Composite Index

Composite Index, see what other trader can see and see also what other trader cannot see because most human only see what they want to see but cannot see what they don't want to see. Happy trading.

Liqua

Liqua (2534) to monitor RM0.29 for trading direction.

All Asset Classes Are About to Correct

Commodities and stocks typically move in opposite directions, so one may wonder why both asset classes would go down together. First, they have been moving upwards together for several years, so a mutual respite is not unfathomable. Second, the commodity setback is likely to be sharp, but brief, while the flight from stocks and bonds is likely to be deep and extended. As money flees dollar-based assets (bonds now, stocks soon afterward), money will seek a new realm of safety, meaning real assets, and the commodity bull market will be recognized in earnest. Read more ...

Greater Fool Theory

Markets contain a tender balance between fear and greed. When the balance gets out of balance, buying is based on the premise that there is someone tomorrow that will pay you more than you paid today. The "true value", "real value", "replacement value", "substitute items values" and all other normal economic measures are ignored. Bubbles are not always easy to spot at the time. A large move in an asset is often said to be a bubble. As a trader that uses trends, I am always trying to understand the relationships of trends and the greater fool theory. I do not feel that anyone can predict the true status of a large continued trend. I do know they have always existed and will continue in the future. In the stock market everyday, traders/investors buy stocks for no other reason than the belief that you will be able to sell it to someone else for a higher price. A totally valid method of making money in the stock market! The problem is that eventually, the market realizes that the price level has just gotten too outrageous; and the speculative bubble pops. Read more ...

Symphony

Symphony (0016) to monitor RM0.39 for trading direction.

Composite Index

Composite Index to monitor 950.95 for trading direction.

Aiming for the Right Target in Trading

Losing traders spend a great deal of time forecasting where the market will be tomorrow. Winning traders spend most of their time thinking about how traders will react to what the market is doing now, and they plan their strategy accordingly. Losing traders often fail to acknowledge and control their emotive processes during a trade. Winning traders acknowledge their emotions and then examine the market. If the state of the market has not changed, the emotion is ignored. If the state of the market has changed, the emotion has relevance and the trade is exited. Losing traders often take themselves quite seriously and seldom find humor in market analysis or the trading environment. Successful traders are often the funniest and most imaginative people you will ever meet. They take joy in trading and are the first to laugh or relate a funny story. They take trading seriously, but they are always the first to laugh at themselves. Read more ...

Composite Index

Take only what the market can give you instead of what you want the market to give you.

The Emperor's New Clothes

The King marched proudly. All the subjects admired him. However, in the middle of the solemn ceremony an innocent voice dared to say the truth: His Majesty was in his underwear. Based on the story of Hans Christian Andersen

Composite Index

Composite Index MFI (money flow index) moving South direction. Monitor highest high for trading direction. Don't forget it is easier to see the PEAK if you were standing opposite to the PEAK. See the big picture?

Composite Index Weekly Chart

Composite Index weekly momentum still trading within downward channel. What if market managed to breakout from this downward channel? Remember the greater fool theory? Remember the tech bubble? Can you see the peak when you are at the highest PEAK? (hint: it is easier to see if you were standing opposite to the peak). Happy trading.

Asian Currencies May Extend Rally as G-7 Calls for Yuan Gain

``The honeymoon period is now really over,'' Jan Lambregts, head of research at Rabobank Groep, said in Singapore. ``The world is really starting to pressure China. There will be appreciation pressure on Asian currencies.'' The yen had its biggest rally in five weeks on the day of the Washington G-7 meeting. Gains in Asian nations' currencies would make their goods less competitive with Japanese exports, which are driving growth in the world's second-biggest economy. Read more ...

Composite Index

Composite Index is lossing its technical strength. Monitor the highest high for reversal sign. It is not easy to predict the peak but you will know when you see the highest peak. At the highest peak you will see nothing but the PEAK!

Both fire and ice will kill uptrends. As long as the greater fool mechanism holds, each new long allows the previous one to turn a profit. Eventually changing conditions force a final end to the upside action. A shock event can suddenly kill the buying enthusiasm, forcing a sharp and immediate reversal. Or the trend's fuel just runs out as the last interested buyer enters one last position. Skilled traders wait and measure the process of crowd disillusionment before they enter large short sales. Decline characteristics can be predicted with great accuracy using pattern analysis. While they wait, the repeating character of the topping event provides a natural playground for swing positions. TradingDay.com

Petrodollars: The 1970s Redux

From 1973-74, the price of oil would soar from $2.69 per barrel to $11.65, far surpassing Atkins' gasp-inducing estimate. By 1980, the price of oil was pushing $40 per barrel, and the world was forever changed. A massive shift in wealth began, the likes of which the world hadn't seen since Spanish galleons were laden with Incan gold and silver or Britain ruled and exploited the treasures of India. Will the march to $60 and beyond have an effect similar to the 1970s? The oil producers will have a lot of money, money that will be parked in banks or spent. The money parked in banks will find its way as new loans, as bankers hustle up new business in increasingly risky credits -- developing countries, speculative companies, increasingly leveraged real estate investments, and more. Read more ...

Composite Index

Composite Index to monitor 948.04 for directional trading. Happy trading. Traders encounter false breakouts and whipsaws throughout their careers. That shouldn't be surprising, though, because all we're doing is playing an odds game. Even a perfect setup can fall apart for no reason and with little warning. This reminds us that risk management is mandatory if we want to trade successfully. Read more ...

Hu stands firm on Chinese currency

Hu said he wanted to make foreign-exchange markets more efficient. But he said China was not ready for a drastic change in the value of renminbi currency, also known as the yuan. "Our goal is to keep the renminbi exchange rate basically stable at adaptive and equilibrium levels," Hu said. Read more ...

Composite Index

Composite Index to monitor 946.98 for trading direction. Inflation data came out higher than expected so market is pricing in the effect of higher RM?

THE END OF CHEAP OIL

From an economic perspective, when the world runs completely out of oil is thus not directly relevant: what matters is when production begins to taper off. Beyond that point, prices will rise unless demand declines commensurately. Using several different techniques to estimate the current reserves of conventional oil and the amount still left to be discovered, we conclude that the decline will begin before 2010. The world could thus see radical increases in oil prices. That alone might be sufficient to curb demand, flattening production for perhaps 10 years. (Demand fell more than 10 percent after the 1979 shock and took 17 years to recover.) Read more ...

Oil hits record above $72 on Iran fears

"This is a bull market and we have not found a top yet," said Tom Bentz, a senior analyst at BNP Paribas Commodity Futures in New York. Oil prices have soared from $20 at the start of 2002 and are nearing the inflation-adjusted peaks of over $80 hit in 1980, the year after the Iranian revolution. "The current shoot up we are experiencing is as a result of the Iran problems and it's not helped by the flare up between Israel and the Palestinians," OPEC President Edmund Daukoru said on Tuesday. Read more ...

Composite Index

Composite Index, not easy to change the big picture?! Continue to monitor 946.98 for direction.

Composite Index

Composite Index to monitor L2 for trading direction. Today is the last Fibonacci 89-day trading cycle. Can the rally from lowest low of 883 to outlive this trading cycle? Time will tell.

Exports and lending push China’s GDP growth to 10%

The 10.2 per cent rise in GDP and a renewed pick-up in capital inflows in the first three months of this year will maintain the pressure on China to allow a faster appreciation of its currency, the renminbi, a move that Washington has demanded for more than a year. A meeting of China’s cabinet on Friday, chaired by Wen Jiabao, the premier, said the main problems for the economy were too rapid growth of investment and credit, a relatively high money supply and a structural contradiction of foreign trade. Read more ...

Composite Index

Composite Index, see the big picture? Tomorrow is the last fibonacci 89-day trading cycle.

Stocks vs. Commodities

According to Gue, most of these cycles tend to be long term, 20 or more years. He believes we’re in the very early stages, maybe the first five to seven years of a major commodities uptrend, which could last well into the next decade. “If you can hitch your trailer to a major secular trend like that, you can certainly outperform the stock market over the coming 15 years or so,” he added. Gue noted instability in the global economy as a major driver of gold and precious metals at present, with the U.S. as the main driver. Read more ...

Composite Index

Since the certainty for a Hanging Man indicator is low, the trend reversal can be confirmed by a black candlestick or a large down gap on the next trading day accompanied by a lower close.

Peak Oil

Oil discoveries have been on the downside for decades. At the same time, oil production and daily consumption have been increasing from a diminishing reserve base. The trends are not our friends. The production and the reserve curves are intersecting. And when the big rollover occurs and global oil production flattens out for the long term, then enters the irreversible decline. Read more ...

Composite Index

Composite Index, Hanging Man?

The Invisible Hand

The conspiracy theory holds that these officials buy S&P 500 index futures through major Wall Street trading desks, with money from the Exchange Stabilization Fund, a $38 billion Treasury Department account to buy currencies on the open market and secret government offshore accounts. Believers say these activities are coordinated out of the Fed's New York branch on Liberty Street in Manhattan, just a block from the NYSE. Read more ...

Composite Index

Composite Index was pushed near to the mentioned resistance level (946.98) and then pulled back down. Continue to monitor 946.98 for direction.

Composite Index Weekly Chart

Composite Index weekly momentum still trading within downward channel.

Composite Index

Composite Index to monitor 946.98 for direction.

Contrarian Thinking vs Mass Psychology

A trader using mass psychology would start to tread with caution slowly locking in some gains but keeping his eyes open for possible quick opportunities. The biggest moves always come towards the end because the chaps that got burned shorting the markets and the neutrals that lost their mind sitting on the sidelines suddenly jump in and attack the markets with a combination of rage, frustration and despair. Bulls, Bears or neutrals never win in the long run (bulls remain bullish for too long, bears remain bearish for too long and neutrals are just too scared to commit). Only the trader that is willing to take a risk but based on the long forgotten concepts of using trend analysis, mass psychology and one who has a firm understanding of the two most important concepts in trading “patience and discipline” is the one that wins. Read more ...

Bull and Bear Markets in International Tensions

One reason the Russian economy is doing so well today may be because of the increase in commodity prices -- notably the quintupling of oil prices since 1998. Rising oil prices have led to trade and current account surpluses, and a soaring stock market (from its 1998 low at less than 50, the stock market index is now at over 1,400), and have boosted Vladimir Putin's international prestige and power. Consequently, if rising commodity prices have had a miraculous impact on the Russian economy over the last few years, we can safely assume that declining commodity prices and the collapse in oil prices in 1985/1986 must have dealt a serious economic blow to the former Soviet Union. Hence, I could argue that the catalyst for the demise of the Soviet Union wasn't the US military build-up in the 1980s, but the decline in commodity prices, which crippled its economy. Read more ...

Composite Index

Composite Index with higher high & higer low trading pattern. Is it a never ending story? Time will tell.

Composite Index

Composite Index moved out of the sticky zone again. Monitor 934.53 for trading direction.

Manipulation

'Anybody will admit that while manipulation is possible in the day-to-day market movement, and the short swing is subject to such an influence in a more limited degree, the great market movement must be beyond the manipulation of the combined financial interests of the world.' (Feb.26, 1909) '...the market itself is bigger than all the 'pools' and 'insiders' put together.' (May 8, 1922) Read more ...

Composite Index Weekly Chart

Composite Index weekly momentum is heading downward direction.