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Stop Making Emotional Decisions With Your Investments
Three Ways to Stop Making Emotional Decisions With Your Investments
by Marc Lichtenfeld, Advisory Panelist
Highlights in this issue:
- Why you should remember this line from Robert De Niro when investing.
- It's tough to separate sentiment from reality when investing in this sector.
- Three ways in which you can separate emotion from reality.
Dear Investment U Reader,
"You think they're your friends, but they're not your friends."
This was the frequent refrain from a landlord I had while in college. He was warning us on the danger of throwing parties and inviting people who we considered friends, but would think nothing of trashing the place.
I guess it's not surprising that renting his house to college kids made him a little paranoid. He often showed up at random times to make sure there was no revelry taking place. Once, he chased away some of my buddies as we were watching "Monday Night Football" (I guess the keg in the corner didn't help our argument).
This no-nonsense, unattached attitude is the perfect way to approach the stock market and your investments. After all, most investors have had stocks that we thought were our friends, but that ultimately turned on us and caused pain.
The trick is to not become emotionally attached to them.
This is easier said than done, so if you find yourself hanging onto stocks for too long, or investing more with hope and emotion than sound reasoning, allow me to give you some tips...
When it Comes to Emotions, Adopt the "Heat Mentality"
I was fortunate that my stock market education started at a trading desk, where we executed trades according to how the market and stocks were performing. Period. Nobody cared if the stock had a low P/E ratio... whether the company had the next great biotech drug... or was run by a terrific management team.
To us, stocks merely represented three or four letter symbols. That's it. In some cases, I didn't even know the names of the companies and couldn't have told you much about their businesses.
Sounds a bit clinical, doesn't it?
It was. And it served me well. I learned that you shouldn't get emotional about stocks. They're simply investment vehicles in which to park your money. Granted, you can be in a stock for five minutes or 20 years, but you should never form a relationship with them.
As Robert De Niro's character said in the movie, "Heat": "Don't allow yourself to get attached to anything you cannot walk away from in 30 seconds flat if you feel the heat around the corner."
Think about it. Many of us have owned a favorite stock - perhaps for years. Oftentimes, the longer you hold it, the more difficult it can become to sell it - even when you know you should.
We form an emotional attachment to the business that often has nothing to do with how the stock is performing - or how much money we're losing from it.
This can be an issue, particularly in the biotech and health care spaces...
It's Easy to Form Emotional Attachments in This Sector
One of the key price catalysts for a biotech or health care company is when a medical advancement is made. For example, a new cancer drug is approved, a company sees strong clinical trial results, etc.
Not only are we happy that our investment is worth more, but we also feel good about being involved with a company that saves lives or alleviates suffering.
For that reason, some investors form particularly emotional relationships with early-stage companies that show great promise.
In The Xcelerated Profits Report, I recommended Medivation (Nasdaq: MDVN). The company is currently developing one of the most promising drugs to combat Alzheimer's Disease - Dimebon.
When I made the recommendation in August 2007, I believed Dimebon would work and that the potential reward was worth the risk. Aside from the human issues surrounding Alzheimer's, it was strictly a financial decision. And if the drug is successful or not, the decision to recommend selling the shares will be made for financial decisions only.
You Must Separate Emotion From Reality
That said, I'll be terribly disappointed if the drug is a dud. Not only for my subscribers, but also for millions of Alzheimer's patients and their families. The disease runs in my family, so it's especially personal.
However, I won't let those emotions get in the way of taking a profit or cutting a loss. If it doesn't work I'm not going to hang on to hope, looking for some morsel of data that justifies holding onto the stock. The bottom line is that if the drug isn't proven to be safe and effective, I don't want to own the stock anymore.
Biotech investors often tell me that they can't/won't sell a stock because they've become emotionally invested, as well as financially. This isn't surprising -dreams of riches and a better world are wrapped up in these tiny companies.
But you simply cannot allow that to happen, otherwise you risk taking a double hit if things don't pan out in your favor.
So how can you remove emotion from the equation if you're not using a stop? Fight emotion with emotion.
Three Ways to Take the Emotions Out of Your Investment Decisions
#1: Write Down Your Reasons:
When you buy a stock, write down the reasons why you'd sell and post it somewhere near your computer. Perhaps it's when the stock hits a certain price, or when news on a particular drug comes out.
Whatever the reason is, write it down on paper and stick it in a visible place. That way, when your catalyst hits, it will be tougher for you to justify to yourself why you're going against your original idea.
#2: Phone a Friend:
This doesn't just work for "Who Wants to Be a Millionaire." Telling a friend or family member your reasons for selling a stock is even better than writing the reasons down for yourself.
After all, you'll face some serious peer pressure if you suddenly change your mind and refuse to take profits or cut a loss. Outsiders aren't as emotionally involved as you because it's not their money on the line, so they should be able to make you see that your original reasons are still right.
#3: Conduct an Annual Portfolio Review:
Review your portfolio at least once a year. Take a look at every stock and ask yourself why you're still holding it. If your answer sounds more like a justification than a legitimate reason, dump it.
Any time there is money involved, emotions run high. Of course, it's easier to get less attached to stocks in other sectors. For example, many investors have no problem letting industrial stocks go when their stop-losses are triggered.
But it's your job to remove as much of it as you can and focus on decisions that will benefit your portfolio.
Marc Lichtenfeld
P.S: Letting emotions get in the way of your buy and sell decisions is a "two steps forward, one step back" approach to investing that is likely to hold you back from maximizing your profits. Instead, always base your decisions on sound reasoning, coupled with the powerful strategies that will help you beat the market - and the crowd.
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Unless the long term trend is broken n reverse, the short term trend are just correction noises n worry.
The long term trend is your friend, the short term trend is the devil haunting us daily, making us worry everyday n affecting us emotionally.
So it all depends on individual trading strategy.
richtan ( Date: 09-Sep-2009 00:26) Posted:
"Wall Street climbs a wall of worry." , there bound to have corrections, consolidation as mkt dun go up in a straight line.
cheongwee ( Date: 09-Sep-2009 00:19) Posted:
I thk dow need something very very solid to soar...look like now it is losing steam recently, am i right?
so is our sti???anybody care to say a few line as to the reasons why??? |
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"Wall Street climbs a wall of worry." , there bound to have corrections, consolidation as mkt dun go up in a straight line.
cheongwee ( Date: 09-Sep-2009 00:19) Posted:
I thk dow need something very very solid to soar...look like now it is losing steam recently, am i right?
so is our sti???anybody care to say a few line as to the reasons why??? |
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 Wat!! Oh my gosh, did Warren Buffet ever went for sex change, not I m aware of.
louis_leecs ( Date: 08-Sep-2009 23:37) Posted:
| becareful music stop ppl rush to exit point,,,,,,,,,,,,,,,warren buffett is selling more share rather than buyin more share in second qter,,,,,,,,,,,,and now she still doing tis and leave more cash to buy more bond,,,,,,,,,,,,,,,,,,look like climate change,,,,,,,,,,,,,,,,,and alot insider selling more company share,,,,,,,,,,,,,insider who was director,,,,,big fund mnger,,,,,,,,,,,,so SAFETY FIRST,,,,,,,,,,,,,,,,,,,,BECAREFUL MUSIC SUDDENLY STOP,,,,,,,,,,,,IM 100% CASH LIAO ,,,,,,,,,,,,,,,,,,,,,,,,,,AND 60% CPF,,,,,,,,,,,,,,,AND 100% ON CHINA UNIT TRUST,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,IM ALMOST TWO WEEK AT BUKIT TIMAH HILL,,,,,,,,,,,,,,,,,,,,,,,,,,,,MY SIXTH SENSE MORE AND MORE,,,,,,,,,,,VERY STRONG FEELING E DAY VERY NEED LIAO,,,,,,,,,,,,,,,,,,,,,,,, |
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The Dow Will Hit 10,000 in 2009
by Dr. Mark Skousen, Advisory Panelist
Highlights in this issue:
- Three reasons why the Dow is going up.
- Insights from Jeremy Siegel.
- Why the Dow 10,000 in 2009 isn't crazy.
Dear Investment U Reader,
Wall Street has been debating the huge run-up in the Dow Jones Industrial Average.
Was March the beginning of a huge rally that will take the market to new highs? Have we witnessed the proverbial "dead-cat bounce?" The prognosticators have been unsure, uncertain and uncommittal about what they see coming next...
So let me make it clear where I stand: We are in the beginning of a new bull market that will carry us to 10,000 on the Dow by year's-end - and new highs within a couple of years.
Yes, the recovery will be volatile. But now is the time to buy, despite the big run up.
No doubt there's plenty of bad news out there - rising unemployment with no end in sight, threatened tax increases on capital gains and dividends, anemic corporate profits, commercial real-estate insolvency, federal deficits, continued threats from the Middle East and Afghanistan, the specter of inflation and high interest rates among others...
This list goes on and on. But as the old saying goes, "Wall Street climbs a wall of worry."
It's all for naught - and I encourage you to look past these sideshows and distractions. I'm convinced the stock market is headed higher - a lot higher. I'll share my reasoning and tell you why Jeremy Siegel feels the same way.
Three Reasons the Dow is Going Up
Over the past few months, three things have been sticking out to me like huge blinking aircraft landing signals. Here's why we're going to keep moving up..
The Fed. Bernanke and the Federal Reserve are pulling out all the stops to stimulate the economy. Since September 2008, the money supply (M2) has been growing at an incredible 13% rate, one of the highest in the post-World War II period.
As Milton Friedman has demonstrated time and time again, after a lag of between six and nine months an easy money policy will cause a sharp recovery in the economy and stocks. Economists call it the "Friedman Effect."
Mortgage support. The Obama administration has been working hard at bailing out all the unstable banks, bad mortgages and bad assets in the economy through massive deficit spending. Essentially, the government policy is putting a floor under the residential real estate market, which will keep it from collapsing any further.
History sides with the bulls. Last month, I had dinner with Jeremy Siegel, professor of economics at the Wharton School and author of the bestseller "Stocks for the Long Run." He is a firm believer in looking at historical trends, something that many investors and Wall Street analysts have forgotten. And right now, the trend favors the bulls.
Well, guess what? The lag is over, and the "Friedman Effect" is taking full effect. We can expect higher stock prices and a recovery in the economy by year-end. And as a result of the administration's efforts, housing sales are on the rise and real estate prices are stabilizing.
It's why I'm so interested in real estate lately. Take a look at my last column, "Real Estate: The Buy of the Century."
Adding more fuel to my position, when I sat down with Wharton's Wizard he showed me an interesting long-term chart of the S&P 500 Index.
The Wizard of Wharton's Long-Term Outlook
You'll note that every time the market hit the bottom of his long-term chart, it rallied - sharply. And that's exactly where it was in late February when I met with Professor Siegel - at the bottom.
Sure enough, in early March Wall Street rallied - and it hasn't looked back. It's now up 30% from its lows. Between you and me, he called the exact bottom of the stock market within weeks. (Of course, so did a few of our analysts as well.)
How far up can it go? I asked this precise question to Professor Siegel last month.
He told me that he has just completed a study of how well stocks do after a major crash like the one we just experienced (falling 50% from its highs). His conclusion was pretty striking: After a major bear market, stocks on average rebound 24% the first year of recovery. And just as nice, the average annual return over the next five years is 18%.
Since the Dow was around 8,300 at the first of the year, it could climb back to 10,000 by year-end. (And 18,000 by 2013.) We could comfortably hit these numbers with an additional 19% gain.
Although many believe the "easy money" has been made - and they may be right - the market will still offer plenty of profitable opportunities in the coming months. It'll be volatile, but it's certainly not too late to get aboard.
Good investing,
Mark
ozone2002 ( Date: 08-Sep-2009 22:22) Posted:
Sell Stocks, Buy Gold, The Trade of a Decade!
What was the SEC doing...?
But first, what the stock market and the economy are doing...
In the past two days, the price of gold has shot up more than $40. It's now near $1,000 an ounce.
Why? We don't know. Rumors, talk, noise...there's plenty of that. But as for why investors are suddenly putting so much money into gold, we'll have to wait to find out.
But should you buy gold now? The answer is simple: yes and no.
The Trade of the Decade is still buy gold/sell stocks. And the decade isn't over. If you have US stocks, this is a good time to sell. The Dow went up 63 points yesterday – a weak bounce after several days of losses.
This is no time to hold stocks – for the reasons we outlined yesterday.
But gold? Should you buy gold and hope to get rich when gold shoots up to $3,000 an ounce? A bad idea, in our opinion. You should buy gold to protect your assets. The risk is in the paper money...because they can create as much of it as they please. And they're under pressure now to create a lot. You buy gold as insurance against inflation, a dollar bust, a bear market in stocks and bonds, or a financial crisis. Gold is nature's money. It is better than manmade money. Because, with gold, what you have is what you've got. They can't artificially depreciate it or easily increase the quantity of it. That's why the feds don't like it. It won't support their cause du jour – whether it is a war, a bailout, stimulus, health care, or whatever. Gold doesn't cooperate with the financial engineers. That's why it's a good thing to hold when you think the financial engineers are making a mistake.
But our view is that while the engineers are making a mistake, they're not very good at it even when they're making a mistake they're good at. Typically, they're pretty good at causing inflation. But now the credit bubble is deflating, not inflating. It will take them a few years before they become reckless enough to move prices up again. And then, they'll probably overshoot their objectives considerably.
In the meantime, there's no inflation to speak of...no dollar crisis...no bond bust. So we wouldn't expect the price of gold to soar...not just yet. That's the big surprise – that this period of deflation will last longer than expected. Then, when it begins to seem permanent, inflation will suddenly come roaring back.
By then, most investors will have given up on gold...especially those who were speculating on it going to $3,000. It will go to $3,000, but only after speculators have dropped their positions.
So far, everything is happening just as we expected. After more than half a century of boom, we are now in a bust. People need to downsize...cut back...and live a little less large than they had in the boom years. That means...well...just what you'd expect.
Wasn't it just yesterday that we reported that Florida was losing population? People just aren't retiring like used to. Here's comes the evidence:
From The New York Times comes this headline: "Older US Workers Put Retirement on Hold."
The Times tells us that older people are continuing to work because they don't have a choice. They can't afford to retire. So they hold onto jobs, which is another reason it's so hard for the unemployed to find a job. Those who have them aren't giving them up. A Bloomberg report today, for example, tells us that more people are applying for job benefits than expected. Another tells us that millions of people are running out of benefits before they find a job.
Just what you'd expect, in other words. Here are some of the other things we expected:
1. Unemployment is still rising.
"Investors discouraged by US jobs report," says a headline at the International Herald Tribune. To make a long story short, August was a disappointment. More jobs were lost than expected.
We don't know how many jobs we should expect to lose. But we're in the downhill part of the credit cycle; we're bound to lose a lot of them.
2. Sales are falling.
That's another thing we would expect. People have to cut back. So...they do cut back. Sales go down. That means fewer sales and fewer jobs. No point in making things, shipping them and retailing them if no one is buying them, right?
3. What else would you expect? Lower house prices? Check. Higher savings rates? Check. More bankruptcies? Check. Falling prices? Check.
Isn't it nice when things work out "as they should"? Check. |
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I think so too
smartrader ( Date: 08-Sep-2009 22:18) Posted:
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It doesn't matter whether it is 10 Aug or now as from then till now, there is no significant major change in the trend, if there is I will definitely post here.
DnApeh ( Date: 08-Sep-2009 22:32) Posted:
Hey, thanks. but this one dated 10 Aug 2009.
Got 10 Sep 2009 one or not? |
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The Dow Will Hit 10,000 in 2009
by Dr. Mark Skousen, Advisory Panelist
Highlights in this issue:
- Three reasons why the Dow is going up.
- Insights from Jeremy Siegel.
- Why the Dow 10,000 in 2009 isn't crazy.
![]()
1,695 "Inside Traders" Just Saw 1,449% in Three Months
It started with a 244% gainer they targeted on February 12th... They uncovered another 269% winner on February 18th... And just recently, on May 4th, they locked in gains of 274%, 208%, and 156% in just one day!
All told, these "Inside Traders" have booked 1,449% in 3 months by adhering to a strict "formula" developed by a Wall Street turncoat.
To get a sneak peek at the strategy they swear by, go here now.
![]()
Dear Investment U Reader,
Wall Street has been debating the huge run-up in the Dow Jones Industrial Average.
Was March the beginning of a huge rally that will take the market to new highs? Have we witnessed the proverbial "dead-cat bounce?" The prognosticators have been unsure, uncertain and uncommittal about what they see coming next...
So let me make it clear where I stand: We are in the beginning of a new bull market that will carry us to 10,000 on the Dow by year's-end - and new highs within a couple of years.
Yes, the recovery will be volatile. But now is the time to buy, despite the big run up.
No doubt there's plenty of bad news out there - rising unemployment with no end in sight, threatened tax increases on capital gains and dividends, anemic corporate profits, commercial real-estate insolvency, federal deficits, continued threats from the Middle East and Afghanistan, the specter of inflation and high interest rates among others...
This list goes on and on. But as the old saying goes, "Wall Street climbs a wall of worry."
It's all for naught - and I encourage you to look past these sideshows and distractions. I'm convinced the stock market is headed higher - a lot higher. I'll share my reasoning and tell you why Jeremy Siegel feels the same way.
Three Reasons the Dow is Going Up
Over the past few months, three things have been sticking out to me like huge blinking aircraft landing signals. Here's why we're going to keep moving up..
-
The Fed. Bernanke and the Federal Reserve are pulling out all the stops to stimulate the economy. Since September 2008, the money supply (M2) has been growing at an incredible 13% rate, one of the highest in the post-World War II period.
As Milton Friedman has demonstrated time and time again, after a lag of between six and nine months an easy money policy will cause a sharp recovery in the economy and stocks. Economists call it the "Friedman Effect."
-
Mortgage support. The Obama administration has been working hard at bailing out all the unstable banks, bad mortgages and bad assets in the economy through massive deficit spending. Essentially, the government policy is putting a floor under the residential real estate market, which will keep it from collapsing any further.
-
History sides with the bulls. Last month, I had dinner with Jeremy Siegel, professor of economics at the Wharton School and author of the bestseller "Stocks for the Long Run." He is a firm believer in looking at historical trends, something that many investors and Wall Street analysts have forgotten. And right now, the trend favors the bulls.
Well, guess what? The lag is over, and the "Friedman Effect" is taking full effect. We can expect higher stock prices and a recovery in the economy by year-end. And as a result of the administration's efforts, housing sales are on the rise and real estate prices are stabilizing.
It's why I'm so interested in real estate lately. Take a look at my last column, "Real Estate: The Buy of the Century."
Adding more fuel to my position, when I sat down with Wharton's Wizard he showed me an interesting long-term chart of the S&P 500 Index.
The Wizard of Wharton's Long-Term Outlook
You'll note that every time the market hit the bottom of his long-term chart, it rallied - sharply. And that's exactly where it was in late February when I met with Professor Siegel - at the bottom.
Sure enough, in early March Wall Street rallied - and it hasn't looked back. It's now up 30% from its lows. Between you and me, he called the exact bottom of the stock market within weeks. (Of course, so did a few of our analysts as well.)
How far up can it go? I asked this precise question to Professor Siegel last month.
He told me that he has just completed a study of how well stocks do after a major crash like the one we just experienced (falling 50% from its highs). His conclusion was pretty striking: After a major bear market, stocks on average rebound 24% the first year of recovery. And just as nice, the average annual return over the next five years is 18%.
Since the Dow was around 8,300 at the first of the year, it could climb back to 10,000 by year-end. (And 18,000 by 2013.) We could comfortably hit these numbers with an additional 19% gain.
Although many believe the "easy money" has been made - and they may be right - the market will still offer plenty of profitable opportunities in the coming months. It'll be volatile, but it's certainly not too late to get aboard.
Good investing,
Mark
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I do hope so as nothing is guaranteed in trading.
risktaker ( Date: 08-Sep-2009 21:39) Posted:
Your VERY VERY right on this one :)
richtan ( Date: 08-Sep-2009 21:37) Posted:
Below is my chart analysis for sharing and exchange pointers.
My TA chart is posted to share n exchange pointers with those TA practitioner whom believes in TA.
If u are a TA detractor, plse just ignore n refrain from peeping at my chart posting n start
making unconstructive comments and plse do not be so childish or lunatic as to abuse the
rating system by rating it as "bad post", accumulating for yourself and your
next generation, "bad" karma for your "bad" deeds.
If u think it is a bad post, then be constructive and kindly post your TA for sharing.
This is only my view n I may be right or wrong, so dyodd and SOBAYOR.
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Below is my chart analysis for sharing and exchange pointers.
My TA chart is posted to share n exchange pointers with those TA practitioner whom believes in TA.
If u are a TA detractor, plse just ignore n refrain from peeping at my chart posting n start
making unconstructive comments and plse do not be so childish or lunatic as to abuse the
rating system by rating it as "bad post", accumulating for yourself and your
next generation, "bad" karma for your "bad" deeds.
If u think it is a bad post, then be constructive and kindly post your TA for sharing.
This is only my view n I may be right or wrong, so dyodd and SOBAYOR.
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Stocks Rise for Fourth Day as Gold Exceeds $1,000, Dollar Falls
By Daniel Hauck
Sept. 8 (Bloomberg) -- Stocks rose for a fourth day as higher metals and computer-memory prices boosted the earnings outlook for raw-material and technology companies. Gold climbed above $1,000 an ounce for the first time in six months.
The MSCI World Index of 23 developed countries advanced 0.7 percent at 12:17 p.m. in London. Futures on the Standard & Poor’s 500 Index rallied 1.2 percent after U.S. markets were closed for a holiday yesterday. Silver jumped to a 13-month high, copper gained for a fourth day and crude oil increased. The dollar fell against all but one of the 16 most-traded currencies tracked by Bloomberg.
Goldman Sachs Group Inc. raised its forecasts today for metals because of “increasing evidence of a stronger-than- anticipated recovery in global industrial activity.” International Monetary Fund Managing Director Dominique Strauss- Kahn told the Il Sole 24 Ore newspaper that the crisis phase that toppled Lehman Brothers Holdings Inc. in September 2008 “is almost certainly behind us.”
“This is the best phase of the economic cycle,” a team of Credit Suisse Group AG strategists led by London-based Andrew Garthwaite wrote in a note today. “Many economic and financial variables are back to pre-Lehman levels.”
Credit Suisse said that investors should favor stocks over bonds and cash, and forecast gains in equity indexes worldwide ranging from 12 percent for Europe to 23 percent for Japan through mid-2010 as the economy recovers.
BHP, STM
The Dow Jones Stoxx 600 Index of European shares rose 0.5 percent. Raw-material producers climbed 2.7 percent as a group and technology shares added 1.3 percent.
BHP Billiton Ltd., the world’s biggest mining company, rose 2.8 percent in London and Rio Tinto Group, the third-largest, gained 3.4 percent as copper, nickel, zinc and tin increased on the London Metals Exchange.
STMicroelectronics NV, Europe’s largest semiconductor maker, advanced 3.4 percent, while Elpida Memory Inc., Japan’s biggest maker of dynamic random access memory, gained 5.4 percent in Tokyo. Prices of the benchmark 1-gigabit computer- memory chip climbed to $1.71 yesterday, from as low as 58 cents in December, according to Dramexchange Technology Inc., operator of Asia’s biggest spot market for the chips.
Cadbury Plc, which soared 38 percent yesterday, increased 1.9 percent. The maker of Dairy Milk chocolates may attract suitors ranging from Nestle SA to Hershey Co. and sell for as much as $21 billion after rejecting Kraft Food Inc.’s $16.7 billion bid yesterday, according to analysts.
U.S. Futures
The gains in U.S. futures indicated the S&P 500 may advance for a third straight day. Apple Inc., maker of the iPod, rose 1.5 percent in pre-market New York trading. The company will host an event tomorrow in San Francisco that may be the first opportunity for Chief Executive Officer Steve Jobs to make a public appearance after his liver transplant.
The MSCI Emerging Markets Index added 1.2 percent, climbing for a fourth straight day. Russia’s Micex index jumped 2.5 percent as oil rose in New York. Russia is surpassing Saudi Arabia in oil exports for the first time since the Soviet Union’s collapse in 1991. China’s Shanghai Composite Index gained 1.7 percent.
Gold for immediate delivery rose to $1,007.70 an ounce, trading within 3 percent of its record $1,032.70 set in March 2008. Copper added 2.3 percent to $6,470 a metric ton and lead rallied 4.4 percent to the highest price since May 2008.
Copper will climb to $7,650 a ton by the end of 2010, up from a previous forecast of $5,800 a ton, Goldman Sachs analyst Jeffrey Currie wrote in a report today. Prices of the metal have more than doubled this year.
Oil Rallies
Oil futures rose above $69 a barrel in New York, gaining as much as 2.5 percent from the last week’s close as the weaker dollar increased demand for commodities as a currency hedge. The contract didn’t settle yesterday because of the Labor day holiday.
Ministers from the Organization of Petroleum Exporting Countries meet tomorrow in Vienna to set production targets. Saudi Arabian Oil Minister Ali al-Naimi said the market is in “good shape,” with price between $68 and $73 a barrel satisfactory for both consumers and producers.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the currency against those of six major U.S. trading partners, fell 1 percent to 77.267.
The dollar weakened 1.3 percent against the pound after a report showed U.K. manufacturing rose in July by three times as much as economists forecast. The U.S. currency declined 1 percent versus the yen.
Euro Rises
The euro rose against the dollar after the German government reported an unexpected drop in industrial production in July, while also revising higher output in June.
“The near-term prospects do not look particularly encouraging for the dollar,” Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London, wrote in an e-mailed report. “Gold has just broken through the $1,000 level and this along with the Dollar Index approaching the low recorded in early August may well encourage another wave of speculative dollar selling.”
The Group of 20 nations has committed about $12 trillion to resuscitate the global economy, according to the International Monetary Fund, including a package of stimulus measures from the Chinese government of about $586 billion. Figures today showed that China’s passenger-car sales surged a record 90 percent last month as tax cuts and government subsidies spurred demand. Full- year sales of cars, trucks and busses may hit 12 million, the government said last week, enough for China to likely surpass the U.S. as the world’s largest auto market.
European borrowers ranging from Fiat SpA and Bayerische Motoren Werke AG to Bank Nederlandse Gemeenten started selling bonds in the busiest day of issuance since the summer vacation lull, according to data compiled by Bloomberg. Italy started marketing its issue of 30-year benchmark bonds, its longest- dated security.
To contact the reporters on this story: Daniel Hauck in London at dhauck1@bloomberg.net. Last Updated: September 8, 2009 07:32 EDT
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Ausgroup at this point in time is forming a bullish harami.
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Look forward to your chart posting (see my earlier posting below on how to post charts) to exchange pointers n learn from one another.
thulasiappan ( Date: 08-Sep-2009 11:02) Posted:
Currently I am reading through Japanese Candlestick Charting Techniques by Steve Nison
and I'm planning to buy Technical Analysis of the Financial Markets by John J. Murphy. Is it worth buying this book. Any one gone through this book please give some suggestions.
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These 2 books which I had recommended in my the other thread "Some recommended good TA books" under "General", "trading Techniques".are definitely worth reading n mastering.
thulasiappan ( Date: 08-Sep-2009 11:02) Posted:
Currently I am reading through Japanese Candlestick Charting Techniques by Steve Nison
and I'm planning to buy Technical Analysis of the Financial Markets by John J. Murphy. Is it worth buying this book. Any one gone through this book please give some suggestions.
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This is a good time to buy in anticipation of SSE run-up, read below:
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* Alert Admin |
| Daryl Guppy: Secret escape from the panda bear |
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| Written by Daryl Guppy |
| Saturday, 05 September 2009 15:00 |
ONE SWALLOW DOESN'T make a summer and many believe that a few days of rebound in the Shanghai market doesn’t drive away the bearish mood. There is no question that the fall below the long-term trendline is particularly significant. It changes the nature of the trend in the market and the nature of the trend behaviour. The long-term trendline will now act as a formidable resistance to future rises in the trend. The shallow slope of the long-term trendline suggests a slower rate of a future trend rise for the Shanghai market. This is a good outcome because it will develop a more stable and sustainable uptrend. Fundamental analysts use arbitrary measures to distinguish between a retracement and a bear market. The measures of 10% for a technical correction and 20% for a bear market are convenient, but misleading ways to gauge market behaviour. They do not take into account the behaviour and development of trends. In an environment where the Dow Jones can rise or fall routinely by 3.5% or more a day, it makes little sense to define a technical correction based on a 10% figure. The characteristics of a bear market are related to the behaviour of the trend and not to a particular figure. This difference is very important when we consider the Shanghai Composite Index. A bear market is preceded by strong and clear chart patterns which give early warnings of a major change in the trend. The most common is the head-and-shoulder pattern. The rounding-top pattern is also a relievable leading signal of trend change. Both these chart patterns developed over several months. The head-and- shoulder pattern in the Shanghai Composite Index started in June 2007 and was confirmed six months later in January 2008. When we look at the Shanghai Composite Index behaviour in recent weeks or months, we cannot identify one of these bear-market patterns. There is no rounding-top pattern. There is no head-and-shoulder pattern. These patterns forecast a significant and prolonged change in the trend. Without these patterns, the significance of the recent index retreat and trend change is analysed differently. Further analysis indicates the market is showing the opportunity to apply Strategy 8 from the Chinese 36 Strategies. This is a Secret Escape Through Chen Cang. Analysts are focused on the bear market development, or distracted by the idea of a bubble collapse. They ignore the developing Relative Strength Index (RSI) divergence pattern. The rally rebound in the last several days has confirmed this RSI divergence. This points the way to the secret escape from the bear market. Divergence occurs when two trendlines move in opposite directions during the same time period. Analysis starts with the Shanghai Composite Index chart. The first trendline is drawn between the low of Aug 20 and the low of Sept 1. This trend line slopes downwards. The next step is to consider the RSI indicator display. These index lows are compared to the low points on the RSI indicator for the same dates. These two RSI lows are joined with a trendline. This trendline moves upwards and confirms the RSI divergence pattern. This is a powerful and reliable trend reversal pattern. This pattern strongly suggests this market will develop a recovery uptrend. The RSI divergence pattern has one problem — it is not very good for understanding the time frame for the market recovery. When the divergence pattern develops, it does not mean the market will instantly recover and change the trend direction. The RSI divergence pattern warns that the current trend has weakened and a new trend is developing. This may be preceded by a period of consolidation and then develop a new uptrend. The consolidation area is easily identified on the Shanghai Composite Index chart. There is a strong resistance level near 3,000. This is the upper edge of the consolidation area. The lower edge is at 2,600. There is a high probability the market will move in a sideways trading band for several weeks before developing a breakout above 3,000. A market consolidation between 2,600 and 3,000 will provide short-term rally trading opportunities. This indicates investors are accumulating stocks and getting ready for the development of the next section of the longterm uptrend in the Shanghai market. This has been a savage sell-off but, the RSI divergence pattern shows the market can make a secret escape from the bear. The pattern of chart behaviour suggests this is not a bear market, despite the degree of retracement.  |
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Good Post
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This is a good time to buy in anticipation of SSE run-up, read below:
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* Alert Admin |
| Daryl Guppy: Secret escape from the panda bear |
|
| Written by Daryl Guppy |
| Saturday, 05 September 2009 15:00 |
ONE SWALLOW DOESN'T make a summer and many believe that a few days of rebound in the Shanghai market doesn’t drive away the bearish mood. There is no question that the fall below the long-term trendline is particularly significant. It changes the nature of the trend in the market and the nature of the trend behaviour. The long-term trendline will now act as a formidable resistance to future rises in the trend. The shallow slope of the long-term trendline suggests a slower rate of a future trend rise for the Shanghai market. This is a good outcome because it will develop a more stable and sustainable uptrend. Fundamental analysts use arbitrary measures to distinguish between a retracement and a bear market. The measures of 10% for a technical correction and 20% for a bear market are convenient, but misleading ways to gauge market behaviour. They do not take into account the behaviour and development of trends. In an environment where the Dow Jones can rise or fall routinely by 3.5% or more a day, it makes little sense to define a technical correction based on a 10% figure. The characteristics of a bear market are related to the behaviour of the trend and not to a particular figure. This difference is very important when we consider the Shanghai Composite Index. A bear market is preceded by strong and clear chart patterns which give early warnings of a major change in the trend. The most common is the head-and-shoulder pattern. The rounding-top pattern is also a relievable leading signal of trend change. Both these chart patterns developed over several months. The head-and- shoulder pattern in the Shanghai Composite Index started in June 2007 and was confirmed six months later in January 2008. When we look at the Shanghai Composite Index behaviour in recent weeks or months, we cannot identify one of these bear-market patterns. There is no rounding-top pattern. There is no head-and-shoulder pattern. These patterns forecast a significant and prolonged change in the trend. Without these patterns, the significance of the recent index retreat and trend change is analysed differently. Further analysis indicates the market is showing the opportunity to apply Strategy 8 from the Chinese 36 Strategies. This is a Secret Escape Through Chen Cang. Analysts are focused on the bear market development, or distracted by the idea of a bubble collapse. They ignore the developing Relative Strength Index (RSI) divergence pattern. The rally rebound in the last several days has confirmed this RSI divergence. This points the way to the secret escape from the bear market. Divergence occurs when two trendlines move in opposite directions during the same time period. Analysis starts with the Shanghai Composite Index chart. The first trendline is drawn between the low of Aug 20 and the low of Sept 1. This trend line slopes downwards. The next step is to consider the RSI indicator display. These index lows are compared to the low points on the RSI indicator for the same dates. These two RSI lows are joined with a trendline. This trendline moves upwards and confirms the RSI divergence pattern. This is a powerful and reliable trend reversal pattern. This pattern strongly suggests this market will develop a recovery uptrend. The RSI divergence pattern has one problem — it is not very good for understanding the time frame for the market recovery. When the divergence pattern develops, it does not mean the market will instantly recover and change the trend direction. The RSI divergence pattern warns that the current trend has weakened and a new trend is developing. This may be preceded by a period of consolidation and then develop a new uptrend. The consolidation area is easily identified on the Shanghai Composite Index chart. There is a strong resistance level near 3,000. This is the upper edge of the consolidation area. The lower edge is at 2,600. There is a high probability the market will move in a sideways trading band for several weeks before developing a breakout above 3,000. A market consolidation between 2,600 and 3,000 will provide short-term rally trading opportunities. This indicates investors are accumulating stocks and getting ready for the development of the next section of the longterm uptrend in the Shanghai market. This has been a savage sell-off but, the RSI divergence pattern shows the market can make a secret escape from the bear. The pattern of chart behaviour suggests this is not a bear market, despite the degree of retracement. |
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Thanks, I found it.
richtan ( Date: 08-Sep-2009 12:07) Posted:
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Hi erictkw,
Many thanks , can provide me the link to it.
Thanks
erictkw ( Date: 08-Sep-2009 12:03) Posted:
Hi Richtan, it is FREE! Go to The Edge Singapore website under Blog Heads.  |
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Hi erictkw,
Many thanks , can provide me the link to it.
Thanks
erictkw ( Date: 08-Sep-2009 12:03) Posted:
| Hi Richtan, it is FREE! Go to The Edge Singapore website under Blog Heads. |
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Good Post
Bad Post
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Hi erictkw,
Kindly advise is this a paid subscription or a free newsletter
Thanks
erictkw ( Date: 08-Sep-2009 11:26) Posted:
| Daryl Guppy: Secret escape from the panda bear |
|
| Written by Daryl Guppy |
| Saturday, 05 September 2009 15:00 |
ONE SWALLOW DOESN'T make a summer and many believe that a few days of rebound in the Shanghai market doesn’t drive away the bearish mood. There is no question that the fall below the long-term trendline is particularly significant. It changes the nature of the trend in the market and the nature of the trend behaviour. The long-term trendline will now act as a formidable resistance to future rises in the trend. The shallow slope of the long-term trendline suggests a slower rate of a future trend rise for the Shanghai market. This is a good outcome because it will develop a more stable and sustainable uptrend.
Fundamental analysts use arbitrary measures to distinguish between a retracement and a bear market. The measures of 10% for a technical correction and 20% for a bear market are convenient, but misleading ways to gauge market behaviour. They do not take into account the behaviour and development of trends. In an environment where the Dow Jones can rise or fall routinely by 3.5% or more a day, it makes little sense to define a technical correction based on a 10% figure.
The characteristics of a bear market are related to the behaviour of the trend and not to a particular figure. This difference is very important when we consider the Shanghai Composite Index. A bear market is preceded by strong and clear chart patterns which give early warnings of a major change in the trend. The most common is the head-and-shoulder pattern. The rounding-top pattern is also a relievable leading signal of trend change. Both these chart patterns developed over several months. The head-and- shoulder pattern in the Shanghai Composite Index started in June 2007 and was confirmed six months later in January 2008.
When we look at the Shanghai Composite Index behaviour in recent weeks or months, we cannot identify one of these bear-market patterns. There is no rounding-top pattern. There is no head-and-shoulder pattern. These patterns forecast a significant and prolonged change in the trend. Without these patterns, the significance of the recent index retreat and trend change is analysed differently.
Further analysis indicates the market is showing the opportunity to apply Strategy 8 from the Chinese 36 Strategies. This is a Secret Escape Through Chen Cang. Analysts are focused on the bear market development, or distracted by the idea of a bubble collapse. They ignore the developing Relative Strength Index (RSI) divergence pattern. The rally rebound in the last several days has confirmed this RSI divergence. This points the way to the secret escape from the bear market.
Divergence occurs when two trendlines move in opposite directions during the same time period. Analysis starts with the Shanghai Composite Index chart. The first trendline is drawn between the low of Aug 20 and the low of Sept 1. This trend line slopes downwards.
The next step is to consider the RSI indicator display. These index lows are compared to the low points on the RSI indicator for the same dates. These two RSI lows are joined with a trendline. This trendline moves upwards and confirms the RSI divergence pattern. This is a powerful and reliable trend reversal pattern. This pattern strongly suggests this market will develop a recovery uptrend.
The RSI divergence pattern has one problem — it is not very good for understanding the time frame for the market recovery. When the divergence pattern develops, it does not mean the market will instantly recover and change the trend direction. The RSI divergence pattern warns that the current trend has weakened and a new trend is developing. This may be preceded by a period of consolidation and then develop a new uptrend.
The consolidation area is easily identified on the Shanghai Composite Index chart. There is a strong resistance level near 3,000. This is the upper edge of the consolidation area. The lower edge is at 2,600. There is a high probability the market will move in a sideways trading band for several weeks before developing a breakout above 3,000. A market consolidation between 2,600 and 3,000 will provide short-term rally trading opportunities. This indicates investors are accumulating stocks and getting ready for the development of the next section of the longterm uptrend in the Shanghai market. This has been a savage sell-off but, the RSI divergence pattern shows the market can make a secret escape from the bear. The pattern of chart behaviour suggests this is not a bear market, despite the degree of retracement.
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Below is my chart analysis for sharing and exchange pointers.
My TA chart is posted to share n exchange pointers with those TA practitioner whom believes in TA.
If u are a TA detractor, plse just ignore n refrain from peeping at my chart posting n start
making unconstructive comments and plse do not be so childish or lunatic as to abuse the
rating system by rating it as "bad post", accumulating for yourself and your
next generation, "bad" karma for your "bad" deeds.
If u think it is a bad post, then be constructive and kindly post your TA for sharing.
This is only my view n I may be right or wrong, so dyodd and SOBAYOR.
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