Trading Day

The market action is trading more or less as expected. The market did make a volatility breakout of almost 10 points from yesterday closing price. The market did see active price action after breaking below the 926.73 key support to hit day low of 919.37. However I was quite impressed by the last minute push for the market to close at 927.78 which is above the 926.73 key support. From the way they push the market to make sure that the market to close above the key support level, I think I am reading it as a good sign of very strong market buying power.

Composite Index

The market withnessed a volatility breakout today and also active price action after the CI break below the key support (926.73) mentioned in this blog.

Composite Index

Market is expected to make a so called volatility breakout. Just wait for it to happen and enjoy the price action from there.

Double Fifth Day

Officially on falling on the fifth day of the fifth lunar month (31 May 2006), the Dragon Boat Festival is also known as Double Fifth Day. While many stories regarding its origin abound, the most popular and widely accepted version regards Qu Yuan, a minister during the Warring States Period (475 - 221 BC) Qu Yuan served as minister to the Zhou Emperor. A wise and articulate man, he was loved by the common people. He did much to fight against the rampant corruption that plagued the court-- thereby earning the envy and fear of other officials. Therefore, when he urged the emperor to avoid conflict with the Qin Kingdom, the officials pressured the Emperor to have him removed from service. In exile, he traveled, taught and wrote for several years. Hearing that the Zhou had been defeated by the Qin, he fell into despair and threw himself into the Milou River. Read more ...

Composite Index

Composite Index to monitor 938.68 for direction. The market is trying to build a stable base at level near 925 (actual number should be 926.73) level. Any breakout on downside from this level will see active price action. Have a nice trading day.

Composite Index

The market is trying to build a stable base at this level near 925. CI to monitor 938.68 for direction.

Conspiracy Theories and the Global Stock Market Melt-down

On Sunday May 14th, currency traders in London, picked up an obscure report from the UK's Observer newspaper, that indicated the International Monetary Fund was in behind-the-scenes talks with the EU, Japan, the US, China and other major powers to arrange a series of top-level meetings to tackle imbalances in the global economy, and address the dollar sell-off that was rattling global stock markets. Fearing a surprise rescue package for the US dollar, London currency traders began to lock in profits from the Euro's six week old rally to just shy of $1.30. As always, the first line of defense in the currency market is jawboning, and finance officials in Europe, Japan, and the US were out in full force, talking the Euro and Japanese yen down, and the US dollar up. Timely jawboning by G-7 finance ministers, helped to keep a lid on the Euro just below $1.30, and rescued the dollar at 109-yen. G-7 central bankers and finance officials are also alarmed by gold's spectacular surge against all major currencies over the past eight months, a clear signal that global investors have lost confidence in the purchasing power of fiat (paper) currency. A global flight from G-7 government bonds and into gold since September 2005, has lifted bond yields to multi-year highs in Japan and the US, the world's largest debt markets, and in a long delayed reaction, triggered big shake-outs in global stock markets in mid-May. Read more ...

WHO attempts to calm market fears of pandemic

The case has worried officials because it has affected so many people. This raises the possibility of transmission of the virus for the first time from a sick bird through one human to two others. After days of unrelated market turmoil around the world, traders on Wednesday attributed weakness in the Indonesian rupiah and the Australian dollar to fears that the case could step up warnings of a human flu pandemic. Read more ...

Power Up - The Invisible Tax!

“The new tariff structure encourages consumers to conserve energy instead of using electricity as if there is no tomorrow,” he said, giving an example that consumers need not set their air-conditioner at 16°C and that 24°C was good enough. Even with the 12% tariff increase, he said, Malaysia still had the cheapest electricity in the region with the exception of Indonesia. Read more ...

Composite Index

Composite Index to monitor 938.68 for direction.

Composite Index

Composite Index to monitor 938.68 for direction.

Emerging markets lead global decline

Investors around the world bailed out of riskier assets on Monday in favour of safe havens such as government bonds. Dealing in Indian stocks was suspended on Monday after the main index slumped 10 per cent in early trade. Gerry Fowler, a strategist at Citigroup, said: “There is now higher demand for hedging – people are expressing more genuine concern that the liquidity crunch is not yet over. Last week, people were thinking that the sell-off would be short-lived.” There were signs that investors were becoming more nervous, reflected by the rising cost of credit default swaps – insurance-like contracts that pay out if a company defaults. Read more ...

Composite Index

Week ago on May 11 2006 I posted in this blog to say that: "Next week to monitor closely again for 960.91 because if the CI were able to breakdown from this key level the market is expected to see violent price action."

Having withnessed the violent price action this week, I think you sure have good reason to check out this free blog - for my ZEN prediction - from time to time. Take what the market can give you. Not what you want the market to give you. Happy trading.

Bon voyage

Composite Index

Saw the price action after the market moved away from 960.91 key level? Why market reacted strongly to certain number? Happy trading!

Inflation - The Invisible Tax!

Basically, inflation (money supply growth) has turned people into slaves! No matter how much you save, it's never enough because things always seem to get more expensive. I'll let you in on a secret - as long as the current monetary system continues, life isn't going to get any easier. However, we all have to live within the system, therefore it is vital to understand the situation and invest in appropriate assets which will benefit the most from the ongoing monetary inflation. Read more ...

Composite Index

The market breakout from the 960.91 key resistance level and then moved all the way up to test the 970 level on Tuesday and closed the trading week at 966.05! Next week to monitor closely again for 960.91 because if the CI were able to breakdown from this key level the market is expected to see violent price action.

Mini Bubble

Greater Fool Theory? The Emperor's New Clothes? Tulip Bulb Mania ...? This is just a game of greater fool or naked emperor's new clothes. :)

Stock Review

These are some of the stocks that I mentioned to you in this blog. Some of them performed really well since they hit the breakout price. So no harm to monitor this breakout price for trading direction.

Composite Index

If one can predict the future one will own the whole world in three months. The market hit near the 960.91 resistance and then turned downward for almost the whole trading day. Finally the market closed at 961.38 which is above 960.91! The market will now obey 960.91 as strong support level and to break below this key level will see a violent price action. As a stock trader we profit from price action such as breakout or even a failed breakout. It is interesting to have witnessed that the market did actually pause at level near 960.91! Don't you think so?

Bullish and Bearish Divergences

Momentum indicators, such as the RSI, derive their value from price action. This can offer clues to overall market strength in the form of bullish and bearish divergences. For those who are unfamiliar with these concepts, a bullish divergence occurs when price hits a new low during a downtrend, but the RSI fails to make a new low. Conversely, a bearish divergence emerges on the chart when price scores a new high in an upmove, but RSI fails to confirm with a new high reading in that indicator. This negative divergence warns that the uptrend may be over. I heed this powerful signal and avoid taking new positions, even raise my stop losses to protect profits or exit altogether. The same holds true for lower prices in bear markets, absent accompanying new lows in RSI. This positive divergence forewarns the downtrend may be ending. Read more ...

Composite Index

Composite Index to monitor 960.91 for direction.

Tulip Bulb Mania

Could a mere tulip bulb be worth $76,000? It is if people are willing to pay for it! It may sound preposterous, but this is exactly what happened in Holland in the 1630’s. Suddenly tulip bulbs weren’t as quite as rare as before. The tulip market began a slight down trend, but shortly after started to plummet much faster than prices went up. Suddenly the market began a widespread panic when everyone started realizing that tulips were not worth the prices people were paying for them. In less than 6 weeks, tulip prices crashed by over 90%. Fortunes were lost. Wealthy became paupers. Bankruptcies were everywhere due to the negative side of option leverage. People that traded in farms and live savings for a tulip bulb were left holding a worthless plant seed. Many defaults occurred, where speculators couldn’t pay off their debts. In market manias, the investors are acting irrationally. Excessive greed causes people to feel financially invincible and make decisions that cause financial devastation. This process occurs regardless of if the market is a commodity market or a paper market like stocks. The moral is clear; the only way to survive is to be the smart money. Read more ...

A Simpleton's Guide to Economics and Investment Markets, Part I

if I look at the current economic expansion around the world, which began in the United States in November 2001 and increasingly looks like a global boom, the following features strike me as being unusual. Expansionary monetary policies have led to high debt growth in the US, which exceeds nominal GDP growth by a wide margin. Is this sustainable in the long run? Read more ...