Trading System

STI In Sideway Trend

2012-01-15T14:02:00.000+08:00

Singapore stock market started the year on a positive note. The Straits Times Index started at 2646 on the first day of trading and is now at 2791, sitting slightly above its 50 day and 100 day moving averages. The current technical charts do not paint a picture of sustained rally at this point. The 14 day ADX is well below the 20 level mark, indicating that there is no strong trend at

Time Based Index Trading Method

2011-11-20T15:49:00.001+08:00

There is a market saying that one should sell in May and go away. This year, this theory proved to be a good advice. Let’s do a study on STI index to see how this strategy pans out. For simplicity, let’s assume the following trading rules: a. Long Trading Rules:Buy STI index in the beginning of Oct every year. Set a stop loss of 10% If stop loss is not triggered by May next

STI July Performance

2011-07-04T14:39:00.000+08:00

Market looks to be on a recovery mode. The statistics for STI in July is actually not so bad. Based on historical values dated back to 1988, there are 13 out of 24 periods in which July closed with a higher value at the end of the month. Let’s see how the market will perform this year. Entry DateEntry PriceExit DateExit Price% Change 1-Jul-881105.401-Aug-881162.605.17 3-Jul-891298.101-Aug-

Gold Price To Test 1477 Level

2011-05-16T07:30:00.000+08:00

Gold price tested the lower boundary of its uptrend channel last week and is now sitting right at the support level of the uptrend channel. Gold price is a beneficiary of the weak US dollar and is a good hedge against inflation. In part, the down move last week was caused by regulatory bodies that required higher margins for commodities trades in order to curb speculation. There are a few

Genting Likely Test $1.74 Level

2011-03-19T09:55:00.000+08:00

The financial markets across the globe have been hit by the powerful quake and tsunami that hit Japan. And with problems in the Middle East yet to be resolved, extreme selling pressure caused most markets to lose all the gains that were made in 2011 so far. Genting Singapore is no exception. The stock hit a high of $2.35 in Nov last year and is now at $1.88, resting nicely at the lower

Shanghai Market Positive Signs

2011-03-07T07:56:00.000+08:00

Shanghai stock market had a series of corrections and rallies for the past 2 weeks. The index hit a low of 2661 in late January before rebounding to a high of 2994 on 22 Feb. The index is now testing resistance at current levels. There are a few positive signs in the current market behavior. Firstly the index is able to rebound off its critical support at 2681 within one trading session even

Strength MACD Indicator

2011-01-30T16:20:00.000+08:00

We all know that trading volume is a very important factor to consider when doing technical analysis. For example if a stock moves up on high volume, it usually means more upside in the future because there is more market participation. If stock price moves up on low volume, there is a high chance that the rally has no strength and momentum is not enough to push the stock higher. A systematic

Property Counter Under Attack

2011-01-16T19:09:00.000+08:00

The new measures announced by the Singapore Government to curb speculation in the property market caused property counters to react negatively on Friday. With effect from 14 Jan 2011, property owners will need to fork out 16%, 12%, 8% and 4% if they choose to sell their property within the first, second, third and fourth year respectively. Assuming that a property speculator wants to cash out

REIT Yields

2011-01-09T12:44:00.001+08:00

CapitMalls Asia is offering $200 million worth of bonds comprising one and three year notes to retail investors. The yield for the one year bond is 1% pa and for the three year bond is 2.15% pa. This is better than what you can get from fixed deposits. If you have a bigger risk appetite, you can consider buying the REITS instead. The yields from Singapore are generally higher than 4% based

Double Top and Head & Shoulder Pattern

2011-01-02T13:06:00.000+08:00

Chart pattern is used extensively by traders to identify candidates that are likely to make a big move either upwards or downwards. Traders need to look out for two important patterns in 2011 in order to avoid being hit by a sell down. These two patterns are the double top formation and the head and shoulder formation Conditions for double top formationStock is in an uptrend Forms a

EURUSD Warning Signs

2010-12-31T08:25:00.002+08:00

EURUSD is making a comeback for the past few trading days. It has risen above its 20 day moving average which is a positive indication. The MACD indicator is still above its signal line showing that bulls still have the upper hand. But we should not lose sight of the big picture. If you look at the down swing from 25 Nov 2009 to 7 Jun 2010, the currency pair traded from its low in Jun 2010

STI Trend Score System

2010-12-29T14:08:00.002+08:00

I have covered this method in my previous posting. I am repeating it here for readers that have missed out on this simple indicator that can be used for trading index ETF like STI ETF. This is a trend indicator that was derived by by Tuschar Chande. It is a method of rating the trend by comparing the current day’s close to the close x days ago. If today’s close is greater than close x days ago

How To Identify Strong Or Weak Stocks

2010-12-09T14:34:00.003+08:00

In momentum trading, traders pick the strong stocks to go long and weak stocks to go short. However the key question here is how do you determine if a stock is a strong stock or a weak stock? You should be able to tell from the price chart if a stock is looking strong. For example if a stock keeps making higher low and higher high, it falls into the strong stock category. By the same

Investment Madness

2010-11-28T07:33:00.000+08:00

We are all prone to having psychological preconceptions or biases that make us behave in certain ways. These biases influence how we assimilate the information we come in contact with on a daily basis. They also have an impact on how we utilize that information to make decisions. Our very own psychological biases have an impact on our investment decisions and affect our attempts at building

Smoothing The Bollinger %b

2010-11-14T14:35:00.001+08:00

Bollinger bands were developed by John Bollinger and it consists of 3 lines derived from the moving average and standard deviation of closing price. Sylvain Vervoort, a Belgium based retired electronics engineer who has been using technical analysis for more than 30 years, came out with an indicator SVE_BB that takes the Bollinger band and converts it to an oscillator that range between 0 and

Two-bar Breakout System (2BB)

2010-11-06T10:56:00.001+08:00

The 2 bar breakout system is designed to capture short term trends by going long or short depending on the pattern formed by the 2 most recent price bars. The essence of this method is to look for reversal of the immediate directional momentum. The rules of this method are: Long trades Enter:Today’s low is less than the previous day low Today’s high is less than the previous day high

Forex auto trade – How to get monthly cashback form forex trading

2010-08-26T07:15:00.000+08:00

Author: Douglas Smith Forex auto trade is a way of making money on the forex markets by using Forex auto trade trading systems. The most widely used trading platform in forex auto trade is the Metatrader 4 trading platform. It has several advantages. For example, by using so called Expert Advisors you can trade forex automatically even when you sleep. Forex Megadroid, FAP Turbo and Forex Shocker

Mortgage Rates Predictions - What the Charts Are Telling Us

2010-08-13T06:49:00.000+08:00

Author: Ed Lathrop Mortgage rates have a lot to do with how well the economy is performing. When mortgage rates go up, people can no longer afford to invest money in new properties. This, of course, brings a slow down to the building trade and it also means less money will be flowing through the economy. On the other hand, when mortgage rates go down, more people are able to buy homes. The

High Probability ETF Trading Method

2010-07-24T11:29:00.002+08:00

ETF has become popular in overseas market, particularly the US market. In Singapore, we are beginning to see more ETF that can be traded over the stock exchange. However, the daily trade volume is no where near those that are traded in US. Those that want to trade ETF may be better off doing it with a US broker. There are numerous methods to trade the ETF. One of the easier methods to

Dr Alexander Elder - Entries & Exits

2010-07-16T05:51:00.002+08:00

Dr Alexander Elder is a trader and author of trading books (Trading for a Living, Come Into My Trading Room and Entries & Exits). His explanation of trading in the book “Entries & Exits” is exceptional. “Successful trading is based on three M’s – Mind, Method, and Money. Mind is your trading psychology; Method is how you analyze markets and make trading decisions; Money is risk control.

Parkway Holdings

2010-06-27T13:24:00.003+08:00

Price of Parkway Holdings retreated from the $3.92 high set on 11 Jun 2010 to close at $3.62 on Friday. The closing price is lower than the $3.78 a share partial offer from Khazanah Nasional Bhd. The technical chart is showing weakness in the short term. MACD indicator is now below its signal line. RSI is dropping from overbought levels and stochastic indicator is also showing further

STI At Critical Levels

2010-05-08T10:49:00.003+08:00

Volatility is back in the market. Dow went to 9787 levels during Thursday session, showing us how ugly the market can get when bad news hit the market especially when we have such a huge rally that took us from the March 2009 lows till the April 2010 highs. For the STI index, the initial knee jerk reaction took the index below the up trend channel line. The index managed to recover some

Sell In May And Go Away

2010-04-26T07:22:00.002+08:00

The stock market has a famous saying of “Sell in May and go away”. Should you be doing it this year? A look at the STI index from 1988 to 2010 shows that there is a 50-50 chance that the market will go down from May to Oct. The performance of the STI index is shown in the table below Entry DateEntry PriceExit DateExit Price% Change4-May-88972.704-Oct-881005.303.353-May-891284.903-Oct

Vortex Indicator

2010-03-14T20:48:00.001+08:00

The Vortex Indicator was developed as a new directional movement indicator. It is very similar to the directional movement indicator that originated from J. Welles Wilder.The calculation of the index involves 8 steps.1. Compute +VM = ABS(Today’s High – Yesterday’s Low)2. Compute –VM = ABS(Today’s Low – Yesterday’s High)3. Compute True Range4. Compute A = sum of +VM for the past N days5. Compute

STI Statistics For Mar

2010-03-06T13:45:00.002+08:00

Dow managed to close at 10,566 points on Friday, moving up 122 points. Nonfarm payroll for February came out better than expected. 36,000 jobs were lost compared to an expected decline of 68,000. In Singapore, the STI index managed to close on higher grounds on Friday as well with the index closing at 2790. The performance of STI in Mar is slightly favorable to the Bulls. Going with trading

Hang Seng Index

2010-02-28T11:38:00.002+08:00

Hong Kong stock market improved over the week. The Hang Seng index dropped below its 200 day moving average in early February but managed to close slightly above it for the last trading session of February. The technical charts are showing a mixed picture. The MACD signal is above its indicator line which is a bullish sign. However, the RSI is approaching overbought levels. In a bullish

Pivot Points

2010-02-06T11:34:00.001+08:00

Pivot Points A trader needs reference point to enter a trade, place stop loss level and profit taking level. There are a number of ways to derive such reference points. One method is to draw trend lines on charts to determine support and resistance level. Fibonacci theory is also another favourite way to check for potential support and resistance points. A more mathematical method is

US Stock Market - More Weakness Ahead

2010-01-24T10:23:00.002+08:00

Dow, S&P500 and Nasdaq index broke below their uptrend line on Friday. Volume has been picking up and this suggests real selling and not just profit taking.The recent weakness started off from China when news broke that banks have been told to suspend lending. Although the suspension was not system wide, the market reacted nevertheless with Shanghai index moving down more then 3% and Dow closed

US Market Update

2010-01-19T08:40:00.000+08:00

Some negative signs are showing up in the technical charts for S&P500 index. Firstly, the MACD indicator is about to make a bearish crossover. The –DI is above the +DI and RSI is seen to be turning down from overbought levels. All these signs point to a weaker market in the short term.However having said that, the uptrend is still intact as the trend line connecting the lows is still not

Sentiment Indicator

2010-01-07T22:19:00.003+08:00

Recently, I read a book that describes an indicator to measure the sentiment of the market. It uses data from data that is readily available from the CFTC website (http://www.cftc.gov).This website provides a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by CFTC. This information is useful

STI Update

2009-12-19T15:55:00.002+08:00

STI hit a high of 2827 on Thursday but succumbed to selling pressure to close at 2802 on Friday. Going towards the end of 2009, the index looks to be consolidating at current levels. The technical picture shows the MACD indicator below its signal line which is a bearish signal. The ADX has fallen to around 17 which correspond to the weakening of the uptrend. Short term stochastic is also

STI is safe for now

2009-11-29T10:58:00.004+08:00

Dubai’s announcement to restructure its biggest corporate debtor, Dubai World, and delay payment on some of the company’s US$59 billion of liabilities caused tremors across global stock market.Singapore market was closed for holiday on Friday and did not bear the brunt of the global selling. Its impact will be felt on Monday on market open for business.The technical charts are still showing a

Market Correction Or Trend Reversal?

2009-11-01T10:44:00.002+08:00

Dow Jones Industrial Average closed at 9712 on Friday down 249 points. The moved erased all the gains made on Thursday. The index closed below the uptrend channel and is at dangerous territory. The RSI is now at 45 level. Note that RSI has not fall below 40 level since Jul 09. MACD is showing bearish signal as well with the indicator below its signal line. -DI is set to cross the +DI, this may

SC Global

2009-10-11T10:18:00.003+08:00

SC Global has come a long way since hitting a low of $0.295 on Mar 09. Prices tested $1.42 on 5 Oct 09 before rebounding to close at $1.63 on Friday 9 Oct 09. SC Global is in the luxurious property sector. Sale of Seven Palms Sentosa Cove got underway and it managed to sell 6 out of 10 released units in a recent private preview. Transacted price range from $3,100-$3,400 psf with each unit

Singapore Market

2009-09-26T11:19:00.002+08:00

STI index has stayed within a 200 points range since it broke the 2424 resistance level in mid July 09. The bulls pushed the index to 2700 on 4 Aug 09 but could not overcome the sellers that came in to take profit.The market correction that analysts talked about has materialized. Investors have been buying on dips and that strategy seems to be working since March 09.The technical charts are

Shanghai Market

2009-09-06T09:53:00.004+08:00

Shanghai market tested the uptrend line this week. The good news is the uptrend line is still intact with the support level holding on to attacks from the bears.However there are a few warning signs appearing on its weekly chart.Firstly, the MACD indicator has cut down from its signal line. The indicator has stayed above its signal line since end of Nov 08.Secondly, the +DI is about to go below

Dow Potential RSI Divergence

2009-08-29T14:09:00.003+08:00

Dow closed at 9544 on Friday, down 36 points for the session. For the week, the index rose 39 points.The technical picture is mixed at this point.The ADX and DIs indicators are indicating a continuing up trend.RSI is showing a divergence pattern with the Dow making a high this week but with no confirmation from the RSI indictor. This is bearish and suggests a possible sell down.The MACD indicator

STI Update

2009-08-09T14:44:00.001+08:00

Singapore market closed slightly below 2600 level on Friday. This was the first time the market made a series of “Black Candles” since it broke out of the 2424 level on 20 July 09.Fibonacci retracement level is at 2527 (38.2%) and 2417 (61.8%) respectively.RSI has dropped from overbought levels and is now at 57 level. There is no RSI divergence at this point and this suggests that the up trend

Dow Updates

2009-07-25T09:56:00.002+08:00

Stock market has rallied across the board. The Dow Industrial Average is now above 9000 level. The index is currently at Jan 2009 level. Technically, the charts are looking better. Just a few weeks ago, there was a possibility of a sell-off based on the head and shoulder pattern. That did not materialize. And when the pattern failed, the market rallied. The reverse seems to be happening. An

Dow Industrial Average Potential Head & Shoulder Pattern

2009-07-05T13:21:00.005+08:00

Stock market around the world is in corrective phase except for the Shanghai market which went above the 3000 resistance level.If you look at the technical charts from US, Hong Kong, Singapore etc, the charts are all showing a potential head and shoulder pattern. For US Dow Industrial Average, the index needs to stay above 8200. If it

COSCO

2009-06-14T13:03:00.002+08:00

Cosco is approaching resistance level of $1.47 again. The stock price broke through $1.39 on 8 Jun 09. However bargain hunters emerged on the 9 Jun 09 and the rebound took it back above $1.39. The stock chart has been making higher highs and higher lows since it bottomed out in early March.Cosco needs to take out the price level of $1.47. If it is able to take out this level on high volume, the

STI Update

2009-06-07T17:29:00.003+08:00

Dow Industrial Average reached a high of 8839 in the opening minutes before succumbing to selling pressure. It lost all its gain and went into negative territory before buyers came in to bring up the index. Market closed at 8768, up 12 points for the whole session.The non-farm payroll showed a decline of 345000, a better than expected number of job losses. However un-employment rates reached a

US Market

2009-05-31T12:27:00.002+08:00

Market continued to rally higher in May. The upward momentum seems to be slowing down as the market hit critical resistance level.The S&P500 index is approaching its 200 day moving average. The market has been going sideways for the past few trading sessions with the index moving in a band of 880 and 930 levels.The index has rebounded from its 20 day moving average and seems to be moving towards

STI

2009-05-10T14:37:00.002+08:00

STI made a spectacular recovery from its March 09 lows. The index climbed from a low of 1455 to reach a high of 2283 last Friday, a gain of 56%.Technical indicators are showing a positive picture. The 50 day moving average has made a crossover with the 100 day moving average. MACD line is above its signal line. +DI is above the –DI with an ADX value that is above 30. Continuation of the bullish

STI Update

2009-04-26T08:11:00.001+08:00

We have a pullback of the index this week. STI dropped from 1896 to close at 1852 for the week. The index went below the 61.8% retracement level on Tuesday but was able to snap back from the losses.As long as the index is able to hold above 1754 level, we still have a pattern of higher highs and higher lows. This bode well for the bulls.The 50 day moving average is upward sloping and the index is

STI Update

2009-03-30T07:54:00.001+08:00

STI index retraced the complete downswing from 1780 to 1455. The index fell 13 points on Friday.The index has stayed above its 50 day moving average for 5 trading days now. Any fall is healthy if the index can stay above its 50 day moving average.A similar situation occurred in Jan 2009 where the index went above its 50 day moving average only to make a new low of 1455 on 10 Mar 09.A bullish

US Market Update

2009-03-21T10:21:00.003+08:00

Dow Jones rebounded from its low of 6440 set on 9 Mar 09 to end at 7278 yesterday. That is about 13% rebound in the span of 2 weeks.The rebound has taken the index right up to its 50 day moving average. Last night the market was not able to take out the 50 day moving average. That is not a good sign. However, it may turn out to be just a pause before the index attacks its 50 day moving average

Dow Update

2009-02-28T14:05:00.002+08:00

Dow industrial average has fallen to 1997 levels. It has broken its Nov 07 low of 7392. The picture looks bad at the moment. ADX is at 49 levels and –DI is above +DI. This suggests a continuation of the down trend. MACD indicator has also crossed below its signal line, another bearish indication. The only bright spot is that the RSI indicator has not made a new low yet and divergence of RSI can

Dow Jones

2009-02-15T17:20:00.001+08:00

The Dow Jones Industrial Average looks to be forming a bottom. The index is near its Nov 07 low of 7392. The trend is still bearish at this point in time. However there are 2 positive signs in the technical charts. Firstly, the weekly MACD indicator is above its signal line and secondly, the weekly RSI seems to be forming a divergence signal. The index needs to break the downtrend channel line in

Capitaland

2009-02-12T08:04:00.002+08:00

It is interesting to see Capitaland shooting up even though it announced a rights issue.The technical indicators sure look good at the moment. The MACD made a bullish crossover on 10 Feb 09 on heavy volume. Stochastic indicator also made a bullish crossover. RSI is increasing and is not in overbought/oversold territory.The stock is approaching resistance at $2.90. This level also coincides with

SPC

2009-02-10T08:17:00.001+08:00

SPC had a good run recently. It rallied from a low of $2.18 on 21 Jan 09 to a high of $2.86 on 9 Feb 09. Goldman Sachs downgraded the stock from “neutral” to “sell” and reduced its target price from $1.80 to $1.60.The stochastic indicator is indicating short term weakness as the %D line has just crossed under the %K line making a bearish crossover.The force index has also decreased from a high

10 Stocks To Ride A Recovery

2009-02-01T13:08:00.002+08:00

The Lunar New Year got off to a good start this week. The index managed to gain 61 points for the week to close at 1746 on Friday.However US market experienced a triple digit loss of 148 points on Friday to end at 8000 level. This will put some pressure on the Singapore market on Monday.The latest issue of Edge investment weekly has recommended 10 stocks to ride the recovery. The list is as

SPH

2009-01-19T07:59:00.001+08:00

Analysts are looking at the potential dividend payout to support the shares. Citi Investment Research expects a 9.9% dividend yield for FY2009, Kim Eng expects a prospective 7.5% dividend yield in FY 2009. DBS and OCBC are forecasting dividend yields of 8% and 7.1% respectively. For more information please refer to The Edge Investment Weekly.The technical picture for SPH is not looking good. It

Capitaland

2009-01-11T07:53:00.001+08:00

Capitaland had a roller coaster ride this week with the stock going to as high as $3.68 before hitting a low of $2.89 on Friday. The stock managed to close above its low on Friday to end at $2.91.The stock is now sitting on the 61.8% Fibonacci Retracement level as well as the support level. With the Dow closing near its low of the day on Friday, this support level will be difficult to hold come

STI Update

2009-01-05T07:35:00.002+08:00

DOW opened 2009 with a bang, going up 258 points to close above 9000 points for the first time since 5 Nov 08.Singapore market also got off to a good start on Friday with the index closing above 1800 points.The technical indicators are bullish at this point but do not seem to point to a sustainable rally.The MACD indicator is still above its signal line which is a bullish sign. But one concern is

City Development

2008-12-01T07:59:00.002+08:00

City development is testing the upper boundary of its down trend channel.MACD just made a bullish crossover and it indicating further strength.ADX is decreasing which is a good sign. This means that the down trend that we have seen in the past few months is decreasing in strength. However the +DI is till below –DI suggesting that the current rally is most likely to be a bear market rally. The +DI

Keppel Corp

2008-11-23T14:35:00.001+08:00

The stock market volatility continued to haunt market traders. Dow surged from 7509 to end at 8046 in the last hour of trading. News that newly elected US president is getting Timothy Geithner as treasury secretary gave traders a reason to buy up battered stocks.The show of strength should spur Singapore’s market come Monday. Keppel Corp, once a market darling, has come a long way down since

Dow Support Level

2008-11-19T07:33:00.001+08:00

Dow closed at 8424 on Tuesday, up 151 points. The index tested 7947 level, the low established on 13 Nov 08. It managed to rebound and claw back above the 8000 level. Buyers came in only in the last hour of trading.The index looks to be forming a double bottom and has managed to find buyers whenever it hit below 8000. Next resistance level is at 8835 and support level is at 8085.

Sembcorp Marine

2008-11-04T07:35:00.001+08:00

Sembcorp Marine is having a good run recently. Recovering from a low of $1.15 set on 28 Oct 08, this stock has rebounded to a high of $1.98 yesterday. That is an impressive move of 72% percent in the span of 5 trading days.The price has hit the pivot point made on 10 Oct 08 which is serving as resistance level. The stock has also retraced more than 50% of the down move from $2.73 to $1.15. The

STI Statistics

2008-10-26T07:05:00.005+08:00

Dow was down 313 points on Friday to close at 8378. The big plunge that was supposed to take place based on activity in the futures market did not happen. Dow futures plunged 550 points on Friday morning, triggering a temporary trading halt. A 313 points (3.6 percent) drop is therefore something that no one expected.In Asia markets, Singapore STI drop 8.33%, Japan Nikkei drop 9.6%, Hong Kong Hang

STI Update

2008-10-18T13:05:00.002+08:00

US market tried to overcome from market weakness on Friday. However at the close, it succumbed to market forces and Dow was down 127 points. At one point, the Dow index managed to put on a gain of nearly 300 points. The optimism could not hold and the index gave back all the gains plus some extra losses to end at 8852.The STI index dropped 72 points on Friday in anticipation of further weakness

US Market

2008-09-28T20:17:00.003+08:00

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

China HongXing

2008-09-11T07:42:00.002+08:00

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

STI September Performance

2008-09-03T11:45:00.001+08:00

September has started and hopefully this Sep will see some better trading environment.Entry DateEntry PriceExit DateExit Price% Change1-Sep-881,031.803-Oct-881,023.10-0.841-Sep-891,363.702-Oct-891,375.300.853-Sep-901,265.601-Oct-901,103.40-12.822-Sep-911,429.002-Oct-911,357.00-5.041-Sep-921,378.501-Oct-921,351.00-1.991-Sep-932,008.701-Oct-932,015.300.331-Sep-

Shanghai Update

2008-08-19T08:38:00.002+08:00

Shanghai market was whacked again yesterday. The Shanghai Index closed at 2319 down more than 5%.The index is now at the year 2001 level. The immediate support is at 2245 level which is the high set way back in Jun 2001.For those that are still holding to their stocks since the index broke out of 2245 level, all the gains have more or less vanished.We are back to square one again.

STI Update

2008-07-28T08:13:00.001+08:00

STI made a pivot low on 16 July and it has met a resistance at 3000 level. The market is not out of the woods yet.STI is still trending downwards. Based on Fibonacci Analysis, the downside objective point is at 2546. There is also support at 2745 level, the low that was established on Jan 08 and Mar 08 respectively.

Dow Update

2008-07-13T07:29:00.001+08:00

It was a see-saw trading session on Friday for the US Market. The Dow Industrial Average dropped to a low of 10978 before bouncing to a high of 11239. The Bears attacked the market again bringing the index down to close at 11100.The index managed to make a higher high and higher low on the 5 minute chart which indicates some strength towards the closed of the session.The VIX is charging towards

STI AD RSI

2008-06-30T08:05:00.004+08:00

I received a request for analysis of STI using the AD line derived from the 30 stocks in the FTSE STI Index.The 13 day AD RSI is now at 28.24 level. It is certainly oversold. If you apply the technique of buying the STI index when the AD RSI rises above the 30 level, you will be 9 winners and 2 losers and 2 trades that are still opened.The trading record is shown below:Entry DateEntry PriceExit

Dow Update

2008-06-29T11:46:00.002+08:00

US market was hammered again on Friday. The Dow closed at 11346. From the 5 minute chart of the Dow, we can see that the index was attacked by the Bears from the opening bell.The only positive sign is a bounce off the lower Bollinger band at around 1.45pm. The index managed to stage a higher low near the 61.8% Fibonacci Re-tracement Level. It is now resting at the lower Bollinger band. The

US Financial Sector

2008-06-21T15:13:00.002+08:00

Dow closed at 11,824.69, down more than 200 points. The index is now very close to 11,508, the low established on Jan 22 2008.The headlines are saying that the fall on Friday is due to credit woes and high oil prices. If you look at XLF (Select Sector SPDR-Financial), the MACD chart is hinting on a potential reversal.The XLF established a low of 22.13 on 11 Jun 08 and it reached a low of 21.86 on

China Hong Xing

2008-06-15T07:58:00.001+08:00

China Hong Xing was hammered this week. The stock closed at 0.45 on Friday, a loss of 20% in 5 days. That is a significant profit for the bears.RSI is in extremely oversold levels. There is no sign of rebound from the price chart.ADX is above 20 and with –DI greater than +DI, this point to a downtrend. The –DI is now greater than 40 level. A similar pattern occurred on 22 Jan 08 and at that time

Dow Update

2008-06-07T10:46:00.002+08:00

The Bears came out to party this week. The Dow closed at 12209, down 429 points for the week.The loss on Friday erased the 214 point gain made on Thursday. Jobs number came in worst then expected and high oil prices were the culprit for the Friday decline.Looking at the weekly chart for the Dow, there should be support at 12155, 11952 and 11508. If the index breaks below 11508, we are looking at

China XLX Trend Score Case Study

2008-06-03T07:31:00.004+08:00

This is a case study of using Trend Score Indicator on China XLX.For definition of Trend Score Indicator, please refer to my earlier post.Entry Rules:1. Today’s trend score is less than -5.2. Yesterday’s trend score is greater than -5.3. Enter a short position on the next trading day at the market opening price.Exit Rules:1. Close the trade after 10 trading days.The trading result is as follows:

STI June Performance

2008-05-27T08:33:00.000+08:00

This is the performance of STI in June from 1988 onwards.Entry DateEntry PriceExit DateExit Price% ChangeDraw Down %Max Gain %Bars Held6/1/198810066/30/198810938.620.008.62186/1/198912796/30/198913082.23-5.642.82216/1/199015566/29/19901527-1.85-2.130.79206/3/199115666/28/19911490-4.84-4.840.00176/1/199215116/30/19921481-1.95-2.270.81206/2/199318956/30/19931803-4.88-9.140.27206/1/199422806/30/

STI Updates

2008-05-26T07:50:00.001+08:00

Cracks are appearing on the STI chart.The index closed below the lower part of the Bollinger band on Friday. Not a good sign. The Bollinger band has narrowed significantly compared to a few weeks ago. Market is searching for a reason to breakout of the trading range. Now it seems like high oil price has given the Bears reason to come back to sell down the market.The –DI went above the +DI on 22

Pristine Shorting Method Case Study - AIG

2008-05-20T18:25:00.004+08:00

There is a request to do a case study for shorting a stock using Pristine Method. Let’s pick a US stock as I have more historical data for US market.I have selected American International Group (Symbol: AIG) and the data stretches from 1988 to 19 May 2008.The trading rules:Entry1. Price made 3 or more consecutive higher highs2. Price made 3 or more consecutive higher lows3. Price made 3 or more

US Investors Say It's Time To Buy

2008-05-18T17:35:00.003+08:00

Close to half the affluent US investors see the stock market as a “buy” with energy as the industry and Asia as the region to be.Based on a poll conducted by Bloomberg/Los Angeles Times, 44% of those with household incomes of US$100,000 or more view it as good times to buy stocks versus 15% who say it isn’t.The poll results signal some Americans may be ready to shift part of the US$3.5 trillion

Swing Trading Method

2008-05-11T17:06:00.006+08:00

This is a method described by Oliver L Verez in his book, “TOOLS AND TACTICS FOR THE MASTER DAY TRADER”.The method uses candlestick pattern and the relationship between the highs and lows of the price bar to determine entry points.Entry Rules1. Price made 3 or more consecutive lower highs2. Price made 3 or more consecutive lower lows3. Price made 3 or more consecutive black candle (closing price

Dow Update

2008-05-10T20:12:00.003+08:00

The Dow Industrial Average closed at 12745 points, down 120 points. For the week, the index was down 313 points.The index is now resting at the lower trend line of the upward price channel. It is also near the 50% Fibonacci Retracement level.Next week will be a critical week. Let’s hope the index will be able to stage a rebound from current levels.

Yield Curve Study

2008-05-07T08:37:00.004+08:00

The yield curve is simply a ratio that is derived by dividing a long term yield with a short term yield.For example, the yield for the US Treasury 3 month bill closed at 1.62 and the yield for the US Treasury 30 year bond closed at 4.66 on Tuesday. Therefore the value for the yield curve is 2.88 (4.66 divide by 1.62).The steepness of the yield curve can be used to predict the performance of the

30 Year Bond Yield Method

2008-05-02T15:07:00.004+08:00

This method was described by Mark Boucher in his book “The Hedge Fund Edge”. The method makes use of 30 Year Treasury Bond Yield to decide whether to enter or exit the market.The method is pretty simple. It will buy the S&P when the 12 month rate of change of the 30 Year Treasury Bond Yield is less than 9%. The position is held until the 12 month rate of change of the 30 Year Treasury Bond Yield

Sell In May And Go Away

2008-04-30T07:55:00.002+08:00

There is a market saying that one should sell in May and go away. Statistically, May to October period is not a good time to be in the market.If you look at the STI index, the period from May to October has underperformed the period from October to May.The probability of win if you buy in May and exit in October is 50%. However there were 5 periods with double digit losses. For $10,000 invested

SVAPO Case Study - Synear Food

2008-04-27T12:15:00.005+08:00

This is the application of SVAPO indicator on Synear Food. The simple trading rules can be found in my earlier post on SVAPO IndicatorThe trading record is given below:Entry DateEntry PriceExit DateExit Price% ChangeBars HeldDraw Down %Max Gain %Bars Held1/31/20071.82/5/20071.968.89308.888932/14/20072.12/21/20072.02-3.813-8.09520.952432/22/20072.122/27/20072.38.493-0.47178.490633/8/20071.753/13/

SVAPO Metastock Code

2008-04-24T18:11:00.003+08:00

There is some problem when I try to paste the metastock code into the blog site. Some of the characters went missing. So I am posting the screenshot of the metastock formula.You will need to do some typing to see this indicator in action.

SVAPO Indicator On Yanlord

2008-04-23T22:31:00.004+08:00

SVAPO is an indicator presented by Sylvain Vervoort in the Nov 07 issue of the Stocks & Commodities magazine.This indicator combines price and volume information into a Short-Term Volume And Price Oscillator.The Metastock code for the indicator is given below:{calculate the heikin ashi closing average haCl and get the input variables}haO:=(Ref((O+H+L+C)/4,-1) + PREV)/2;haCl:=((O+H+L+C)/4+haO+Max(

STI Update

2008-04-22T08:29:00.003+08:00

STI index broke closed at 3171 yesterday. It managed to break through 3200 but it could not stay above it.Looking at the chart, the index needs to stay above 3130 which is the support line. This is also where the neckline resides. The index tried to break out of this neckline in early Apr but failed. It only managed to break this level after a pullback to 3035.The index has moved from a low of

Dow Inverse Head And Shoulder

2008-04-20T08:03:00.003+08:00

Dow broke through 12800 points on Friday boosted by better earnings result from Google which rose about 20%.The Dow chart is looking like a breakout of an inverse head and shoulder pattern. During the beginning of the week, it looked as if the right shoulder would not be formed. However due to better earning results, the index managed to claw back and break out of the 12800 level which is where

Dow And VIX Update

2008-04-13T18:29:00.004+08:00

On Friday's trading session, the Dow Industrial Average closed down 256.56 points at 12325.42. General Electric shocked investors with lower-than expected earnings and a profit warning that wiped $46.9 billion off its value and sent the overall market slumping.The VIX closed at 23.46.If you look at the VIX chart, you can draw a trend line ("Blue Line") connecting the bottom formed on Oct 07, Nov

COSCO Trend Score Case Study 2

2008-04-08T17:03:00.004+08:00

Based on an initial investment of $10,000 dollars, your account would have grown to $130,000 in 4 years.Entry DateEntry PriceExit DateExit Price% ChangeAccount1/2/20040.6153/9/20040.8843.09$143093/11/20040.894/27/20040.85-4.49$136675/28/20040.86/4/20040.755-5.63$128976/7/20040.7656/15/20040.745-2.61$125606/30/20040.7758/11/20040.85510.32$138579/7/20040.83511/2/20041.0424.55$1725911/8/20041.1112/7

COSCO Trend Score Indicator Case Study

2008-04-08T07:56:00.003+08:00

This is a case study of trading COSCO based on Trend Score Indicator.For more information on Trend Score indicator, please refer to my earlier post http://stockstudent.blogspot.com/2008/03/trend-score.htmlI have assumed the following trading rules.Entry (For long trades)1. Trend Score for today is greater than 5.2. Trend Score yesterday is less than or equal to 5.3. If condition 1 and 2 are true,

STI Turtle Trading Breakout

2008-04-06T18:32:00.002+08:00

Dow closed at 12609.42 on Friday trading session. For the week ending 4 Apr 08, Dow was up 393 points. STI closed at 3155.56, up 123 points for the week. If you look at the weekly chart for the STI, you can see that it is the 2nd consecutive “White” candle. Both “White” candles closed near the high which is a bullish sign.The STI also broke through its 20 day high on 2 Apr 08. If you are a

Dow Long Term Chart

2008-04-02T08:06:00.003+08:00

Dow closed up nearly 400 points. That is amid news of further $19 billionwrite-down at UBS and plans at Lehman to raise $4 billion of capital.The financial stocks did pretty well. Citigroup Inc. shot up 11 percent,JPMorgan Chase & Co. rose 9 percent, and Lehman surged 18 percent.Let's look at the long term chart for the Dow Industrial. The monthly chart shows that the Dow is now very close to the

YangZiJiang Trend Score Case Study

2008-03-30T20:25:00.001+08:00

This is a case study for using Trend Score Indicator on YangZiJiang Shipbuilding.To recap, Trend Score indicator is a indicator invented by Tuschar Chande. For more information on Trend Score indicator, please refer to my earlier post http://stockstudent.blogspot.com/2008/03/trend-score.htmlI have assumed the following trading rules.Entry (For long trades)Trend

STI KST Chart

2008-03-28T10:55:00.000+08:00

The KST cut above its 8 day exponential average on 26 Mar. Based on historical pattern, this is a bullish sign. Looking back at the chart, the last time this happened was on Feb 14 08 and the index went from 2949 to 3098. A 5% up move in 5 days.

S&P 500 MACD Divergence

2008-03-25T11:46:00.001+08:00

The S&P500 index seems to have bottom out and there is currently a MACD divergence. The low made on Mar 10 was not matched by a lower low on the MACD histogram chart.Looks like a text book divergence pattern.

The Impulse System

2008-03-23T13:37:00.002+08:00

This system has been covered in a number of books by Dr Alexander Elder. From the book “Entries and Exits, Visit To Sixteen Trading Rooms”, it seems that this system is used as a censorship system rather than an automatic trading system.This system uses the slope of the moving average and MACD histogram to classify the system trends. There are 4 types of markets:

STI April Statistics

2008-03-20T08:22:00.002+08:00

We are coming to end of Mar. Based on historical data for the STI index, performance of STI in Mar has not been spectacular. You have a 50-50% chance of market ending up in Mar.What is the likelihood of market going up in Apr? A total of 13 profitable "Apr" months so far. A much better performance than "Mar" months.

Market Updates

2008-03-18T09:56:00.001+08:00

The KST chart for Nikkei 225, Dow and Singapore STI are showing the same down trend pattern.There seems to be a cycle pattern in this KST indicator. The time in which the KST (Red line) stayed above the 8 day KST exponential average (Green line) is approximately the same as the time in which the KST stayed below the 8 day KST exponential average.For STI, the Red line stayed above the Green line

Trend Score

2008-03-16T18:10:00.001+08:00

This is a trend indicator that was derived by by Tuschar Chande. It is a method of rating the trend by comparing the current day’s close to the close x days ago.If today’s close is greater than close x days ago, score = 1If today’s close is less than the close x+1 days ago, score = -1Tuschar Chande suggested comparing the close to the closes from 11 to 20 days ago.Therefore,Trendscore = 10 day

Dow and VIX Updates

2008-03-16T13:46:00.002+08:00

Friday was another down day for the Dow. It closed at 11951 points, down194 at the close. The VIX reached a high of 32.89.A high value for VIX means there are a lot of fear in the market. If you look back on the historical value for VIX, you can see that weexperienced similar high volatility back in 2001 and 2002. The trend for the Dow is still to the down side.The index is now firmly below its