September Performance

September has started and hopefully this Sep will see some better trading environment.

Entry Date	Entry Price	Exit Date	Exit Price	% Change
1-Sep-88	1,031.80	3-Oct-88	1,023.10	-0.84
1-Sep-89	1,363.70	2-Oct-89	1,375.30	0.85
3-Sep-90	1,265.60	1-Oct-90	1,103.40	-12.82
2-Sep-91	1,429.00	2-Oct-91	1,357.00	-5.04
1-Sep-92	1,378.50	1-Oct-92	1,351.00	-1.99
1-Sep-93	2,008.70	1-Oct-93	2,015.30	0.33
1-Sep-94	2,315.70	3-Oct-94	2,334.40	0.81
1-Sep-95	2,146.60	2-Oct-95	2,120.00	-1.24
2-Sep-96	2,153.50	1-Oct-96	2,175.70	1.03
1-Sep-97	1,805.60	1-Oct-97	1,954.80	8.26
1-Sep-98	826.93	1-Oct-98	938.08	13.44
1-Sep-99	2,116.71	1-Oct-99	2,021.14	-4.52
1-Sep-00	2,158.77	2-Oct-00	1,970.93	-8.7
3-Sep-01	1,622.21	1-Oct-01	1,329.54	-18.04
2-Sep-02	1,485.16	1-Oct-02	1,345.69	-9.39
1-Sep-03	1,608.59	1-Oct-03	1,621.06	0.78
1-Sep-04	1,921.48	1-Oct-04	1,986.96	3.41
1-Sep-05	2,289.58	3-Oct-05	2,302.03	0.54
1-Sep-06	2,489.21	2-Oct-06	2,571.45	3.3
3-Sep-07	3,390.84	1-Oct-07	3,734.94	10.15
1-Sep-08	2,739.95	Open	Open	0.69

Looking back at the September STI Index performance from 1988 till 2007, there were 11 winning September months. That is about 55% chance that you will end up better if you buy the index at the beginning of September and hold it till the first trading day of October. There were also nasty down move like in 1990 and 2001. Lets see how the index will perform this month. But looking at how the Dow gave up its gain yesterday night, it doesn’t look promising.